Exam 1: Understanding the Financial Planning Process

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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Tax | Liability and insurance] planning is introduced early in the life cycle.

(Multiple Choice)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The two principal constraints which government places upon us are regulations and [tariffs | taxes].

(Multiple Choice)
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The longer you wait to begin retirement planning,the less you will likely have in your retirement fund.

(True/False)
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Your average propensity to consume is the percentage of each dollar of income,on the average,that is spent for current needs rather than savings.

(True/False)
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An economic contraction usually begins after a trough is reached.

(True/False)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[More than | less than] the majority of Americans believe that money cannot buy happiness.

(Multiple Choice)
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Financial assets include investments such as stocks and bonds.

(True/False)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The average American's [home equity | home mortgage] is higher.

(Multiple Choice)
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Financial planning is a dynamic process.

(True/False)
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The main reason to do personal financial planning is to

(Multiple Choice)
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A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.

(True/False)
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This is a measure of inflation based on changes in the cost of a market basket of consumer goods and services:

(Multiple Choice)
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A strong economy leads to

(Multiple Choice)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -During the expansion phase of the business cycle,the unemployment rate will [increase | decrease].

(Multiple Choice)
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GDP refers to the total earnings of American workers during a year.

(True/False)
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Estate planning involves

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A successful financial plan will be based on a person's goals.

(True/False)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Vacations | Education] would be considered a necessity of life.

(Multiple Choice)
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INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Financial planning [does | does not] guarantee a sound financial future.

(Multiple Choice)
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Utility refers to

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