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Personal & Family Finance Final – Flashcards

Isabella Parker

7 July 2022

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What is the main characteristic of a laissez-faire economy? a. A highly active government b. An economy protected by organizations c. A lack of regulations d. All of the above

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c. A lack of regulations

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Which of the following is not a characteristic of market economies? a. Competition b. Economic freedom c. Government ownership of businesses d. Economic incentives

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c. Government ownership of businesses

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In the United States, which agency oversees workplace safety and ensures that businesses comply with safety and health regulations to protect workers and consumers? a. Department of Justice b. Occupational Safety and Health Administration c. National Institute of Health d. Department of Natural Resources

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b. Occupational Safety and Health Administration

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Privately owned businesses are common in which type of economy? a. Gift economies b. Planned economies c. Socialist economies d. Capitalist economies

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d. Capitalist economies

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What is the study of the ways in which money is created and used in society? a. Sociology b. Economics c. Political Science d. Monitarism

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b. Economics

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What are taxes that are levied on imports and/or exports? a. Tariffs b. Capital c. Free enterprise fines d. Excesses

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a. Tariffs

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Capitalism is characterized by which of the following? a. Privately owned businesses b. Profits c. A market economy d. All of the above

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d. All of the above

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What are companies that have complete control over a particular product or industry? a. Monopolies b. Oligarchies c. Capitalists d. All of the above

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...

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Individuals play what level of role in the economy? a. Minimalist b. Important c. Random d. They have no role

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b. Important

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Anti-trust laws or suits may be used to break up which of the following? a. Oligarchies b. Polyisms c. Monopolies d. Tariffs

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c. Monopolies

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Capitalism is an example of a planned economy. True False

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false

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Individuals have little effect on the overall health of the economy. True False

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false

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Tariffs are used to encourage global trade between two countries. True False

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false

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Laissez-faire situations are characterized by a high degree of governmental involvement. True False

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false

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While the economies of countries like the United States are generally considered capitalist, they are not pure market economies. True False

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true

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Economists argue that individuals have "rational self-interest". True False

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true

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The difference between unlimited wants and limited resources affects both individuals and the economy. True False

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true

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"Free" items only cost the company that gives them away. True False

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false

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The NASDAQ features an open outcry. True False

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false

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The most common way for a government to raise money is through the collection of taxes. True False

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true

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What is a benefit of stock markets? a. They create jobs. b. They allow companies to generate income. c. They allow individuals to invest money and create more money. d. All of the above

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d. All of the above

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What is one economic principle? a. Resources are unlimited. b. Individuals have no rational self-interest. c. Resources are limited. d. The wants of society are limited.

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c. Resources are limited.

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A share of ownership in a company is known as which of the following? a. Stock b. Investment c. Rebate d. Bond

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a. Stock

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What is a sort of auction for stocks in which traders verbally submit their offers? a. Open outcry b. Public caucus c. Verbal auction d. Loud session

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a. Open outcry

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What is true about economic resources? a. Economic resources include only money. b. Economic resources are limited. c. Economic resources exist only at the individual level. d. Economic resources are always controlled by the government.

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b. Economic resources are limited.

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What is the governmental allocation and collection of money within the state? a. Resource policy b. Domestic policy c. Fiscal policy d. Monetary policy

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c. Fiscal policy

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A balanced economy generally has which economic stance? a. Expansionary b. Contractionary c. Neutral d. Exceptionary

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c. Neutral

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In economic terms, marginal is another word for which of the following? a. Outside b. Rare c. Additional d. Boundaries

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c. Additional

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Governments collect money through which of the following? a. Taxes b. Bonds c. Selling resources d. All of the above

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d. All of the above

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Which of the following is an economic resource? a. Money b. Investments c. Entrepreneurial ability d. All of the above

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...

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Our financial decisions decrease once we reach adulthood. True False

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false

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There are two means for achieving financial goals—you either need to increase your savings or reduce spending. True False

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true

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Personal financial planning is the process of creating and achieving financial goals. True False

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true

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As we age, the number and complexity of the financial decisions that we make increases. True False

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true

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A family's resources are unlimited. True False

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false

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What is true about emotions and financial decisions? a. You should only make financial decisions when you are in a good mood. b. You should only make financial decisions when you are in a bad mood. c. You should try to leave emotions out of financial decisions. d. Emotions have no impact on financial decisions

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c. You should try to leave emotions out of financial decisions.

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What is not one of the three primary resources that families have to reach financial goals? a. Time b. Money c. Education d. Energy

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c. Education

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About what percentage of lottery winners end up with financial troubles? a. 2 percent b. 18 percent c. 45 percent d. 70 percent

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d. 70 percent

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What is the first step in financial planning? a. Analyzing the current situation. b. Identifying goals. c. Coming up with strategies for meeting goals. d. Assess the advantages and disadvantages of different strategies.

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a. Analyzing the current situation.

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What is true about personal financial planning? a. You only need to list long-term goals. b. You don't need a financial plan until about the age of 35. c. Your financial goals will change over time. d. All of the above

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c. Your financial goals will change over time.

