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Unit 1 flashcards
Flashcards for unit 1
| Term | Definition |
|---|---|
| Values | the regard that something is held to deserve; the importance, worth, or usefulness of something |
| Needs | of necessity. |
| Wants | have a desire to possess or do (something); wish for. |
| Scarcity | the state of being scarce or in short supply; shortage. |
| Goals | the object of a person's ambition or effort; an aim or desired result. |
| Overconfidence | the quality of being too confident; excessive confidence. |
| Fear of Missing Out | anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media. |
| Regret Avoidance | tendency for people to make emotional, rather than logical decisions in order to avoid feeling regret. |
| Confirmation Bias | the tendency to interpret new evidence as confirmation of one's existing beliefs or theories. |
| Regret Aversion | when a decision is made to avoid regretting an alternative decision in the future. |
| Endowment Effect | an emotional bias that causes individuals to value an owned object higher, often irrationally, than its market value. |
| Loss Aversion | the observation that human beings experience losses asymmetrically more severely than equivalent gains. |
| Sunk Costs | refers to money that has already been spent and cannot be recovered. |
| Hedonic Adaptation | the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes |
| Bandwagon Effect | a psychological phenomenon in which people do something primarily because other people are doing it, regardless of their own beliefs. |
| Economy | the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services. |
| Resources | a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively. |
| Entrepreneurship | the activity of setting up a business or businesses, taking on financial risks in the hope of profit. |
| Land | a part of the earth's surface marked off by boundaries. |
| Labor | work, especially hard physical work. |
| Capital | the most important city or town of a country or region, usually its seat of government and administrative center. |
| Market Economy | an economic system in which production and prices are determined by unrestricted competition between privately owned businesses. |
| Command Economy | an economy in which production, investment, prices, and incomes are determined centrally by a government. |
| Traditional Economy | a system that relies on customs, history, and time-honored beliefs. |
| Mixed Economy | an economic system combining private and public enterprise. |
| Capitalism | an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state. |
| Socialism | a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole. |
| Communism | a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs. |
| Ultimate Dream Goal | some future action. |
| Mission | an important assignment carried out for political, religious, or commercial purposes, typically involving travel. |
| Vision | the ability to think about or plan the future with imagination or wisdom. |
| Short Term Goals | something you want to do in the near future. |
| Midterm Goals | objectives that may take longer to achieve than short-term objectives, but they often have a shorter timeline than that of a long-term goal |
| Long Term Goals | something you want to accomplish in the future |
| SMART Goals | Specific, Measurable, Achievable, Realistic, and Timely. |
| Financial Planning Pyramid | a road map to help people decide where to put their emphasis today in preparing to reach their ultimate financial goals. |
| Cash Flow | the total amount of money being transferred into and out of a business, especially as affecting liquidity. |
| Risk Profiling | a quantitative analysis of the types of threats an organization, asset, project or individual faces. |
| Emergency Fund | a financial safety net for future mishaps and/or unexpected expenses. |
| Estate | an extensive area of land in the country, usually with a large house, owned by one person, family, or organization. |
| Portfolio | a range of investments held by a person or organization. |
| Insurance | a practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. |
| Tax Planning | the analysis of a financial situation or plan to ensure that all elements work together to allow you to pay the lowest taxes possible. |
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