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. -[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. -A decrease in the gross domestic product would indicate that our economy is [growing | stagnating].

A financial goal that would be important in all stages of the life cycle is creating and maintaining an emergency fund.

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. -Typically,your salary will be [higher | lower] if you live in a large metropolitan area rather than a small town or rural area.

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. -A stronger economy leads to [higher employment | lower employment].

Consumer choices ultimately determine the kinds of goods and services that businesses provide.

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 U.S.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. -"I want to accumulate a comfortable retirement fund" [would | would not] be a specific financial goal.

_____ is a measure of inflation based on changes in the cost of a market basket of consumer goods and services.

Generally,as income rises,the average propensity to consume:

The government employs monetary and fiscal policy to ensure the economy always remains stable.

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. -During the expansion phase of a business cycle,the unemployment rate will [increase | decrease].

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.

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:

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

_____ is the financial goal most people think is the least important.

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

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. -Income tends to [increase | decrease] between the ages of 55 and 75.

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

Low interest rates after 2008 and 2009 reflect the Federal Reserve's desire to: