Question 1

The best way for a family to handle financial decisions is to:

Accepted Answer

A) ensure that only one person in the family makes financial decisions. 
B) communicate consistently about money matters with family members. 
C) ensure that individuals do not interfere in other family members' financial matters. 
D) use a third party, who is not a part of the family, to set financial goals. 
E) maintain confidentiality regarding the reasons behind specific decisions. 
A) ensure that only one person in the family makes financial decisions. 
B) communicate consistently about money matters with family members. 
C) ensure that individuals do not interfere in other family members' financial matters. 
D) use a third party, who is not a part of the family, to set financial goals. 
E) maintain confidentiality regarding the reasons behind specific decisions. B

Question 2

The average propensity to consume refers to:

Accepted Answer

A) the dollars of income spent on luxury goods. 
B) the dollars of income saved by an individual. 
C) expenditures on the basic necessities of life. 
D) the percentage of income spent for current consumption. 
E) the fact that people with higher propensity to consume earn lower income. 
A) the dollars of income spent on luxury goods. 
B) the dollars of income saved by an individual. 
C) expenditures on the basic necessities of life. 
D) the percentage of income spent for current consumption. 
E) the fact that people with higher propensity to consume earn lower income. D

Question 3

Sarah starts investing in an individual retirement account (IRA)at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

Accepted Answer

A) starts investing at the age of 25. 
B) invests at 12 percent. 
C) invests for 45 years. 
D) invests up to the age of 60. 
E) earns 10 percent for 5 years and then 12 percent for 30 years. 
A) starts investing at the age of 25. 
B) invests at 12 percent. 
C) invests for 45 years. 
D) invests up to the age of 60. 
E) earns 10 percent for 5 years and then 12 percent for 30 years. D

Question 4

Which of the following is a reason for a decrease in the average propensity to consume with an increase in income?

Accepted Answer

A) The amount of savings decreases, and the consumption of necessities increases. 
B) The expenditure on luxury goods increases, and the amount of savings decreases. 
C) The expenditure on luxury goods represents only a small portion of income. 
D) The amount of savings represents only a small portion of income. 
E) The cost of necessities represents only a small portion of income. 
A) The amount of savings decreases, and the consumption of necessities increases. 
B) The expenditure on luxury goods increases, and the amount of savings decreases. 
C) The expenditure on luxury goods represents only a small portion of income. 
D) The amount of savings represents only a small portion of income. 
E) The cost of necessities represents only a small portion of income.

Question 5

When setting financial goals, you should typically start by setting:

Accepted Answer

A) short-term goals. 
B) intermediate goals. 
C) long-term goals. 
D) goals that are not time-bound. 
E) goals that are unrealistic. 
A) short-term goals. 
B) intermediate goals. 
C) long-term goals. 
D) goals that are not time-bound. 
E) goals that are unrealistic.

Question 6

You should discuss your financial goals and attitudes toward money with your partner.

Accepted Answer

A) True 
 B)False

Question 7

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Accepted Answer

A) True 
 B)False

Question 8

Financial planning helps us:

Accepted Answer

A) control inflation. 
B) have flexibility to handle job loss. 
C) control unemployment rates. 
D) obtain a Social Security number. 
E) decrease national debt. 
A) control inflation. 
B) have flexibility to handle job loss. 
C) control unemployment rates. 
D) obtain a Social Security number. 
E) decrease national debt.

Question 9

An individual's salary will be lower if he or she lives in a(n)______ area.

Accepted Answer

A) metropolitan 
B) overpopulated 
C) industrial 
D) rural 
E) well-developed 
A) metropolitan 
B) overpopulated 
C) industrial 
D) rural 
E) well-developed

Question 10

Personal financial planning is important because it:

Accepted Answer

A) controls inflation. 
B) limits consumption. 
C) reduces social disparity. 
D) results in an improved standard of living. 
E) reduces economic differences among individuals. 
A) controls inflation. 
B) limits consumption. 
C) reduces social disparity. 
D) results in an improved standard of living. 
E) reduces economic differences among individuals.

