The phrase laissez-faire means which of the following?

Flashcard maker : Lily Taylor
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

c. A lack of regulations
Which of the following is not a characteristic of market economies?

a. Competition

b. Economic freedom

c. Government ownership of businesses

d. Economic incentives

c. Government ownership of businesses
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

b. Occupational Safety and Health Administration
Privately owned businesses are common in which type of economy?

a. Gift economies

b. Planned economies

c. Socialist economies

d. Capitalist economies

d. Capitalist economies
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

b. Economics
What are taxes that are levied on imports and/or exports?

a. Tariffs

b. Capital

c. Free enterprise fines

d. Excesses

a. Tariffs
Capitalism is characterized by which of the following?

a. Privately owned businesses

b. Profits

c. A market economy

d. All of the above

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

a. Monopolies

b. Oligarchies

c. Capitalists

d. All of the above

Individuals play what level of role in the economy?

a. Minimalist

b. Important

c. Random

d. They have no role

b. Important
Anti-trust laws or suits may be used to break up which of the following?

a. Oligarchies

b. Polyisms

c. Monopolies

d. Tariffs

c. Monopolies
Capitalism is an example of a planned economy.

True

False

false
Individuals have little effect on the overall health of the economy.

True

False

false
Tariffs are used to encourage global trade between two countries.

True

False

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

True

False

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

True

False

true
Economists argue that individuals have “rational self-interest”.

True

False

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

True

False

true
“Free” items only cost the company that gives them away.

True

False

false
The NASDAQ features an open outcry.

True

False

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

True

False

true
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

d. All of the above
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.

c. Resources are limited.
A share of ownership in a company is known as which of the following?

a. Stock

b. Investment

c. Rebate

d. Bond

a. Stock
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

a. Open outcry
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.

b. Economic resources are limited.
What is the governmental allocation and collection of money within the state?

a. Resource policy

b. Domestic policy

c. Fiscal policy

d. Monetary policy

c. Fiscal policy
A balanced economy generally has which economic stance?

a. Expansionary

b. Contractionary

c. Neutral

d. Exceptionary

c. Neutral
In economic terms, marginal is another word for which of the following?

a. Outside

b. Rare

c. Additional

d. Boundaries

c. Additional
Governments collect money through which of the following?

a. Taxes

b. Bonds

c. Selling resources

d. All of the above

d. All of the above
Which of the following is an economic resource?

a. Money

b. Investments

c. Entrepreneurial ability

d. All of the above

Our financial decisions decrease once we reach adulthood.

True

False

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

True

False

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

True

False

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

True

False

true
A family’s resources are unlimited.

True

False

false
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

c. You should try to leave emotions out of financial decisions.
What is not one of the three primary resources that families have to reach financial goals?

a. Time

b. Money

c. Education

d. Energy

c. Education
About what percentage of lottery winners end up with financial troubles?

a. 2 percent

b. 18 percent

c. 45 percent

d. 70 percent

d. 70 percent
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.

a. Analyzing the current situation.
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

c. Your financial goals will change over time.
Interest rate risks would be most relevant to what purchase?

Airline tickets

A house

A sweater

Patio furniture

b. A house
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

d. A few times a year
What should be left out of financial decisions whenever possible?

Emotion

Shared decision-making

Financial plans

All of the above

a. Emotion
Unemployment is an example of which of the following?

Inflation risk

Personal risk

Income risk

Interest risk

c. Income risk
What is the final step in personal financial planning?

Setting goals.

Reviewing and revising goals.

Creating strategies for meeting goals.

None of the above

b. Reviewing and revising goals
What is the end of the CD account time when the money can be withdrawn?

Maturity date

End date

Completion date

Withdrawal date

a. Maturity date
An example of a nondepository financial institution is which of the following?

Commercial bank

Credit union

Brokerage firm

All of the above

c. Brokerage firm
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.

not d
Savings and loans institutions put about 70 percent of their money into which of the following?

Bonds

Stocks

Life insurance policies

Mortgages

d. Mortgages
Mutual fund companies are what type of companies?

Mortgage

Investment

Credit card

Insurance

b. Investment
Who would be eligible for a 403(b) account?

A salesperson

A CEO of a Fortune 500 company

A government employee

Anyone

c. A government employee
Pawnshops generally offer what type of service?