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Interest rate risks would be most relevant to what purchase? Airline tickets A house A sweater Patio furniture

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b. A house

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Experts recommend that you revisit your financial goals about how often? Every 10 to 20 years Every 2 to 5 years Every year A few times a year

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d. A few times a year

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What should be left out of financial decisions whenever possible? Emotion Shared decision-making Financial plans All of the above

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a. Emotion

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Unemployment is an example of which of the following? Inflation risk Personal risk Income risk Interest risk

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c. Income risk

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What is the final step in personal financial planning? Setting goals. Reviewing and revising goals. Creating strategies for meeting goals. None of the above

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b. Reviewing and revising goals

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What is the end of the CD account time when the money can be withdrawn? Maturity date End date Completion date Withdrawal date

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a. Maturity date

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An example of a nondepository financial institution is which of the following? Commercial bank Credit union Brokerage firm All of the above

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c. Brokerage firm

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What is true about certificates of deposit? They offer lower interest rates than savings accounts. They are the most liquid account available. The money has to remain in the account for a specified period of time. All of the above are true.

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not d

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Savings and loans institutions put about 70 percent of their money into which of the following? Bonds Stocks Life insurance policies Mortgages

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d. Mortgages

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Mutual fund companies are what type of companies? Mortgage Investment Credit card Insurance

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b. Investment

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Who would be eligible for a 403(b) account? A salesperson A CEO of a Fortune 500 company A government employee Anyone

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c. A government employee

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Pawnshops generally offer what type of service? Check cashing Loans on possessions High interest savings accounts Life insurance

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b. Loans of possessions

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Web-only financial institutions do not have which of the following? Checking accounts Savings accounts Interest Physical locations

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d. Physical locations

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Brokerage firms make their profits primarily in which of the following ways? Consumer deposits Government deposits Dividends Fees or commissions on sales or transfers

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d. Fees or commissions on sales or transfers

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401k accounts are what type of accounts? Mortgage Bond Retirement Education

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c. Retirement

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Credit unions are nonprofit organizations. True False

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true

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All financial institutions offer the same products and services to consumers. True False

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false

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In the United States, all financial institutions are required to conduct business at a physical location only. True False

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false

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All financial institutions are equally safe and beneficial to use. True False

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false

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401k accounts are those that are partially funded by employers using a portion of wages before tax. True False

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true

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Preparing a tax return yourself can be less expensive, but individuals not familiar with preparing taxes may miss eligible deductions and credits. True False

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true

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Estate taxes are taxes on a person's estate when that person dies. True False

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true

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All individuals in the United States file their taxes under the same status. True False

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false

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In the United States, only five states currently charge sales tax on purchases. True False

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false

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In the United States, federal taxes and returns are due each year on May 15th. True False

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false

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What is a federal and/or state tax on specific goods like gasoline, tires, airfare, and cigarettes? Estate tax Income tax Excise tax Goods tax

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c. Excise tax

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Which form details how much money an employer has withheld for taxes? W-2 A-5 T-10 M-9

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a. W-2

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In the United States, federal taxes are due on which day? February 28th April 15th July 4th October 1st

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b. April 15th

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Which type of audit occurs at your home or business? Field Office Correspondence All of the above

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a. Field

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Jane is not married and has no children. She is 35 and owns her own home. Under which status is she most likely to file? Filing jointly Single Head of household Widow

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b. single

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Taxes are used for which of the following? Maintaining roads Parks and public cultural sites Social services All of the above

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d. All of the above

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In a progressive tax system, who pays a greater proportion of their income in taxes? Those with low incomes Those with high incomes Those who have the most deductions Everyone pays the same

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b. Those with high incomes

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Which of the following is not included when calculating gross income? Paychecks Alimony Investment income Scholarships

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d. Scholarships

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All sources of income are known as which of the following? Gross income Adjusted gross income Taxable income Whole income

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a. Gross income

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The United States began collecting federal income tax in which year? 1776 1861 1913 1955

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c. 1913

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While we talk about the stock market as if it were one big entity, the reality is that there are many stock markets around the world. True False

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true

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Labor is an unlimited resource. True False

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false

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The difference between unlimited wants and limited resources affects both individuals and the economy. True False

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true

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Why do most companies sell shares of stock? All companies are required to sell shares of stock. To let more people vote on company decisions. To generate income for the company. To gain a greater reputation.

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c. To generate income for the company

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What is a sort of auction for stocks in which traders verbally submit their offers? Open outcry Public caucus Verbal auction Loud session

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a. Open outcry

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The New York Stock Exchange is an example of what type of stock market? Virtual Distance Physical Individual

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c. Physical

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A share of ownership in a company is known as which of the following? Stock Investment Rebate Bond

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a. Stock

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An economy where more money is being collected than is being allocated or spent is known as what type of economic stance? Expansionary Contractionary Neutral Exceptionary

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not a

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A balanced economy generally has which economic stance? Expansionary Contractionary Neutral Exceptionary

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c. Neutral

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When talking about economic resources, capital refers to which of the following? Money Tools and machinery needed to manufacture goods Investments and stocks All of the above

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not d

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Commercial banks are funded through which of the following? Customer deposits Stock holders Government funding Services

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a. Customer deposits

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Mutual savings institutions are owned by whom? Stockholders Members of the institution Governments All of the above

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b. Members of the insitution

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What is true about credit unions? They are not insured by the government. They are generally member-owned. They only offer savings accounts. All of the above are true.

