Exam 1: Understanding the Financial Planning Process

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The average [self employed | retired] household has higher levels of assets.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The best way to achieve your financial objectives is to [save every extra dollar you can | develop a sound financial plan].

Utility refers to the amount of satisfaction a person gets from buying certain items.

Insurance provides a way to make money on unfortunate events.

Mutual funds are examples of financial assets.

What policies can the government utilize to help stabilize the economy?

Wealth is the key consideration is establishing financial goals as it is the measure of value in financial transactions.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Two key indicators of economic activity in the U.S.are production levels and [employment levels | cost of living].

Defining financial goals is an important first step in personal financial planning process.

Long-term goals are typically for periods of over 6 years.

Inflation means price levels have declined.

Tax planning is most commonly done to

Cities with higher costs of living also experience higher rates of inflation.

Inflation refers to

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The government employs monetary and fiscal policy to help foster a [fast growing economy | no growth economy].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Most families find it [easy | difficult] to discuss money matters.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -As the rate of inflation increases,the purchasing power of your dollars will [increase | decrease].

Investments are distinguished from savings on the basis of

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Utility | Propensity to consume] refers to the satisfaction you receive from buying certain items.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The average [self employed | retired] household has higher income.