Question 11

_____ is equal to the net total value of all the items that an individual owns.

Accepted Answer

A) Wealth 
B) Propensity to consume 
C) Consumer price index 
D) Purchasing power 
E) Credit debt 
A) Wealth 
B) Propensity to consume 
C) Consumer price index 
D) Purchasing power 
E) Credit debt

Question 12

The last step in the financial planning process is to:

Accepted Answer

A) develop financial plans and strategies to achieve goals. 
B) use financial statements to evaluate results of plans and budgets, taking corrective action as required. 
C) implement financial plans and strategies. 
D) redefine goals and revise plans and strategies as personal circumstances change. 
E) periodically develop and implement budgets to monitor and control progress toward goals. 
A) develop financial plans and strategies to achieve goals. 
B) use financial statements to evaluate results of plans and budgets, taking corrective action as required. 
C) implement financial plans and strategies. 
D) redefine goals and revise plans and strategies as personal circumstances change. 
E) periodically develop and implement budgets to monitor and control progress toward goals.

Question 13

Financial planning for young people focuses first on:

Accepted Answer

A) career. 
B) insurance. 
C) investment. 
D) taxes. 
E) retirement. 
A) career. 
B) insurance. 
C) investment. 
D) taxes. 
E) retirement.

Question 14

The most effective way to achieve financial objectives is through personal financial planning.

Accepted Answer

A) True 
 B)False

Question 15

Managing health and disability insurance is an important part of _____ planning.

Accepted Answer

A) asset acquisition 
B) tax 
C) retirement 
D) estate 
E) employee benefit 
A) asset acquisition 
B) tax 
C) retirement 
D) estate 
E) employee benefit

Question 16

Salaries could vary across geographical areas because of ______ costs.

Accepted Answer

A) legal 
B) living 
C) social 
D) psychological 
E) technological 
A) legal 
B) living 
C) social 
D) psychological 
E) technological

Question 17

The average propensity to consume is commonly viewed as a key determinant of standard of living.

Accepted Answer

A) True 
 B)False

Question 18

______ plans are most  helpful in making decisions regarding retirement.

Accepted Answer

A) Personal financial 
B) Insurance 
C) Estate 
D) Business 
E) Spending 
A) Personal financial 
B) Insurance 
C) Estate 
D) Business 
E) Spending

Question 19

Income tends to ______  between the ages of 65 and 80.

Accepted Answer

A) increase 
B) decrease 
C) stabilize 
D) fluctuate 
E) decrease and then increase slowly 
A) increase 
B) decrease 
C) stabilize 
D) fluctuate 
E) decrease and then increase slowly

Question 20

The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.

Accepted Answer

A) True 
 B)False

The best way for a family to handle financial decisions is to:

The average propensity to consume refers to:

Sarah starts investing in an individual retirement account (IRA)at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

Which of the following is a reason for a decrease in the average propensity to consume with an increase in income?

When setting financial goals, you should typically start by setting:

You should discuss your financial goals and attitudes toward money with your partner.

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Financial planning helps us:

An individual's salary will be lower if he or she lives in a(n)______ area.

Personal financial planning is important because it:

_____ is equal to the net total value of all the items that an individual owns.

The last step in the financial planning process is to:

Financial planning for young people focuses first on:

The most effective way to achieve financial objectives is through personal financial planning.

Managing health and disability insurance is an important part of _____ planning.

Salaries could vary across geographical areas because of ______ costs.

The average propensity to consume is commonly viewed as a key determinant of standard of living.

______ plans are most helpful in making decisions regarding retirement.

Income tends to ______ between the ages of 65 and 80.

The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters

Exam 1: Understanding the Financial Process

The best way for a family to handle financial decisions is to:

The average propensity to consume refers to:

Sarah starts investing in an individual retirement account (IRA)at the age of 30 and earns 10 percent for 35 years. At age 65, she will get less returns as compared to those returns if she:

Which of the following is a reason for a decrease in the average propensity to consume with an increase in income?

When setting financial goals, you should typically start by setting:

You should discuss your financial goals and attitudes toward money with your partner.

Mike's annual income is $45,000, and he spends $30,000 for current needs. Mike's average propensity to consume is 80 percent.

Financial planning helps us:

An individual's salary will be lower if he or she lives in a(n)______ area.

Personal financial planning is important because it:

_____ is equal to the net total value of all the items that an individual owns.

The last step in the financial planning process is to:

Financial planning for young people focuses first on:

The most effective way to achieve financial objectives is through personal financial planning.

Managing health and disability insurance is an important part of _____ planning.

Salaries could vary across geographical areas because of ______ costs.

The average propensity to consume is commonly viewed as a key determinant of standard of living.

______ plans are most helpful in making decisions regarding retirement.

Income tends to ______ between the ages of 65 and 80.

The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Using Consumer Loans

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds, Etfs, and Real Estate

Planning for Retirement

Preserving Your Estate

Filters