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b. They are generally member-owned

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The FDIC in the United States insures some financial accounts up to what amount? $10,000 $50,000 $100,000 $500,000

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not d

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Estimated payments are often used by individuals who are self-employed, have investments, or have other income where employer withholding is not offered. True False

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true

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The United States has a regressive tax system. True False

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false

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Privately owned businesses are common in which type of economy? Gift economies Planned economies Socialist economies Capitalist economies

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d. Capitalist economies

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Which of the following is not an aspect of capitalism? Resources Cooperation Capital Labor

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not c

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When did economies begin? 1600 1850 1125 Ancient times

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d. Ancient times

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In the United States, which agency oversees workplace safety and ensures that businesses comply with safety and health regulations to protect workers and consumers? Department of Justice Occupational Safety and Health Administration National Institute of Health Department of Natural Resources

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b. Occupational Safety and Health Administration

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What are taxes that are levied on imports and/or exports? Tariffs Capital Free enterprise fines Excesses

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a. Tariffs

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Individuals play what level of role in the economy? a. Minimalist b. Important c. Random d. They have no role

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b. Important

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Which of the following is not a characteristic of market economies? Competition Economic freedom Government ownership of businesses Economic incentives

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c. Government ownership of businesses

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The rise or fall in the price of an item is an example of which of the following? Inflation risk Personal risk Income risk Interest rate risk

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a. Inflation risk

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What is the first step in financial planning? Analyzing the current situation. Identifying goals. Coming up with strategies for meeting goals. Assess the advantages and disadvantages of different strategies.

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a. Analyzing the current situation

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What is a disadvantage of shared decision-making? Multiple viewpoints. Discussing the pros and cons of the decision. Creating a less impulsive or emotional decision. It can create competition between individuals who want to "win" the decision

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not a

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What is an amount of money multiplied by the interest rate and the amount of time that the money will be earning interest? Present value Future value Past value None of the above

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b. Future value

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What is true about financial planning? Only short term goals are important. Once you have a plan, you shouldn't need to revise it. Financial plans should be reviewed regularly. All of the above.

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c. Financial plans should be reviewed regularly

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While the economies of countries like the United States are generally considered capitalist, they are not pure market economies. True False

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true

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Financial experts recommend that you compare at least several different financial institutions in your area and find the one that best meets your needs. True False

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true

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The Federal Deposit Insurance Corporation (FDIC) is an insurance agency that is supported by the government in the United States. True False

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true

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401k accounts are those that are partially funded by employers using a portion of wages before tax. True False

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true

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Making financial decisions is fairly rare; most people make only a few during their lifetime. True False

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false

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Although some families have more resources than other families, there are a limited amount of resources with which families have to work. True False

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true

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In the United States, it is possible for someone to give a gift of up to how much money per year to another person without that money being taxed? $1,000 $8,000 $10,000 $12,000

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d. $12,000

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Which type of audit occurs at your home or business? Field Office Correspondence All of the above

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a. Field

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What is the amount of money that the policy holder must pay before the insurance company will reimburse an insured loss? Deductible Rider Premium Exclusion

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a. Decuctible

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What document details the type of medical care that you wish to receive if you become incapacitated due to a physical or mental illness or accident? Formal will Holographic will Statutory will Living will

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d. Living will

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What is not true about contracts? They are legal agreements. They can be either oral or written, in certain cases. Both parties have to be legally competent to enter into the agreement in the contract. A contract can be enforced even if the agreement contains an illegal activity.

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d. A contract can be enforced even if the agreement contains an illegal activity.

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What is not part of all contracts? The offer Time requirements Premiums Consideration

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c. Premiums

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Consensus ad idem means which of the following? Meeting of the minds Agreement of the people Agreement to pay None of the above

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a. Meeting of the minds

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If someone dies without a will, who handles the distribution of the person's estate? The spouse A lawyer of the family's choice The children The state

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d. The state

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A simple will leaves your possessions to whom? A spouse Your spouse and a charitable organization Your spouse and in trust for other heirs A charitable organization

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a. Spouse

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When you want to add coverage for something not included in an insurance policy, what would you add to your policy? An exclusion A premium A deductible A rider

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not b

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The specific protection that an insurer provides to a policy holder is known as which of the following? Exclusion Rider Coverage Premium

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c. Coverage

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What is a failure to take reasonable actions to prevent injury or damage? Risk Rider Fraud Negligence

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d. Negligence

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Verbal contracts can never be legally enforced. True False

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False

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If someone dies without a will (a legal situation known as intestate), the state will step in to handle the distribution of the estate, even if it is not what you may have wanted. True False

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true

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Only individuals over the age of 60 need to create an estate plan. True False

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False

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Experts recommend that you only use insurance if the item is worth more than $100,000. True False

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False

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You should always read the fine print before signing a contract. True False

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true

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What is the process of earning interest on interest that you've already earned? Interesting Compounding Accumulating Saving

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b. Compounding

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Preferred stocks share characteristics with which of the following? Common stocks and corporate bonds Real estate and common stocks Government bonds and corporate bonds Mutual funds and government bonds

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a. Common stocks and corporate bonds

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A stock is a share of what? Dividends Money Bonds Ownership

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d. Ownership

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What is true about preferred stocks? They do not pay dividends. They give owners a share of ownership in the company. They are almost risk-free. All of the above.

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b. They give owners a share of ownership in the company

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What is an advantage of a savings account? The money is available for an emergency. The money can double or triple in a short period of time. The account is riskier than investing in stocks. All of the above.

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not d

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A bond indenture is which of the following? Dividend Legal document Contract between two corporations A type of municipal bond

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b. Legal document

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T-bills are offered in what monetary increment? $1 $5 $10 $100

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d. $100

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What is a legal document that outlines all of the conditions of a bond? Bond indenture Bond asset Bond contract Bond allocation

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a. Bond indenture

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Municipal bonds are issued by whom? Federal government State or local governments Corporations All of the above

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b. State or local governments

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What is true about investing? It is less risky than using a savings account. It is used to generate money. Investing includes only common stocks. All of the above.

