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Exam 1: Understanding the Financial Planning Process

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Question 71

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An economic contraction usually begins after a trough is reached.

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Question 72

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

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Question 73

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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 average American has [$59,000 | $81,000] in retirement accounts.

Nearly 35% of Americans say retirement planning is their most pressing financial concern.

Federal income taxes are

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

Typically people with the lowest incomes tend to be

The most important financial planning for young people concerns

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 best way to achieve your financial objectives is to [save every extra dollar you can | develop a sound financial plan].

Employee benefits may include

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. -[Money | Inflation] is the common denominator for gauging all financial transactions.

Long-term goals are typically for periods of over 6 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. -The net total value of all the items an individual owns is known as [wealth | assets].

Rob requests that a GPS system be added to his new care at an additional cost.The GPS system provides Rob

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. -When investing,you should try to time the market [to buy when it's low | to sell when it's high].

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. -[Utility | Propensity to consume] refers to the satisfaction you receive from buying certain items.

The median income of a person with a master's degree is more than double that of a person with only a high school diploma.

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.

Government controls consumers and businesses by regulation and taxation.