Question 1

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.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 2

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].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Insurance provides a way to make money on unfortunate events.

Accepted Answer

A) True 
 B)False

Question 5

Mutual funds are examples of financial assets.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  Price stabilization policy 
B)  Monetary policy 
C)  Fiscal policy 
D)  b and c 
E)  a,b,and c

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Inflation means price levels have declined.

Accepted Answer

A) True 
 B)False

Question 12

Tax planning is most commonly done to

Accepted Answer

A)  reduce debt balances. 
B)  change income patterns to avoid taxes. 
C)  minimize taxes. 
D)  pay extra taxes. 
E)  learn the tax code.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Inflation refers to

Accepted Answer

A)  rising prices. 
B)  declining interest rates. 
C)  the opposite of wealth. 
D)  the opposite of stagflation. 
E)  declining prices.

Question 15

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].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 16

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

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 17

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].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 18

Investments are distinguished from savings on the basis of

Accepted Answer

A)  length of time held. 
B)  initial dollar outlay. 
C)  depreciation. 
D)  voting rights. 
E)  level of risk and expected return.

Question 19

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.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 20

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

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

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.