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b. It is used to generate money

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Speculative investments are high-risk investments with the possibility of high returns in a short period of time. True False

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true

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One of the advantages of having a savings account is that the money can be used for emergency purposes, whereas money in bonds, CDs, or investments may not be readily available. True False

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true

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If you have a financial professional advising you on investments, it is not necessary to do your own research. True False

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false

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Individuals have to choose whether to save or invest since it is not recommended to do both. True False

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false

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Dividends are the periodic distribution of profits to investors. True False

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true

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Those who pay off their credit balances in full each month and avoid the finance and interest charges are known as convenience users. True False

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true

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Smart cards are also known as gift cards. True False

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false

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Consumer credit has very few advantages and is best avoided at all times. True False

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false

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Before giving you a loan or credit, lending institutions may want to know more about you to help determine whether you are a good person to give loans or credit. True False

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true

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Credit tends to cost individuals more than paying in cash. True False

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true

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What type of card includes a computer chip with additional information on it? Debit card Credit card Smart card Stored value card

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c. Smart card

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What is a reason why someone would use a secured credit card? To purchase goods in another country. To help overcome a bad credit history. To have every purchase guaranteed with a five-year warranty. All of the above.

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b. To help overcome a bad credit history

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Something of value that is used to back up a loan is known as what? Dividends Collateral Capacity Conditions

answer

b. Collateral

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Experts recommend that if you have a credit card balance, you keep the balance below what percent of the total credit limit? 10 15 20 30

answer

d. 30

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What is a disadvantage of using credit? It can be tempting to overspend. It's convenient. It may offer special advantages. All of the above.

answer

a. It can be tempting to overspend

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Credit unions tend to give credit only to whom? Persons with no credit history. Members of the credit union. Persons with a bad credit history. They extend credit to anyone who needs it.

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b. Members of the credit union

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The assets that you currently own are known as which of the following? Credit Capital Capacity Collateral

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b. Capital

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What is true about payments with closed-end credit? They increase over time. The decrease over time. They remain the same until the credit is paid off. They vary from month to month.

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c. They remain the same until the credit is paid off

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If you are trying to establish credit history, what is a good place to start? Gasoline or department store credit card Bank line of credit A Visa or MasterCard You should never use credit

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a. Gasoline or department store credit card

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Individuals who do not pay off their credit card balances each month are known as which of the following? Borrowers Convenience users Consumer users None of the above

answer

a. Borrowers

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Only individuals that make over $50,000 per year should worry about creating a cash flow statement. True False

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false

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A home file is the place where you should keep financial records that you may need to access regularly. True False

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true

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Net worth is the difference between your assets and your liabilities. True False

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true

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Financial goals should not be considered when creating a budget. True False

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false

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Liabilities are the amounts of money due to others that need to be paid immediately. True False

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true

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What is a record of income and expenditures for a particular period? Personal balance sheet Cash flow statement Net worth None of the above

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b. Cash flow statement

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What is the first step in creating a cash flow statement? Record your expenditures Record your income Record insurance Record credit card payments

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b. Record your income

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What is a reason for keeping organized financial records? Paying bills Filing taxes Measuring financial status All of the above

answer

d. All of the above

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Radio:What is an example of a long-term liability? Mortgage Tax payment Doctor's bill Electric bill

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a. Mortgage

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What type of budget involves placing money into envelopes? Mental budget Physical budget Written budget Software budget

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b. Physical budget

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What is a common mistake made in budgeting? Over-estimating expenses Budgeting for financial goals or savings last Writing the budget down All of the above

answer

b. Budgeting for financial goals or savings last

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What is an assessment of what you own and what you owe? Personal balance statement Cash flow statement Budget statement Liability statement

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not b

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The first step in creating a cash flow statement is which of the following? Recording financial goals Recording expenses Recording income Recording tax information

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c. Recording income

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What budgeting option is best used only with limited resources and expenses? Mental budgeting Physical budgeting Written budgeting Software budgeting

answer

not d

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What is true about computer files of financial records? They should be backed up regularly. Financial records should never be kept in computer files. All records can be kept electronically. They are less susceptible to theft.

answer

a. They should be backed up regularly

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Experts recommend that you don't wait for sales before buying an item since the item is likely to rise in price during the time you wait. True False

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false

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Smaller bags of items are generally priced lower per unit than larger bags. True False

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false

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It is hard for identity thieves to steal an identity in today's society. True False

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false

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Fraud alerts and credit freezes are the same thing. True False

answer

false

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One of the first steps that you can take is to place a fraud alert on your credit reports from Equifax, Experian, and TransUnion. True False

answer

true

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What is an example of personal information that an identity thief would look for? Your social security number Your bank account number Your birth date All of the above

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d. All of the above

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What involves special devices that steal your credit card or debit card information when you use the card for a purchase? Pretexting Phishing Sponsoring Skimming

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d. Skimming

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What is a strategy for reducing the risk of identity theft? Throw out personal information in black trash bags. Carry only the cards and personal identification that you need. Use your Social Security number instead of other personal information like a driver's license. All of the above

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b. Carry only the cards and personal identification that you need

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Experts recommend that you time your purchases to what, if possible? Each time a new product is released Sales The weekend There are no best times to purchase goods

