1. Personal financial management is important because it a. controls inflation.
ID: 2625109 • Letter: 1
Question
1. Personal financial management is important because it
a.
controls inflation.
b.
limits consumption.
c.
uses money as an end.
d.
makes personal financial goals easier to achieve.
e.
lessens economic differences among individuals.
2. Financial planning can help us to
a.
control inflation.
b.
spend wisely.
c.
control unemployment rates.
d.
a and b.
e.
a, b, and c.
3. The last step in the financial planning process is to
a.
develop financial plans and strategies to achieve goals.
b.
use financial statements to evaluate results of plans and budgets, taking corrective action as required.
c.
implement financial plans and strategies.
d.
redefine goals and revise plans and strategies as personal circumstances change
e.
periodically develop and implement budgets to monitor and control progress toward goals.
4. The term most closely associated with quality of life is
a.
wealth.
b.
consumption.
c.
education.
d.
standard of living.
e.
money.
5. A primary determinant of your quality of life is
a.
a tax bill.
b.
tangible property.
c.
wealth.
d.
motivation.
e.
income potential.
6. The federal government gets the majority of its revenue from the ____ tax.
a.
sales
b.
property
c.
excise
d.
income
e.
estate
7. Over 75% of the revenue received by the federal government is from ____ and ____ taxes.
a.
sales and income
b.
income and excise
c.
Social Security and estate
d.
estate and sales
e.
income and Social Security
8. The federal income tax is
a.
integrative.
b.
regressive.
c.
progressive.
d.
flat rate.
e.
none of the above.
9. A progressive tax system is one in which higher-income people pay ____ than lower-income people.
a.
a higher dollar amount in taxes
b.
tax at a higher rate
c.
a lower dollar amount in taxes
d.
tax at a lower rate
e.
tax at the same rate
10. Henry is married to Lillian, and they have two dependent children. Henry can legally file using which of the following filing statuses?
a.
Single
b.
Married filing jointly
c.
Head of household
d.
Qualifying widow
e.
Any of the above
11. Factors typically influencing the choice of where to maintain a checking account are:
a.
convenience and cost
b.
convenience and services
c.
cost and services
d.
convenience, services, and cost
12. Money Market Deposit Accounts
a.
allow unlimited check writing.
b.
are typically federally insured.
c.
have stated maturity dates.
d.
are offered only by credit unions.
e.
all of these.
13. Money Market Mutual Funds
a.
allow check writing.
b.
are typically federally insured.
c.
have stated maturity dates.
d.
are offered by banks, S & Ls, and credit unions.
e.
all of these.
14. Which of the following would be an appropriate savings vehicle if you expected interest rates to fall over the next few months?
a.
money market deposit account
b.
money market mutual fund
c.
certificate of deposit
d.
Series EE US savings bond
e.
a and b
15. Janice Sanders plans on saving $12,000 for 3 years until she returns to college for her master's degree in personal financial planning. She would like to receive a fixed rate of return over that period. Which of the following would you recommend?
a.
money market deposit account
b.
1-year certificate of deposit
c.
3-year certificate of deposit
d.
Series EE US savings bond
e.
b or c
16. Appropriate reasons to use credit include for
a.
convenience.
b.
durable expenses.
c.
investments.
d.
emergencies.
e.
all of the above
17. It is not a good idea to use credit for
a.
convenience.
b.
durable expenses.
c.
consumable items.
d.
investments.
e.
improving one's credit rating.
18. It is not a good idea to use credit to
a.
buy a home.
b.
live beyond one's means.
c.
spread payments within a budget.
d.
purchase expensive items.
e.
replace a check for small items.
19. ____ would be a proper use of credit.
a.
Purchase of a house
b.
A financial emergency
c.
Shopping convenience
d.
Investing
e.
All of these
20. ____ is a benefit of borrowing.
a.
The ability to buy expensive goods while spreading the payments over time
b.
Providing payments that fit into a budget
c.
Having a permanent record of transactions
d.
Being able to purchase goods and services when checks are not acceptable
e.
All of these are benefits.
a.
controls inflation.
b.
limits consumption.
c.
uses money as an end.
d.
makes personal financial goals easier to achieve.
e.
lessens economic differences among individuals.
Explanation / Answer
1) d. makes personal financial goals easier to achieve.
2) b. spend wisely.
3) d. redefine goals and revise plans and strategies as personal circumstances change
4) d. standard of living
5) c. wealth.
6) d. income
7) e. income and Social Security
8) c. progressive.
9) b. tax at a higher rate
10) b. Married filing jointly
11) d. convenience, services, and cost
12) e. all of these.
13) e. all of these.
14) e. a and b
15) e. b or c
16) e. all of the above
17) e. improving one's credit rating.
18) b. live beyond one's means.
19) e. All of these
20) e. All of these are benefits.
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