Personal Finance and Money Management Mod 2 DBA

What is an "externality" with regard the purchases we make?

• Unintended Negative Consequences

• Intended Negative Consequences

• Unintended Positive or Negative Consequences

• Unintended Positive Consequences

What can we do to become a smart consumer?

• Follow the advice of friends/family as to what the best purchase option is

• Always use a credit card and never go over the limit

• Consider price, taxes, shipping, warranty, and reviews

• Consider celebrity endorsements when seriously considering item

What is the difference between a durable and non-durable good?

• A durable good will last while the life span of a non-durable good is limited

• A non-durable good is cheaply made

• A durable good is expensive

• All durable and non-durable goods are sold by reputable companies

What is the best use of a credit card?

• Limited use, paying minimum payment monthly

• Varying use, paying balance in full monthly

• Emergency use only, paying minimum payment monthly

What is the Better Business Bureau used for?

• Government agency only used by banks and credit unions

• Government agency used to defraud the public

• Government agency used to protect consumers from business scams and fraud

What is Charm Pricing?

• The incorrect pricing of an item.

• Trick shopper perception by creating the illusion of a much lower price ex. $2.97 instead of $3.00

Which of these purchases/memberships does not require a contract

• Amazon Purchase

• Car Purchase

• Apartment Lease

• Gym Membership

What is a reposession?

• When the bank takes away an item a consumer did not make payments on

• When the bank takes posession of a home after the borrower stops making payments

• A foreclosure

What is true about banks and credit unions?

• Credit Unions do not offer loans

• Commercial banks only deal with checking and savings accounts

• Credit Unions are non-profit and do not charge interest on their loans

• Both have many services including credit cards, savings and checking accounts.

What is a CD?

• A savings option that has better interest than traditional savings

• A savings option that allows easy access to funds

• A savings option that is funded by your employer