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b. sales

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What advertising technique involves the use of "positive words without actually really making any guarantee"? Glittering Generalities Weasel Words Endorsements Card Stacking

answer

b. Weasel words

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If you receive a phone call and the caller asks for personal information, what should you do? Give the caller the information. Ask to speak to the caller's supervisor. Refuse to give the information and hang up. Ask them for another number to call to give the information.

answer

b. Ask to speak to the caller's supervisor

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Which of the following issues credit reports? Equifax MasterCard Herman Miller All of the above

answer

a. Equifax

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What is a partial refund of the purchase price of an item? Pretext Sale Rebate Phishing

answer

c. Rebate

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What advertising technique focuses on the positive and ignores any negative aspects in a product? Glittering Generalities Weasel Words Endorsements Card Stacking

answer

d. Card stacking

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What might be a consideration in deciding where to buy something? The location of the store The price of the item you wish to buy Customer service All of the above

answer

d. All of the above

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question

What is the main characteristic of a laissez-faire economy? a. A highly active government b. An economy protected by organizations c. A lack of regulations d. All of the above

answer

c. A lack of regulations

question

Which of the following is not a characteristic of market economies? a. Competition b. Economic freedom c. Government ownership of businesses d. Economic incentives

answer

c. Government ownership of businesses

question

answer

b. Occupational Safety and Health Administration

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Privately owned businesses are common in which type of economy? a. Gift economies b. Planned economies c. Socialist economies d. Capitalist economies

answer

d. Capitalist economies

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What is the study of the ways in which money is created and used in society? a. Sociology b. Economics c. Political Science d. Monitarism

answer

b. Economics

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What are taxes that are levied on imports and/or exports? a. Tariffs b. Capital c. Free enterprise fines d. Excesses

answer

a. Tariffs

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Capitalism is characterized by which of the following? a. Privately owned businesses b. Profits c. A market economy d. All of the above

answer

d. All of the above

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What are companies that have complete control over a particular product or industry? a. Monopolies b. Oligarchies c. Capitalists d. All of the above

answer

...

question

Individuals play what level of role in the economy? a. Minimalist b. Important c. Random d. They have no role

answer

b. Important

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Anti-trust laws or suits may be used to break up which of the following? a. Oligarchies b. Polyisms c. Monopolies d. Tariffs

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c. Monopolies

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Capitalism is an example of a planned economy. True False

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false

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Individuals have little effect on the overall health of the economy. True False

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false

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Tariffs are used to encourage global trade between two countries. True False

answer

false

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Laissez-faire situations are characterized by a high degree of governmental involvement. True False

answer

false

question

While the economies of countries like the United States are generally considered capitalist, they are not pure market economies. True False

answer

true

question

Economists argue that individuals have "rational self-interest". True False

answer

true

question

The difference between unlimited wants and limited resources affects both individuals and the economy. True False

answer

true

question

"Free" items only cost the company that gives them away. True False

answer

false

question

The NASDAQ features an open outcry. True False

answer

false

question

The most common way for a government to raise money is through the collection of taxes. True False

answer

true

question

What is a benefit of stock markets? a. They create jobs. b. They allow companies to generate income. c. They allow individuals to invest money and create more money. d. All of the above

answer

d. All of the above

question

What is one economic principle? a. Resources are unlimited. b. Individuals have no rational self-interest. c. Resources are limited. d. The wants of society are limited.

answer

c. Resources are limited.

question

A share of ownership in a company is known as which of the following? a. Stock b. Investment c. Rebate d. Bond

answer

a. Stock

question

What is a sort of auction for stocks in which traders verbally submit their offers? a. Open outcry b. Public caucus c. Verbal auction d. Loud session

answer

a. Open outcry

question

answer

b. Economic resources are limited.

question

What is the governmental allocation and collection of money within the state? a. Resource policy b. Domestic policy c. Fiscal policy d. Monetary policy

answer

c. Fiscal policy

question

A balanced economy generally has which economic stance? a. Expansionary b. Contractionary c. Neutral d. Exceptionary

answer

c. Neutral

question

In economic terms, marginal is another word for which of the following? a. Outside b. Rare c. Additional d. Boundaries

answer

c. Additional

question

Governments collect money through which of the following? a. Taxes b. Bonds c. Selling resources d. All of the above

answer

d. All of the above

question

Which of the following is an economic resource? a. Money b. Investments c. Entrepreneurial ability d. All of the above

answer

...

question

Our financial decisions decrease once we reach adulthood. True False

answer

false

question

There are two means for achieving financial goals—you either need to increase your savings or reduce spending. True False

answer

true

question

Personal financial planning is the process of creating and achieving financial goals. True False

answer

true

question

As we age, the number and complexity of the financial decisions that we make increases. True False

answer

true

question

A family's resources are unlimited. True False

answer

false

question

answer

c. You should try to leave emotions out of financial decisions.

question

What is not one of the three primary resources that families have to reach financial goals? a. Time b. Money c. Education d. Energy

answer

c. Education

question

About what percentage of lottery winners end up with financial troubles? a. 2 percent b. 18 percent c. 45 percent d. 70 percent

answer

d. 70 percent

question

answer

a. Analyzing the current situation.

question

answer

c. Your financial goals will change over time.

