Family Resource Management Chapter One

Life Values

things important to your personal life

Work Values

things important to your professional life

Cultural Values

things important to your heritage and religion

Social values

things important to your heritage and religion

Demographic Values

things important to your specific groups

Life span

time from birth to death

life cycle

events that take place between birth and death

specify

identify the need or want

search

gather information

sift

look at options

select

make a choice

study

reflect are you happy

opportunity cost

value of the next best things that you are giving up when making a decision

specify search sift select study

what is the order of the 5 S’s

law of scarcity

limited supply of something, resources are limited but needs and wants are unlimited

human resources

knowledge, love, values, skills

non-human resources

money, books, wood

traditional economy

What: people follow customs to decide

How: Growing and making things

Who: Anyone in the village

command economy

What: government decides

How: government decides

Who: government decies

Market economy

What: Business decides based on supply and demand

How: Business decides for themselves

Who: Consumers

Mixed Economy

What: business will decide but will follow government regulations

How: business will decide but will follow government regulations

Who: consumers

Free enterprise

competition between companies

four aspects of free enterprise

free economic choice, profit motive, right to private property and control of productive resources, voluntary exchange of goods and services

law of supply

producers offer more of product at a higher price

law of demand

consumers demand more for lower price

Governments influence in economy

laws, fiscal policy, monetary policy

Taxing (fiscal)

recession: taxes are reduced

inflation: taxes are increased

Spending (fiscal)

inflation: spending is decreased

recession: spending is increased

Open market (monetary)

inflation: sell securities

recession: buy back securities

discount rate (monetary)

inflation: interest rate is increased

recession: interest rate is decreased

reserved requirements (monetary policy)

inflation: more money is kept in reserves

recession: less is kept in reserves

gross domestic product

total dollar value of all goods and services

consumer price index

measure of the average change in price for selected goods and services

profit motive

motivation to make profit

how to increase profit

reduce cost of production, increase quantity, change price at product being sold

consumer sovereignty

the dollar vote

standard of living

requirements you have as an individual on what you need for life