Personal Finance Reading Check 1 – Flashcards
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Generally, as income rises, the average propensity to consume
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decreases
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Ideally, retirement planning should begin
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none of these
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While you are still working, you should be managing your finances for retirement planning. Which of the following is not a goal of your retirement planning?
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effectively passing wealth on to heirs
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As the rate of inflation increases
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retirement plans have more difficulty meeting their goals
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The amount of money we set aside for future consumption will be determined by
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how much we currently earn and spend
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The most important financial planning for young people concerns
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career
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The term most closely associated with quality of life is
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standard of living
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______ is the financial goal most people think is least important
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leaving a large estate
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A strong economy leads to
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higher employment
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The individual consumer is
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the party around which the personal financial environment is centered
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Martha is 80 and has a very high net worth. Her most important financial concern is probably her
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estate
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Family financial goals should be
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realistically attainable
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The last step in the financial planning process is to
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redefine goals and revise plans and strategies as personal circumstances change
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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
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retirement and estate planning
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Becky graduated with a master degree in Personal Financial Planning. After working two years in a small financial planning firm, Becky earns $60,000 annually and saves $10,000 a year. What is her average propensity to consume?
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83.3%
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The financial crisis of 2008 and 2009 is best characterized as a __________
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recession
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Money is
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a medium of exchange
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Personal financial management is important because it
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makes personal financial goals easier to achieve
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Investments are distinguished from savings on the basis of
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level of risk and expected return
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Which of the following goals is stated in a way that is most useful for developing a financial plan?
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Make a $12,000 down payment on an automobile in 4 years
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When setting financial goals, one should typically start by setting
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long-term goals
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______ tends to increase and then decrease over the life cycle
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Debt
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A primary determinant of your quality of life is
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wealth
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Low interest rates after 2008 and 2009 reflect the Federal Reserve's desire to
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stimulate economic growth
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The main reason to do personal financial planning is to
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maximize overall utility