question

Interest rate risks would be most relevant to what purchase? Airline tickets A house A sweater Patio furniture

answer

b. A house

question

Experts recommend that you revisit your financial goals about how often? Every 10 to 20 years Every 2 to 5 years Every year A few times a year

answer

d. A few times a year

question

What should be left out of financial decisions whenever possible? Emotion Shared decision-making Financial plans All of the above

answer

a. Emotion

question

Unemployment is an example of which of the following? Inflation risk Personal risk Income risk Interest risk

answer

c. Income risk

question

What is the final step in personal financial planning? Setting goals. Reviewing and revising goals. Creating strategies for meeting goals. None of the above

answer

b. Reviewing and revising goals

question

What is the end of the CD account time when the money can be withdrawn? Maturity date End date Completion date Withdrawal date

answer

a. Maturity date

question

An example of a nondepository financial institution is which of the following? Commercial bank Credit union Brokerage firm All of the above

answer

c. Brokerage firm

question

answer

not d

question

Savings and loans institutions put about 70 percent of their money into which of the following? Bonds Stocks Life insurance policies Mortgages

answer

d. Mortgages

question

Mutual fund companies are what type of companies? Mortgage Investment Credit card Insurance

answer

b. Investment

question

Who would be eligible for a 403(b) account? A salesperson A CEO of a Fortune 500 company A government employee Anyone

answer

c. A government employee

question

Pawnshops generally offer what type of service? Check cashing Loans on possessions High interest savings accounts Life insurance

answer

b. Loans of possessions

question

Web-only financial institutions do not have which of the following? Checking accounts Savings accounts Interest Physical locations

answer

d. Physical locations

question

Brokerage firms make their profits primarily in which of the following ways? Consumer deposits Government deposits Dividends Fees or commissions on sales or transfers

answer

d. Fees or commissions on sales or transfers

question

401k accounts are what type of accounts? Mortgage Bond Retirement Education

answer

c. Retirement

question

Credit unions are nonprofit organizations. True False

answer

true

question

All financial institutions offer the same products and services to consumers. True False

answer

false

question

In the United States, all financial institutions are required to conduct business at a physical location only. True False

answer

false

question

All financial institutions are equally safe and beneficial to use. True False

answer

false

question

401k accounts are those that are partially funded by employers using a portion of wages before tax. True False

answer

true

question

Preparing a tax return yourself can be less expensive, but individuals not familiar with preparing taxes may miss eligible deductions and credits. True False

answer

true

question

Estate taxes are taxes on a person's estate when that person dies. True False

answer

true

question

All individuals in the United States file their taxes under the same status. True False

answer

false

question

In the United States, only five states currently charge sales tax on purchases. True False

answer

false

question

In the United States, federal taxes and returns are due each year on May 15th. True False

answer

false

question

What is a federal and/or state tax on specific goods like gasoline, tires, airfare, and cigarettes? Estate tax Income tax Excise tax Goods tax

answer

c. Excise tax

question

Which form details how much money an employer has withheld for taxes? W-2 A-5 T-10 M-9

answer

a. W-2

question

In the United States, federal taxes are due on which day? February 28th April 15th July 4th October 1st

answer

b. April 15th

question

Which type of audit occurs at your home or business? Field Office Correspondence All of the above

answer

a. Field

question

Jane is not married and has no children. She is 35 and owns her own home. Under which status is she most likely to file? Filing jointly Single Head of household Widow

answer

b. single

question

Taxes are used for which of the following? Maintaining roads Parks and public cultural sites Social services All of the above

answer

d. All of the above

question

In a progressive tax system, who pays a greater proportion of their income in taxes? Those with low incomes Those with high incomes Those who have the most deductions Everyone pays the same

answer

b. Those with high incomes

question

Which of the following is not included when calculating gross income? Paychecks Alimony Investment income Scholarships

answer

d. Scholarships

question

All sources of income are known as which of the following? Gross income Adjusted gross income Taxable income Whole income

answer

a. Gross income

question

The United States began collecting federal income tax in which year? 1776 1861 1913 1955

answer

c. 1913

question

While we talk about the stock market as if it were one big entity, the reality is that there are many stock markets around the world. True False

answer

true

question

Labor is an unlimited resource. True False

answer

false

question

The difference between unlimited wants and limited resources affects both individuals and the economy. True False

answer

true

question

answer

c. To generate income for the company

question

What is a sort of auction for stocks in which traders verbally submit their offers? Open outcry Public caucus Verbal auction Loud session

answer

a. Open outcry

question

The New York Stock Exchange is an example of what type of stock market? Virtual Distance Physical Individual

answer

c. Physical

question

A share of ownership in a company is known as which of the following? Stock Investment Rebate Bond

answer

a. Stock

question

An economy where more money is being collected than is being allocated or spent is known as what type of economic stance? Expansionary Contractionary Neutral Exceptionary

answer

not a

question

A balanced economy generally has which economic stance? Expansionary Contractionary Neutral Exceptionary

answer

c. Neutral

question

When talking about economic resources, capital refers to which of the following? Money Tools and machinery needed to manufacture goods Investments and stocks All of the above

answer

not d

question

Commercial banks are funded through which of the following? Customer deposits Stock holders Government funding Services

answer

a. Customer deposits

question

Mutual savings institutions are owned by whom? Stockholders Members of the institution Governments All of the above

answer

b. Members of the insitution

question

What is true about credit unions? They are not insured by the government. They are generally member-owned. They only offer savings accounts. All of the above are true.

