The First Foundation is

Save $500 for an emergency fund

In 1972, which association made borrowing money to attend college much easier?

The Student Loan Marketing Association (SLMA)

You should be aware whether you are a saver or a spender because...

Personal finance is 80% behavior so behavior primarily affects my finances.

Which of the following are The Five Foundations?

Save $500 for an emergency fund.

FDR passed the New Deal because of the Great Depression of the 1930s. What was the purpose of this New Deal?

To promote economic recovery and social reform

The Five Foundations are

a personal financial action plan

The difference between short-, medium-, and long-term financial goals is

short=up to 2 years; medium=up to 5 years; long term=more than 5 years

As a single adult, you should

keep managing your money as a priority

Savers have a tendency to be

strict with their money and not spend any of it

Living paycheck to paycheck means

income is devoted entirely to expenses so no money can be saved

Fiancial goals should be

specific, measureable, time-sensitive, yours, and written

After WWI, demand for products increased and people began buying on credit. Because of this credit...

Started to become more socially acceptable

Financial literacy is ...

having the knowledge and skill set required to handle money effectively

The best way to avoid running out of money too quickly is to ...

make it a habit to plan and set goals for your money

To gain an understanding of your personal finances, you must know

where you stand financially, your income, your goals and how to reach them

Making accurate choices with money involves knowing how...

Earning, budgeting, saving, spending, and giving affect your money.

