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. -[Tax | Liability and insurance] planning is introduced early in the life cycle.

Businesses are a key part of the circular flow of income that sustains our free enterprise system.

Gross domestic product (GDP)refers to the total earnings of American workers during a year.

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 two principal constraints which government places upon us are regulations and [tariffs | taxes].

Mutual funds are examples of financial assets.

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. -[Stocks | Your house] would be considered to be a real property.

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,debts [increase constantly | increase and then decrease] during their lifetimes.

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. -Your level of formal education is a [controllable | non controllable] factor that has a considerable effect on your income.

Ideally,retirement planning should begin:

Financial planning is a dynamic process.

While you are still working,you should be managing your finances for retirement planning.Which of the following is not a goal of your retirement planning?

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

The most important financial planning for young people concerns:

Wealth can be defined as the net total value of all the things you own.

Consumers affect businesses by their choices of what goods and services to purchase and by whether they will spend or save their incomes.

Standard of living is defined as the necessities,comforts,and luxuries desired by an individual or a group.

Debt is another word for liability.

Utility refers to:

As the rate of inflation increases,:

Most families find it difficult to discuss money matters.