answer

b. They are generally member-owned

question

The FDIC in the United States insures some financial accounts up to what amount? $10,000 $50,000 $100,000 $500,000

answer

not d

question

Estimated payments are often used by individuals who are self-employed, have investments, or have other income where employer withholding is not offered. True False

answer

true

question

The United States has a regressive tax system. True False

answer

false

question

Privately owned businesses are common in which type of economy? Gift economies Planned economies Socialist economies Capitalist economies

answer

d. Capitalist economies

question

Which of the following is not an aspect of capitalism? Resources Cooperation Capital Labor

answer

not c

question

When did economies begin? 1600 1850 1125 Ancient times

answer

d. Ancient times

question

answer

b. Occupational Safety and Health Administration

question

What are taxes that are levied on imports and/or exports? Tariffs Capital Free enterprise fines Excesses

answer

a. Tariffs

question

Individuals play what level of role in the economy? a. Minimalist b. Important c. Random d. They have no role

answer

b. Important

question

Which of the following is not a characteristic of market economies? Competition Economic freedom Government ownership of businesses Economic incentives

answer

c. Government ownership of businesses

question

The rise or fall in the price of an item is an example of which of the following? Inflation risk Personal risk Income risk Interest rate risk

answer

a. Inflation risk

question

answer

a. Analyzing the current situation

question

answer

not a

question

What is an amount of money multiplied by the interest rate and the amount of time that the money will be earning interest? Present value Future value Past value None of the above

answer

b. Future value

question

What is true about financial planning? Only short term goals are important. Once you have a plan, you shouldn't need to revise it. Financial plans should be reviewed regularly. All of the above.

answer

c. Financial plans should be reviewed regularly

question

While the economies of countries like the United States are generally considered capitalist, they are not pure market economies. True False

answer

true

question

Financial experts recommend that you compare at least several different financial institutions in your area and find the one that best meets your needs. True False

answer

true

question

The Federal Deposit Insurance Corporation (FDIC) is an insurance agency that is supported by the government in the United States. True False

answer

true

question

401k accounts are those that are partially funded by employers using a portion of wages before tax. True False

answer

true

question

Making financial decisions is fairly rare; most people make only a few during their lifetime. True False

answer

false

question

Although some families have more resources than other families, there are a limited amount of resources with which families have to work. True False

answer

true

question

In the United States, it is possible for someone to give a gift of up to how much money per year to another person without that money being taxed? $1,000 $8,000 $10,000 $12,000

answer

d. $12,000

question

Which type of audit occurs at your home or business? Field Office Correspondence All of the above

answer

a. Field

question

What is the amount of money that the policy holder must pay before the insurance company will reimburse an insured loss? Deductible Rider Premium Exclusion

answer

a. Decuctible

question

answer

d. Living will

question

answer

d. A contract can be enforced even if the agreement contains an illegal activity.

question

What is not part of all contracts? The offer Time requirements Premiums Consideration

answer

c. Premiums

question

Consensus ad idem means which of the following? Meeting of the minds Agreement of the people Agreement to pay None of the above

answer

a. Meeting of the minds

question

If someone dies without a will, who handles the distribution of the person's estate? The spouse A lawyer of the family's choice The children The state

answer

d. The state

question

A simple will leaves your possessions to whom? A spouse Your spouse and a charitable organization Your spouse and in trust for other heirs A charitable organization

answer

a. Spouse

question

When you want to add coverage for something not included in an insurance policy, what would you add to your policy? An exclusion A premium A deductible A rider

answer

not b

question

The specific protection that an insurer provides to a policy holder is known as which of the following? Exclusion Rider Coverage Premium

answer

c. Coverage

question

What is a failure to take reasonable actions to prevent injury or damage? Risk Rider Fraud Negligence

answer

d. Negligence

question

Verbal contracts can never be legally enforced. True False

answer

False

question

If someone dies without a will (a legal situation known as intestate), the state will step in to handle the distribution of the estate, even if it is not what you may have wanted. True False

answer

true

question

Only individuals over the age of 60 need to create an estate plan. True False

answer

False

question

Experts recommend that you only use insurance if the item is worth more than $100,000. True False

answer

False

question

You should always read the fine print before signing a contract. True False

answer

true

question

What is the process of earning interest on interest that you've already earned? Interesting Compounding Accumulating Saving

answer

b. Compounding

question

answer

a. Common stocks and corporate bonds

question

A stock is a share of what? Dividends Money Bonds Ownership

answer

d. Ownership

question

What is true about preferred stocks? They do not pay dividends. They give owners a share of ownership in the company. They are almost risk-free. All of the above.

answer

b. They give owners a share of ownership in the company

question

answer

not d

question

A bond indenture is which of the following? Dividend Legal document Contract between two corporations A type of municipal bond

answer

b. Legal document

question

T-bills are offered in what monetary increment? $1 $5 $10 $100

answer

d. $100

question

What is a legal document that outlines all of the conditions of a bond? Bond indenture Bond asset Bond contract Bond allocation

answer

a. Bond indenture

question

Municipal bonds are issued by whom? Federal government State or local governments Corporations All of the above

answer

b. State or local governments

question

What is true about investing? It is less risky than using a savings account. It is used to generate money. Investing includes only common stocks. All of the above.

