Personal Finance 2015 Chapter 1

1.

1 point

A debt evidenced by a ʺnote,ʺ which specifies the principal amount, interest rate and date of repayment

interest

loan

finance

bank fee

2.

1 point

Which of the following is NOT a reason credit is marketed heavily to consumers in the United States?

B) There is strong consumer demand for big-ticket items.

C) Since 1920, credit laws in the United States have been relaxed in an attempt to create a mainstream alternative to loan sharks for the working class.

D) The use of credit is not socially accepted in the United States

A) The credit industry has become extremely profitable.

3.

1 point

The granting of a loan and the creation of debt; any form of deferred payment

interest

debt

credit

annual fee

4.

1 point

During the Great Depression, New Deal policymakers came up with mortgage (home loans) and consumer lending policies that convinced commercial banks that:

A) Consumers would not be willing to use credit, since borrowing money for large purchases had not previously been an option for the middle class

C) Consumer credit could be profitable

D) Consumer credit was not a profitable industry

B) They would not be able to compete with loan sharks in the industry of consumer lending

5.

1 point

Which of the following statements BEST describes how Americans are being outsmarted by banks and other lenders?

A) Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and fees continue to destroy our financial well-being.

C) Buying things on credit has become acceptable in our culture.

B) We are taught that we can buy happiness.

D) We are driven by consumerism.

6.

1 point

Which of the following is NOT a factor in becoming money smart?

A) Have knowledge of basic math

C) Manage your behavior with money

B) Learn the language of money

D) Learn how to read your credit card statements

7.

1 point

Most Americans avoid the use of credit when it comes to buying big -ticket items like a car or furniture for their home.

True

False

8.

1 point

Most Americans today are wealthy and will have financial security when they retire.

True

False

9.

1 point

A period of temporary economic decline during which trade and industrial activity are reduced; generally identified by a fall in gross domestic product (GDP)

depression

market economy

recession

debt

10.

1 point

Which of the following is NOT a benefit of understanding your own money personality?

A) Recognizing who you are allows you the opportunity to grow and learn.

B) Once you know your money personality, you can develop a financial plan that works for you.

C) Knowing your money personality allows you to excuse excessive spending because it is simply part of your nature.

D) None of the above.

11.

1 point

A person or organization that uses a product or service

debtor

manager

borrower

consumer

12.

1 point

When it comes to personal finance, the math is easy. Whatʹs challenging is managing your

B) Friends

A) Income

D) Behavior

C) Bank account

13.

1 point

When it comes to managing money, success is about % knowledge and % behavior.

A) 50, 50

D) 20, 80

B) 60, 40

C) 80, 20

14.

1 point

An obligation of repayment owed by one party to a second party

debt

interest

ownership

credit

15.

1 point

Which of the following is a consequence of spending more than you make?

A)Missed opportunity to save and invest

B) Stress

C) A cycle of debt

D) All of the above

16.

1 point

Expensive houses and new cars are a true indication of wealth.

True

False

17.

1 point

Personal financial success is primarily the result of:

C) Generous welfare and unemployment programs

D) Inheriting money from your parents

A) Managing your money behavior

B) Winning the lottery

18.

1 point

A person or business that offers loans at extremely high interest rates

bankers

credit unions

loan shark

creditor

19.

1 point

The knowledge and skillset necessary to be an informed consumer and manage finances effectively

economy

budgeting

financial literacy

consumer

20.

1 point

When developing a personal financial plan, one of the first things you should do is assess your current financial situation. This includes your income, assets and liabilities.

True

False

21.

1 point

Since you are a teenager, what you do now with money will have little effect on your financial future.

True

False

22.

1 point

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.

credit

debt

currency

personal finance

23.

1 point

A system by which goods and services are produced and distributed

marketing

assets

economy

liabilities

24.

1 point

The widespread financial insecurity of Americans is primarily because:

B) The saving rate of Americans is low and many borrow in order to spend more than they earn

A) The incomes of Americans are low

D) Most Americans save a high proportion of their income

C) Government programs are unavailable to help people when they are disabled or experience unemployment

25.

1 point

Which of the following BEST explains why students should learn about personal finance?

D) Learning to manage money will help you achieve a profitable career.

A) Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future.

C) Personal finance skills are highly complex and require a great deal of time to learn.

B) Personal finance skills are better learned through trial and error.

26.

1 point

Which of the following is NOT a true statement?

B) The credit industry in America has not changed much since 1917.

A) Americans learned to borrow amidst post-WWII prosperity.

C) After 1970, consumer debt skyrocketed.

D) As banks made higher profits, they were willing to lend more money to consumers.

27.

1 point

Learning the language of money is not that important because you will be able to depend on financial planners to manage your money.

True

False

28.

1 point

Having debt keeps you from building wealth.

True

False

29.

1 point

Why was the use of credit uncommon prior to 1917?

A) Laws prevented lenders from charging high interest rates.

B) Borrowing money was generally not socially acceptable.

C) Lending money to others was not profitable.

D) All of the above

30.

1 point

Which of the following statements BEST explains why income alone does not determine wealth?

A) Investing is the only factor that contributes to wealth building.

C) Only people who are natural savers can become wealthy.

B) Income alone does determine a personʹs wealth.

D) How much money a person makes does not dictate his or her spending and saving behavior.