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Unit 1 - Introduction to Personal Finance Flashcards | StudBud
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Unit 1 - Introduction to Personal Finance
Unit 1 - Introduction to Personal Finance
35 terms
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Questions
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Answers
1
A debt evidenced by a note, which specifies the principal, interest rate, date of repayment
loan
bank fee
2
The knowledge and skillset necessary to be an informed consumer and manage finances effectively
financial literacy
budgeting
3
4) Personal financial success is primarily the result of:
A) Managing your money behavior
D) Inheriting money from your parents
C) Generous welfare and unemployment programs
B) Winning the lottery
4
Which of the following is not a reason credit is marketed heavily to consumers in the US?
Since 1920 credit laws in the United States have been eased
B) There is strong consumer demand for big-ticket items.
A) The credit industry has become extremely profitable.
The use of credit is not socially accepted in United States
5
When developing a personal financial plan, you should assess your current financial situation
True
False
6
7) Which of the following is not a true statement?
A) Americans learned to borrow amidst post-WWII prosperity.
As banks made more $ they lent more money to consumers
C) After 1970, consumer debt skyrocketed
The credit industry in America hasn't changed much since1917
7
18) Most Americans today are wealthy and will have financial security when they retire.
False
True
8
38) A fee paid by a borrower to the lender for the use of borrowed money
bills
interest
9
Since you are a teenager, what you do now with money will have little effect on your future
True
False
10
A period of temporary economic decline during which trade and industrial activity are reduced
recession
market economy
11
Which of the following best explains why students should learn about personal finance?
Personal finance is trial and error
Learning to manage money will help you get rich quick
Learning to manage money at this stage can eliminate mistake
Personal finance skills are highly complex
12
An obligation of repayment owed by one party to a second party
ownership
debt
13
9) The widespread financial insecurity of Americans is primarily because:
Government programs are unavailable to help the unemployed
D) Most Americans save a high proportion of their income
A) The incomes of Americans are low
Saving rate of Americans is low many borrow to spend more
14
39) A system by which goods and services are produced and distributed
assets
economy
15
11) Which of the following is not a benefit of understanding your own money personality?
Your money personality gives you a excuse excessive spending
D) None of the above.
Understanding yourself allows the opportunity to grow/learn.
Your money personality, you can develop a financial plan
16
36) The granting of a loan and the creation of debt; any form of deferred payment
annual fee
credit
17
13) When it comes to personal finance, the math is easy. Whatʹs challenging is managing your
Bank account
A) Income
Behavior
Friends
18
8) When it comes to managing money, success is about % knowledge and % behavior.
20/80
80/20
60/40
50/50
19
The credit system today is structured to utilize high interest rates/fees to turn huge profits.
True
False
20
The New Deal policymakers came up with mortgage policies that convinced banks to loan to:
C) Consumer credit could be profitable
They would not be able to compete with loan sharks
D) Consumer credit was not a profitable industry
A) Consumers would not be willing to use credit
21
Which of the following is a consequence of spending more than you make
Stress
A cycle of debt
All of the above
A) Missed opportunity to save and invest
22
34) A person or organization that uses a product or service
borrower
consumer
23
21) Having debt keeps you from building wealth.
False
True
24
Learning the language of money is not that important because you will have financial planners
True
False
25
10) Which of the following is not a factor in becoming money smart?
B) Learn the language of money
A) Have knowledge of basic math
D) Learn how to read your credit card statements
C) Manage your behavior with money
26
Key components of financial planning include all of the following except:
D) Regularly monitor and reassess your financial plan
B) Replace money myths with money truths
Write out a detailed plan for accomplishing your goals
Allow your financial planner to make all of your decisions
27
Why was the use of credit uncommon prior to 1917?
C) Lending money to others was not profitable.
D) All of the above.
A) Laws prevented lenders from charging high interest rates
B) Borrowing money was generally not socially acceptable
28
33) A person or business that offers loans at extremely high interest rates
loan shark
creditor
29
Everyone should have the same financial plan.
False
True
30
23) Expensive houses and new cars are a true indication of wealth.
True
False
31
Which of the following statements best describes how Americans are being outsmarted by banks?
A) Credit is marketed so well that we desire to have it
B) We are taught that we can buy happiness.
Buying things on credit has become acceptable in our culture
D) We are driven by consumerism.
32
All of the family decisions regarding their money, including spending, saving, budgeting
budgeting
personal finance
33
Most Americans avoid the use of credit when it comes to buying items like a car or furniture
False
True
34
5) Which of the following statements best explains why income alone does not determine wealth?
B) Income alone does determine a personʹs wealth.
C) Only people who are natural savers can become wealthy.
D) How much money a person makes doesnt dictate their saving
Investing is the only factor that contributes to wealth
35
True financial security is achieved when your money begins to generate an income
False
True