Check cashing

Loans on possessions

High interest savings accounts

Life insurance

b. Loans of possessions
Web-only financial institutions do not have which of the following?

Checking accounts

Savings accounts

Interest

Physical locations

d. Physical locations
Brokerage firms make their profits primarily in which of the following ways?

Consumer deposits

Government deposits

Dividends

Fees or commissions on sales or transfers

d. Fees or commissions on sales or transfers
401k accounts are what type of accounts?

Mortgage

Bond

Retirement

Education

c. Retirement
Credit unions are nonprofit organizations.

True

False

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

True

False

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

True

False

false
All financial institutions are equally safe and beneficial to use.

True

False

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

True

False

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

True

False

true
Estate taxes are taxes on a person’s estate when that person dies.

True

False

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

True

False

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

True

False

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

True

False

false
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

c. Excise tax
Which form details how much money an employer has withheld for taxes?

W-2

A-5

T-10

M-9

a. W-2
In the United States, federal taxes are due on which day?

February 28th

April 15th

July 4th

October 1st

b. April 15th
Which type of audit occurs at your home or business?

Field

Office

Correspondence

All of the above

a. Field
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

b. single
Taxes are used for which of the following?

Maintaining roads

Parks and public cultural sites

Social services

All of the above

d. All of the above
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

b. Those with high incomes
Which of the following is not included when calculating gross income?

Paychecks

Alimony

Investment income

Scholarships

d. Scholarships
All sources of income are known as which of the following?

Gross income

Adjusted gross income

Taxable income

Whole income

a. Gross income
The United States began collecting federal income tax in which year?

1776

1861

1913

1955

c. 1913
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

true
Labor is an unlimited resource.

True

False

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

True

False

true
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.

c. To generate income for the company
What is a sort of auction for stocks in which traders verbally submit their offers?

Open outcry

Public caucus

Verbal auction

Loud session

a. Open outcry
The New York Stock Exchange is an example of what type of stock market?

Virtual

Distance

Physical

Individual

c. Physical
A share of ownership in a company is known as which of the following?

Stock

Investment

Rebate

Bond

a. Stock
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

not a
A balanced economy generally has which economic stance?

Expansionary

Contractionary

Neutral

Exceptionary

c. Neutral
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

not d
Commercial banks are funded through which of the following?

Customer deposits

Stock holders

Government funding

Services

a. Customer deposits
Mutual savings institutions are owned by whom?

Stockholders

Members of the institution

Governments

All of the above

b. Members of the insitution
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.

b. They are generally member-owned
The FDIC in the United States insures some financial accounts up to what amount?

$10,000

$50,000

$100,000

$500,000

not d
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

true
The United States has a regressive tax system.

True

False

false
Privately owned businesses are common in which type of economy?

Gift economies

Planned economies

Socialist economies

Capitalist economies

d. Capitalist economies
Which of the following is not an aspect of capitalism?

Resources

Cooperation

Capital

Labor

not c
When did economies begin?

1600

1850

1125

Ancient times

d. Ancient times
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

b. Occupational Safety and Health Administration
What are taxes that are levied on imports and/or exports?

Tariffs

Capital

Free enterprise fines

Excesses

a. Tariffs
Individuals play what level of role in the economy?

a. Minimalist

b. Important

c. Random

d. They have no role

b. Important
Which of the following is not a characteristic of market economies?

Competition

Economic freedom

Government ownership of businesses

Economic incentives

c. Government ownership of businesses
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

a. Inflation risk
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.

a. Analyzing the current situation
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

not a
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

b. Future value
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.

c. Financial plans should be reviewed regularly
While the economies of countries like the United States are generally considered capitalist, they are not pure market economies.

True

False

true
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

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

True

False

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

True

False

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

True

False

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

True

False

true
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

d. $12,000
Which type of audit occurs at your home or business?

Field

Office

Correspondence

All of the above

a. Field
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

a. Decuctible
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

d. Living will
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.

d. A contract can be enforced even if the agreement contains an illegal activity.
What is not part of all contracts?

The offer

Time requirements

Premiums

Consideration

c. Premiums
Consensus ad idem means which of the following?

