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. -The primary determinant of your standard of living is your [wealth | propensity to consume].

Two persons with equal average propensities to consume will not necessarily have equal standards of living because of differences in income.

Tangible assets are earning assets that are held for the returns they promise.

Employee benefits can typically be transferred to a new job when one changes employers.

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

Tax planning is most commonly done to:

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

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

Which of the following goals is stated in a way that is most useful for developing a financial plan?

The average propensity to consume refers to the:

Financial goals should be:

Typically,higher level of education is rewarded with higher income over the lifetime.

Martha is 80 and has a very high net worth.Her most important financial concern is probably her:

Money is:

The financial crisis of 2008 and 2009 was the first depression the U.S.has experienced in 75 years.

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.

Government controls consumers and businesses by regulation and taxation.

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. -[Putting money into a retirement fund | Buying a car] would be an example of current consumption.

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 Consumer Price Index is a measure of [unemployment | inflation].

Family financial goals should be: