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PF CH1 Intro to Personal Finance Flashcards | StudBud
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PF CH1 Intro to Personal Finance
PF CH1 Intro to Personal Finance
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Chapter 1 Review - Introduction to Personal Finance
Flashcards
35 cards
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Practice quiz
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Host live
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Questions
35
Answers
1
34 An obligation of repayment owed by one party to a second party
ownership
debt
2
21 Expensive houses and new cars are a true indication of wealth.
True
False
3
1 Which of the following is NOT a true statement?
As banks profited, they were willing to lend more money.
After 1970, consumer debt skyrocketed.
The credit industry in US has not changed much since 1917.
Americans learned to borrow amidst post-WWII prosperity.
4
26 A person or organization that uses a product or service
consumer
borrower
5
2 Which of the following statements best explains why income alone does not determine wealth?
Income alone does determine a person's wealth.
Only people who are natural savers can become wealthy.
Income does not dictate spending & saving behavior.
Investing is the only factor that contributes to wealth.
6
30 A person or business that offers loans at extremely high interest rates
loan shark
creditor
7
16 As a teenager, what you do now with money will have little effect on your financial future.
True
False
8
5 Key components of financial planning include all of the following except:
Regularly monitor and reassess your financial plan.
Writing a detailed plan for accomplishing your goals.
Allow a financial planner to make your major money decisions
Replace money myths with money truths.
9
20 Everyone should have the same financial plan.
False
True
10
25 When developing a PF plan, one of the 1st things you should do is assess your current situation
False
True
11
7 The widespread financial insecurity of Americans is primarily because
the incomes of Americans are low.
gov't programs are not available for the unemployed.
most Americans save a high % of their income.
the svgs rate in the US is low and many borrow to spend more.
12
28 All of the activities regarding your money, including spending, saving, budgeting, etc
personal finance
currency
13
32 The knowledge and skill set necessary to be an informed consumer & manage finances effectively
budgeting
financial literacy
14
14 Why was the use of credit uncommon prior to 1917?
all of the above
lending money to others was not profitable
borrowing $ was generally not socially acceptable.
laws prevented lenders from charging high interest rates.
15
4 When it comes to managing money, success is about ___% knowledge and ___% behavior.
20, 80
60, 40
50. 50
80, 20
16
31 A period of temporary economic decline
recession
market economy
17
24 Most Americans avoid the use of credit when buying big ticket items like a car or furniture.
True
False
18
35 A debt or "note" which specifies the principal amount, interest rate & date to repay
bank fee
loan
19
27 A system by which goods and services are produced and distributed
economy
assets
20
13 Which of the following is NOT a benefit of understanding your own money personality?
Excessive spending is ok because it's part of who you are.
None of the above.
You can develop a financial plan that works for you.
Recognizing who you are allows the oppty to grow and learn.
21
15 Which of the following is not a reason credit is marketed heavily to consumers in the US?
The credit industry has becomes extremely profitable
There is strong consumer demand for big-ticket items
The use of credit is not socially acceptable in the US
Credit laws became relaxed so people wouldn't use loansharks
22
12 Which of the following is NOT a factor in becoming money smart?
Learn the language of money.
Learn how to read your credit card statements.
Manage your behavior with money.
Have knowledge of basic math.
23
3 Which of the following statements BEST describes how Americans are being outsmarted by banks?
We are driven by consumerism.
Credit is marketed so that we ignore the negative affects.
We are taught that we can buy happiness.
Buying things on credit has become acceptable in our culture
24
29 The granting of a loan and the creation of debt; any form of deferred payment
credit
annual fee
25
17 Having debt keeps you from building wealth.
False
True
26
10 During the Great Depression, New Deal policymakers convinced banks that
Consumers would not be willing to use credit
Consumer credit was not a profitable industry
They would not be able to compete with loan sharks
Consumer credit could be profitable
27
11 When it comes to Personal Finance, the math is easy. What is challenging is managing your
behavior
bank account
income
friends
28
22 Learning the language of money is not important because you will depend on a financial planner
False
True
29
8 Which of the following is a consequence of spending more than you make?
stress
a cycle of debt
all of the above
missed opportunity to save and invest
30
23 Today's credit system is structured to accommodate a state of income instability.
True
False
31
18 Financial security is achieved when your money begins to generate an income.
True
False
32
9 Personal financial success is primarily the result of
inheriting money from your parents.
generous welfare and unemployment programs.
managing your money behavior.
winning the lottery.
33
33 A fee paid by a borrower to the lender for the use of borrowed money
interest
bills
34
19 Most Americans today are wealthy and will have financial security when they retire.
False
True
35
6 Which of the following BEST explains why students should learn about personal finance?
Learning to manage $ can promote future financial benefits.
PF skills are better learned through trial and error.
Personal finance skills are highly complex .
Learning to manage $ will help you have a profitable career.
