Exam 1: Understanding the Financial Planning Process

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -For most people,employee benefits are of [little | major] importance.

The need for financial planning declines as your income increases.

Your personal value system will shape your attitude toward money and wealth accumulation.

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.

Sam and Lele are in their late 20s with 3 young children.Their most important financial planning concerns would probably include all of the following except

The individual consumer is

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

Inflation means price levels have declined.

Maria started a successful business in college and has grown it to millionaire status.Maria would be considered to have predominantly which type of attitude toward money?

Becky graduated with a master's degree in Personal Financial Planning.After working two years in a small financial planning firm,Becky earns $60,000 annually and saves $10,000 a year.What is her average propensity to consume?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Disney stock | Your car] would be considered a financial asset.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Two key indicators of economic activity in the United States are production levels and [employment levels | cost of living].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The Federal Reserve's actions after the financial crisis of 2008 and 2009 resulted in [reduced interest rates | higher interest rates].

The average propensity to consume refers to the

Inflation generally has little effect on personal financial planning.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -As the rate of inflation increases,the purchasing power of your dollars will [increase | decrease].

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

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

Most families find it difficult to discuss money matters.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[GDP | CPI] is the total of all goods and services produced by workers located within the country.