Transcript Chapter 3
CHAPTER 3 YOUR ROLE AS A CONSUMER CHAPTER 3 SECTION 1: CONSUMPTION, INCOME, AND DECISION MAKING MAIN IDEA: AS A CONSUMER, YOU PLAY AN IMPORTANT ROLE IN THE ECONOMIC SYSTEM VOCABULARY • • • • Consumer Disposable income Discretionary income Rational choice NOTES • Describe the difference between disposable income and discretionary income • What three considerations should govern your decision making as a consumer? a. b. c. SPECIAL NOTE FROM TEACHER • Take a moment to look at the graph on page 62 and figure 3.4 on page 63 CHAPTER 3 SECTION 2: BUYING PRINCIPLES OR STRATEGIES MAIN IDEA: BEWARE OF ADVERTISEMENTS VOCABULARY • • • • • • • Competitive advertising Informative advertising Bait and switch Comparison shopping Warranty Brand name Generic brand NOTES • What trade offs occur when you are gathering information about a product? • What forms of advertising exist? • Based on experiences you have had, what kind of ads should you be aware of? • How do you comparison shop? CHAPTER 3 SECTION 3: CONSUMERISM MAIN IDEA: YOU MUST BE A PROACTIVE CONSUMER TO FIND RELIABLE PRODUCTS AND SERVICES. VOCABULARY • Consumerism • Ethical behavior NOTES • What are your rights as a consumer? a. b. c. d. e. NOTES • What private and federal help can you get as a consumer? • What are your responsibilities as a consumer? • A • B ACTIVITY TO TURN IN • Write a letter to the Bureau of Consumer Protection, 600 Pennsylvania Ave. NW, Washington, DC 20580. Use the letter on page79 as a template. Your letter should include a real or make believe scenario in which you would like to report a faulty product. Include the name of the product, the fault you have with the product in detail, any action you have taken to fix the problem, and what you expect to be done about the faulty product. CHAPTER 4 GOING INTO DEBT CHAPTER 4 SECTION1: AMERICANS AND CREDIT MAIN IDEA: THE NATION’S ECONOMY DEPENDS ON CREDIT VOCABULARY • • • • • • Credit Principal Interest Installment debt Durable goods mortgage NOTES • What are the advantages of repaying installment debt over a long period? • Why do people go into debt? • What factors will help you decide whether or not to use credit? CHAPTER 4 SECTION 2: SOURCES OF LOANS AND CREDIT MAIN IDEA: THERE ARE 2 TYPES OF CREDIT, BUT BEWARE OF INTEREST RATES VOCABULARY • • • • • • • • • Commercial bank Savings and loan association Savings bank Credit union Finance company Charge account Credit card Finance charge Annual percentage rate (APR) NOTES • List the 6 types of financial institutions: 1. 2. 3. 4. 5. 6. NOTES • What are the 3 kinds of charge accounts available in stores? • How are credit cards used? • How is a finance charge different from an annual percentage rate? NOTES • List and briefly describe the different methods used to compute finance charges: CHAPTER 4 SECTION 3: APPLYING FOR CREDIT MAIN IDEA: HANDLE YOUR DEBT VOCABULARY • • • • • • Credit bureau Credit check Credit rating Collateral Secured loan Unsecured loan NOTES • What factors determine a person’s credit rating? • How can you be a responsible borrower? CHAPTER 4 SECTION 4: GOVERNMENT REGULATION OF CREDIT MAIN IDEA: GOVERNMENT REGULATION IS NECESSARY TO PROTECT CONSUMERS VOCABULARY • Usury law • bankruptcy NOTES • How does the Equal Credit Opportunity Act affect consumer credit? • Why do people declare a personal bankruptcy? • List and describe the major federal laws regulating consumer credit: CHAPTER 5 BUYING THE NECESSITIES CHAPTER 5 SECTION 1: SHOPPING FOR FOOD MAIN IDEA: AMERICANS CAN BUY A VARIETY OF FOODS VOCABULARY • Club warehouse store • Convenience store • Private-labeled products NOTES • What are the advantages of comparison food shopping? • Fill in chart Advantages of shopping at club warehouse stores: Disadvantages of shopping at club warehouse stores: CHAPTER 5 SECTION 2: CLOTHING CHOICES MAIN IDEA: AMERICANS LIKE A VARIETY OF CLOTHES VOCABULARY • Durability • Service flow NOTES • What 3 factors determine clothing value? • When should you take advantage of clothing sales? CHAPTER 5 SECTION 3: TO RENT OR TO BUY MAIN IDEA: THERE ARE DIFFERENT WAYS TO OBTAIN HOUSING VOCABULARY • • • • Closing costs Points Lease Security deposit NOTES • What are the three rules to determine how much to spend for a house? • What rights do renters have? • What responsibilities do renters have? CHAPTER 5 SECTION 4: BUYING AND OPERATING A VEHICLE MAIN IDEA: MUCH THOUGHT SHOULD GO INTO BUYING A VEHICLE VOCABULARY • Registration fee • Liability insurance NOTES • What are the 3 trade offs when buying a vehicle? • What costs are involved in operating a vehicle? • Teacher note: read over checklist pg. 131 CHAPTER 6 SAVING AND INVESTING CHAPTER 6 SECTION 1: WHY SAVE? MAIN IDEA: YOU SHOULD SET MONEY ASIDE FOR LATER USE VOCABULARY • • • • • • • • Saving Interest Passbook savings account Statement savings account Money market deposit account Time deposits Maturity Certificates of deposit NOTES • When should you save money? • How do passbook, statement, and money market accounts differ? • What are the advantages of time deposits? CHAPTER 6 SECTION 2: INVESTING: TAKING RISKS WITH YOUR SAVINGS MAIN IDEA: INVESTING CAN BRING PROFIT OR LOSS VOCABULARY • • • • • • • • • • • • Stockholders Capital gain Capital loss Tax-exempt bonds Savings bonds Treasury bills Treasury notes Treasury bonds Broker Over-the-counter market Mutual fund Money market fund NOTES • What is the difference between a stock and a bond? • Give the name for the following and briefly describe what they are: • • • • NYSE NASDAQ DJIA S&P CHAPTER 6 SECTION 3: SPECIAL SAVINGS PLANS AND GOALS MAIN IDEA: ADDITIONAL INCOMES MAY BE NEEDED DURING RETIREMENT VOCABULARY • • • • • Pensions plans Keogh Plan Individual retirement account (IRA) Roth IRA diversification NOTES • What kinds of retirement investments are available? • How much should you save and invest? • Why is risk an important factor when deciding how much to save or invest?