answer

b. It is used to generate money

question

Speculative investments are high-risk investments with the possibility of high returns in a short period of time. True False

answer

true

question

One of the advantages of having a savings account is that the money can be used for emergency purposes, whereas money in bonds, CDs, or investments may not be readily available. True False

answer

true

question

If you have a financial professional advising you on investments, it is not necessary to do your own research. True False

answer

false

question

Individuals have to choose whether to save or invest since it is not recommended to do both. True False

answer

false

question

Dividends are the periodic distribution of profits to investors. True False

answer

true

question

Those who pay off their credit balances in full each month and avoid the finance and interest charges are known as convenience users. True False

answer

true

question

Smart cards are also known as gift cards. True False

answer

false

question

Consumer credit has very few advantages and is best avoided at all times. True False

answer

false

question

Before giving you a loan or credit, lending institutions may want to know more about you to help determine whether you are a good person to give loans or credit. True False

answer

true

question

Credit tends to cost individuals more than paying in cash. True False

answer

true

question

What type of card includes a computer chip with additional information on it? Debit card Credit card Smart card Stored value card

answer

c. Smart card

question

answer

b. To help overcome a bad credit history

question

Something of value that is used to back up a loan is known as what? Dividends Collateral Capacity Conditions

answer

b. Collateral

question

Experts recommend that if you have a credit card balance, you keep the balance below what percent of the total credit limit? 10 15 20 30

answer

d. 30

question

What is a disadvantage of using credit? It can be tempting to overspend. It's convenient. It may offer special advantages. All of the above.

answer

a. It can be tempting to overspend

question

Credit unions tend to give credit only to whom? Persons with no credit history. Members of the credit union. Persons with a bad credit history. They extend credit to anyone who needs it.

answer

b. Members of the credit union

question

The assets that you currently own are known as which of the following? Credit Capital Capacity Collateral

answer

b. Capital

question

What is true about payments with closed-end credit? They increase over time. The decrease over time. They remain the same until the credit is paid off. They vary from month to month.

answer

c. They remain the same until the credit is paid off

question

If you are trying to establish credit history, what is a good place to start? Gasoline or department store credit card Bank line of credit A Visa or MasterCard You should never use credit

answer

a. Gasoline or department store credit card

question

Individuals who do not pay off their credit card balances each month are known as which of the following? Borrowers Convenience users Consumer users None of the above

answer

a. Borrowers

question

Only individuals that make over $50,000 per year should worry about creating a cash flow statement. True False

answer

false

question

A home file is the place where you should keep financial records that you may need to access regularly. True False

answer

true

question

Net worth is the difference between your assets and your liabilities. True False

answer

true

question

Financial goals should not be considered when creating a budget. True False

answer

false

question

Liabilities are the amounts of money due to others that need to be paid immediately. True False

answer

true

question

What is a record of income and expenditures for a particular period? Personal balance sheet Cash flow statement Net worth None of the above

answer

b. Cash flow statement

question

What is the first step in creating a cash flow statement? Record your expenditures Record your income Record insurance Record credit card payments

answer

b. Record your income

question

What is a reason for keeping organized financial records? Paying bills Filing taxes Measuring financial status All of the above

answer

d. All of the above

question

Radio:What is an example of a long-term liability? Mortgage Tax payment Doctor's bill Electric bill

answer

a. Mortgage

question

What type of budget involves placing money into envelopes? Mental budget Physical budget Written budget Software budget

answer

b. Physical budget

question

What is a common mistake made in budgeting? Over-estimating expenses Budgeting for financial goals or savings last Writing the budget down All of the above

answer

b. Budgeting for financial goals or savings last

question

What is an assessment of what you own and what you owe? Personal balance statement Cash flow statement Budget statement Liability statement

answer

not b

question

The first step in creating a cash flow statement is which of the following? Recording financial goals Recording expenses Recording income Recording tax information

answer

c. Recording income

question

What budgeting option is best used only with limited resources and expenses? Mental budgeting Physical budgeting Written budgeting Software budgeting

answer

not d

question

answer

a. They should be backed up regularly

question

Experts recommend that you don't wait for sales before buying an item since the item is likely to rise in price during the time you wait. True False

answer

false

question

Smaller bags of items are generally priced lower per unit than larger bags. True False

answer

false

question

It is hard for identity thieves to steal an identity in today's society. True False

answer

false

question

Fraud alerts and credit freezes are the same thing. True False

answer

false

question

One of the first steps that you can take is to place a fraud alert on your credit reports from Equifax, Experian, and TransUnion. True False

answer

true

question

What is an example of personal information that an identity thief would look for? Your social security number Your bank account number Your birth date All of the above

answer

d. All of the above

question

What involves special devices that steal your credit card or debit card information when you use the card for a purchase? Pretexting Phishing Sponsoring Skimming

answer

d. Skimming

question

answer

b. Carry only the cards and personal identification that you need

question

Experts recommend that you time your purchases to what, if possible? Each time a new product is released Sales The weekend There are no best times to purchase goods

answer

b. sales

question

What advertising technique involves the use of "positive words without actually really making any guarantee"? Glittering Generalities Weasel Words Endorsements Card Stacking

answer

b. Weasel words

question

answer

b. Ask to speak to the caller's supervisor

question

Which of the following issues credit reports? Equifax MasterCard Herman Miller All of the above

answer

a. Equifax

question

What is a partial refund of the purchase price of an item? Pretext Sale Rebate Phishing

answer

c. Rebate

question

What advertising technique focuses on the positive and ignores any negative aspects in a product? Glittering Generalities Weasel Words Endorsements Card Stacking

answer

d. Card stacking

question

What might be a consideration in deciding where to buy something? The location of the store The price of the item you wish to buy Customer service All of the above

answer

d. All of the above

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