Personal Finance Chapter 1 Review

Question 1

16. True financial security is achieved when your money begins to generate an income -your money starts working for you.

Accepted Answer

True

Question 2

31. A fee paid by a borrower to the lender for the use of borrowed money.

Accepted Answer

interest

Question 3

5. Which of the following statements best explains why income alone does not determine wealth?

Accepted Answer

How much you make does not dictate your spending and saving behavior.

Question 4

9. The widespread financial insecurity of Americans is primarily because:

Accepted Answer

American's saving rate is low and many borrow to spend more than earned

Question 5

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

Accepted Answer

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

Question 6

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

Accepted Answer

False

Question 7

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

Accepted Answer

financial literacy

Question 8

1. Which of the following best explains why students should learn about personal finance?

Accepted Answer

It can eliminate financial mistakes and promote future financial benefits.

Question 9

13. When it comes to personal finance, the math is easy. What is challenging is managing your ______

Accepted Answer

Behavior

Question 10

35. Decisions & activities of an individual or family regarding their money, including spending, saving, budgeting, etc.

Accepted Answer

personal finance

Question 11

15. New Deal policymakers came up with home loans and consumer lending policies that convinced commercial banks that:

Accepted Answer

Consumer credit could be profitable

Question 12

27. A person or organization that uses a product or service

Accepted Answer

consumer

Question 13

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

Accepted Answer

loan

Question 14

7. Which of the following is not a true statement?

Accepted Answer

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

Question 15

22. The credit system is made to help with uncertain jobs and income, using high interest rates and fees to make money.

Accepted Answer

True

Question 16

10. Which of the following is not a factor in becoming money smart?

Accepted Answer

Learn how to read your credit card statements

Question 17

11. Which of the following is not a benefit of understanding your own money personality?

Accepted Answer

It allows you to excuse extra spending because it is part of your nature.

Question 18

21. Having debt keeps you from building wealth.

Accepted Answer

True

Question 19

2. Key components of financial planning include all of the following except:

Accepted Answer

Allow your financial planner to make all of your major money decisions

Question 20

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

Accepted Answer

False

Question 21

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

Accepted Answer

False

Question 22

32. A system by which goods and services are produced and distributed

Accepted Answer

economy

Question 23

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

Accepted Answer

debt

Question 24

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

Accepted Answer

We ignore that interest rates and fees destroy our financial well-being.

Question 25

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

Accepted Answer

All of the above

Question 26

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

Accepted Answer

credit

Question 27

25. Everyone should have the same financial plan. A budget that works for one person should be sufficient for everyone.

Accepted Answer

False

Question 28

24. When making a financial plan, the first thing you should do is assess your current financial situation.

Accepted Answer

True

Question 29

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

Accepted Answer

20, 80

Question 30

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

Accepted Answer

loan shark

Question 31

4. Personal financial success is primarily the result of:

Accepted Answer

Managing your money behavior

Question 32

12. Why was the use of credit uncommon prior to 1917?

Accepted Answer

All of the above.

Question 33

20. Learning the language of money isn't important. You'll be able to depend on financial planners to manage your money.

Accepted Answer

False

Question 34

34. A period of temporary economic decline during which trade and industrial activity are reduced.

Accepted Answer

recession

Question 35

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

Accepted Answer

False

Personal Finance Chapter 1 Review

Questions 35

Personal Finance Chapter 1 Review

Questions 35