Meeting of the minds

Agreement of the people

Agreement to pay

None of the above

a. Meeting of the minds
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

d. The state
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

a. Spouse
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

not b
The specific protection that an insurer provides to a policy holder is known as which of the following?

Exclusion

Rider

Coverage

Premium

c. Coverage
What is a failure to take reasonable actions to prevent injury or damage?

Risk

Rider

Fraud

Negligence

d. Negligence
Verbal contracts can never be legally enforced.

True

False

False
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

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

True

False

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

True

False

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

True

False

true
What is the process of earning interest on interest that you’ve already earned?

Interesting

Compounding

Accumulating

Saving

b. Compounding
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

a. Common stocks and corporate bonds
A stock is a share of what?

Dividends

Money

Bonds

Ownership

d. Ownership
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.

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

not d
A bond indenture is which of the following?

Dividend

Legal document

Contract between two corporations

A type of municipal bond

b. Legal document
T-bills are offered in what monetary increment?

$1

$5

$10

$100

d. $100
What is a legal document that outlines all of the conditions of a bond?

Bond indenture

Bond asset

Bond contract

Bond allocation

a. Bond indenture
Municipal bonds are issued by whom?

Federal government

State or local governments

Corporations

All of the above

b. State or local governments
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.

b. It is used to generate money
Speculative investments are high-risk investments with the possibility of high returns in a short period of time.

True

False

true
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

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

True

False

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

True

False

false
Dividends are the periodic distribution of profits to investors.

True

False

true
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

true
Smart cards are also known as gift cards.

True

False

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

True

False

false
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

true
Credit tends to cost individuals more than paying in cash.

True

False

true
What type of card includes a computer chip with additional information on it?

Debit card

Credit card

Smart card

Stored value card

c. Smart card
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.

b. To help overcome a bad credit history
Something of value that is used to back up a loan is known as what?

Dividends

Collateral

Capacity

Conditions

b. Collateral
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

d. 30
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.

a. It can be tempting to overspend
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.

b. Members of the credit union
The assets that you currently own are known as which of the following?

Credit

Capital

Capacity

Collateral

b. Capital
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.

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

a. Gasoline or department store credit card
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

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

True

False

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

True

False

true
Net worth is the difference between your assets and your liabilities.

True

False

true
Financial goals should not be considered when creating a budget.

True

False

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

True

False

true
What is a record of income and expenditures for a particular period?

Personal balance sheet

Cash flow statement

Net worth

None of the above

b. Cash flow statement
What is the first step in creating a cash flow statement?

Record your expenditures

Record your income

Record insurance

Record credit card payments

b. Record your income
What is a reason for keeping organized financial records?

Paying bills

Filing taxes

Measuring financial status

All of the above

d. All of the above
Radio:What is an example of a long-term liability?

Mortgage

Tax payment

Doctor’s bill

Electric bill

a. Mortgage
What type of budget involves placing money into envelopes?

Mental budget

Physical budget

Written budget

Software budget

b. Physical budget
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

b. Budgeting for financial goals or savings last
What is an assessment of what you own and what you owe?

Personal balance statement

Cash flow statement

Budget statement

Liability statement

not b
The first step in creating a cash flow statement is which of the following?

Recording financial goals

Recording expenses

Recording income

Recording tax information

c. Recording income
What budgeting option is best used only with limited resources and expenses?

Mental budgeting

Physical budgeting

Written budgeting

Software budgeting

not d
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.

a. They should be backed up regularly
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

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

True

False

false
It is hard for identity thieves to steal an identity in today’s society.

True

False

false
Fraud alerts and credit freezes are the same thing.

True

False

false
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

true
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

d. All of the above
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

d. Skimming
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

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

b. sales
What advertising technique involves the use of “positive words without actually really making any guarantee”?

Glittering Generalities

Weasel Words

Endorsements

Card Stacking

b. Weasel words
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.

b. Ask to speak to the caller’s supervisor
Which of the following issues credit reports?

Equifax

MasterCard

Herman Miller

All of the above

a. Equifax
What is a partial refund of the purchase price of an item?

Pretext

Sale

Rebate

Phishing

c. Rebate
What advertising technique focuses on the positive and ignores any negative aspects in a product?

Glittering Generalities

Weasel Words

Endorsements

Card Stacking

d. Card stacking
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

d. All of the above

Get instant access to
all materials

Become a Member