To calculate net worth

subtract liabilities from assets

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Economics Chapter 1 Test

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Questions 40

Answers

1
The First Foundation is
Pay cash for college
Save $500 for an emergency fund
Open a checking account
Build wealth and give
2
Personal finance is all financial decisions a ______ must make to earn, budget, save, spend, and give money over time.
Nobody's business but mine
Bank
Individual or company
Individual or family
3
Avoiding debt can lead to financial freedom and hope.
False
True
4
You should always make sure you have a
direct deposit
debit card
credit card
budget
5
How does your money personality affect your spending behavior?
As a saver, I take few risks with my money.
As a spender, I do not consider the future enough.
As a saver, I never spend money on anything.
All of the above are correct.
6
Which of the following explains how The Five Foundations help with money management now?
A and B only.
Following them will keep me on the right financial course
I will learn how to write checks.
I will win with money.
7
In 1972, which association made borrowing money to attend college much easier?
The Federal Student Approval Association (FSAA)
The Student Loan Approval Association (SLAA)
The Student Loan Marketing Association (SLMA)
Farmers Only Dot Com (FODC)
8
Which of the following is one of The Five Foundations?
BMWs are the Ultimate Driving Machines.
Car loans are a good financial option since the interest rates are so low.
AOC drives a Tesla.
Pay cash for your car.
9
If your assets total more than your liabilities, you have a _______ net worth.
negative
unknown
equal
positive
10
You should be aware whether you are a saver or a spender because...
Personal finance is 80% behavior so behavior primarily affects my finances.
Personal finance is 40% behavior so behavior primarily affects my finances.
Businesses do not hire spenders.
Knowing ourselves is the highest calling.
11
Which of the following is one of The Five Foundations?
Going to college is a poor financial decision.
Rack up as much college debt as you can, our President will cancel it.
Student loans are the best economic choice to pay for college.
Pay cash for college.
12
Banks got into the credit businsess before 1920 because charging exceptionally high interest rates was legal.
False
True
13
You are either only a natural saver or a natural spender. You cannot have the balance of both.
True
False
14
Which of the following are The Five Foundations?
Save $50,000 for an emergency fund.
Save $500 for an emergency fund.
It is pointless to save for an emergency fund at my age.
Save $5,000 for an emergency fund.
15
A money principle to keep in mind is to live on ____ you make.
less than
the same amount
exactly 20% below what
more than
16
FDR passed the New Deal because of the Great Depression of the 1930s. What was the purpose of this New Deal?
To promote climate change
To divide the national budget in half and distribute it
To promote economic recovery and social reform
To create a borrowing system within the country
17
The Five Foundations are
a personal financial action plan
a financial literacy technique
a common conclusion for debt
a starting point for adults regarding finances
18
Personal finance is 20% ______ and 80% ______.
reactions; behavior
cause; effect
behavior; head knowledge
head knowledge; behavior
19
The difference between short-, medium-, and long-term financial goals is
short=up to 2 years; medium=up to 5 years; long term=more than 5 years
short=up to 2 months; medium=up to 5 months; long term=more than 5 months
short=up to 2 days; medium=up to 5 days; long=more than 5 days
all goals should be short-term
20
As a single adult, you should
date as many people as you can before it's too late
beward of planned and budgeted buying
seek a financial counselor or advisor by age 25
keep managing your money as a priority
21
Savers have a tendency to be
strict with purchases while spending money without a plan
strict with what they spend their money on, except for groceries
strict with purchases only for themselves
strict with their money and not spend any of it
22
It is possible to pay for college with cash.
False
True
23
A ______ financial goal takes up to two years to reach.
Long-term
Five-level
Short-term
Medium-term
24
Which of the following is one of The Five Foundations?
Build houses and charge the highest price the market will bear
Throw away tv, have lots of kids, move to the country, and build a home.
Build bridges and charge the highest toll possible
Build wealth and give
25
Which financial goal takes up to two years to reach?
Five-level
Short-term
Long-term
Medium-Term
26
Living paycheck to paycheck means
income is devoted entirely to expenses so no money can be saved
not depositing paychecks
not being able to plan past the next paycheck due to outside circumstances
eagerly awaiting the next paycheck to plan for the month's expenses
27
Without any debt, you can be outrageously ______.
good-looking
generous
selfish
thrifty
28
Using credit has not always been socially acceptable, but it has become
necessary for American life
normal in American culture
a whole lot of fun
less acceptable
29
Fiancial goals should be
specific and measureable
specific, measureable, time-sensitive, yours, and written
timely, bank-based, specific and yours
only time-sensitive
30
Being a spender has many more positives than being a saver.
False
True
31
Your money personality impacts your
what you plan for as an adult
how you handle money
understanding of bank transactions
your financial literacy level
32
An important money principle to consider is that you should ______ and ______ your money.
save; invest
steal; horde
invest; layout
spend; invest
33
Which of the following is one of The Five Foundations?
Get out and stay out of debt.
Debt is necessary in today's world economy.
It is okay to go into debt because you deserve to have everything you want.
It is okay to incur debt as you can always live in your parents' basement.
34
After WWI, demand for products increased and people began buying on credit. Because of this credit...
No one knows or cares
Increased so rapidly loan sharks became obsolete
Was devalued in the marketplace
Started to become more socially acceptable
35
Financial literacy is ...
reading books about finance
overrated
the ability to read account statements
having the knowledge and skill set required to handle money effectively
36
The best way to avoid running out of money too quickly is to ...
avoid making any purchases for the next 30 days
make it a habit to plan and set goals for your money
invest in crypto currency
put all your money in a safe place and do not spend it
37
To gain an understanding of your personal finances, you must know
your financial goals
where you stand financially, your income, your goals and how to reach them
how much money you make
your investment portfolio and your financial advisor's contact information
38
Making accurate choices with money involves knowing how...
Planning, spending, and investing defines a person's financial portfolio.
Consumer decisions affect my accounts
Earning, budgeting, saving, spending, and giving affect your money.
To make deposits into a bank account.
39
To calculate net worth
add liabilities to assets
subtract liabilities from assets
subtract liabilities from checking accounts
subtract assets from checking accounts
40
What is The Fifth Foundation?
Find a financial professional.
Only marry a person who has a lot of money.
Build wealth and give.
Pay cash for your car.

Economics Chapter 1 Test Flashcards | StudBud