Personal Finance Reading Check 1

Flashcard maker : Lily Taylor
Generally, as income rises, the average propensity to consume
decreases
Ideally, retirement planning should begin
none of these
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?
effectively passing wealth on to heirs
As the rate of inflation increases
retirement plans have more difficulty meeting their goals
The amount of money we set aside for future consumption will be determined by
how much we currently earn and spend
The most important financial planning for young people concerns
career
The term most closely associated with quality of life is
standard of living
______ is the financial goal most people think is least important
leaving a large estate
A strong economy leads to
higher employment
The individual consumer is
the party around which the personal financial environment is centered
Martha is 80 and has a very high net worth. Her most important financial concern is probably her
estate
Family financial goals should be
realistically attainable
The last step in the financial planning process is to
redefine goals and revise plans and strategies as personal circumstances change
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
retirement and estate planning
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?
83.3%
The financial crisis of 2008 and 2009 is best characterized as a __________
recession
Money is
a medium of exchange
Personal financial management is important because it
makes personal financial goals easier to achieve
Investments are distinguished from savings on the basis of
level of risk and expected return
Which of the following goals is stated in a way that is most useful for developing a financial plan?
Make a $12,000 down payment on an automobile in 4 years
When setting financial goals, one should typically start by setting
long-term goals
______ tends to increase and then decrease over the life cycle
Debt
A primary determinant of your quality of life is
wealth
Low interest rates after 2008 and 2009 reflect the Federal Reserve’s desire to
stimulate economic growth
The main reason to do personal financial planning is to
maximize overall utility

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