Chapter 1

Question 1

which of the following best explains why students should learn about personal finance?

Answer 1

learning to manage money at this stage can eliminate financial mistakes

Question 2

key components of financial planning include all of the following except?

Answer 2

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

Question 3

which of the following statements best describes how americans are being outsmarted by banks and other lenders

Answer 3

credit is marketed to make us ignore interest rates and fees that destroy

Question 4

personal financial success is primarily the result of

Answer 4

managing your money behavior

Question 5

which of the following statements best explains why income alone does not determine wealth

Answer 5

how much money you make does not dictate your spending and saving behavior

Question 6

which of the following is a consequence of spending more than you make

Answer 6

1.missed opportunity to save and invest 2.stress 3. a cycle of dept

Question 7

which of the following is not a true statement

Answer 7

the credit industry in america has not changed much since 1917

Question 8

when it comes to managing success is about _% knowlege and _% behavior

Answer 8

20, 80

Question 9

the wide spread financial insecurity of americans is primarily because

Answer 9

the saving rate of americans is low and many soend more than they make

Question 10

which of the follwing is not a factor in becoming money smart

Answer 10

learn how to read your credit card statements

Question 11

which of the following is not a benefit of understanding your own money personality

Answer 11

knowing yoyr money personality allows you to excuse exessive spending

Question 12

why was the use of credit uncommom prior to 1917

Answer 12

1.borrowing money was generally not socially acceptable 2. laws prevented lenders from charging high interest rates 3. lending money to others was not profitable

Question 13

when it comes to peronal finance, the math is easy. whats challenging is managing your

Answer 13

behavior

Question 14

which of the following is not a reason credit is marketed heavily to consumers in the united states

Answer 14

the use of credit is not socially accepted in the united states

Question 15

new deal policymakers came up with mortgage amd consumer lending polocies that convinced banks that

Answer 15

consumer credit could be profitable

Question 16

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

Answer 16

true

Question 17

since your a teenager what you do now with money will have little effect on yoyr financial future

Answer 17

false

Question 18

most americans today are wealthy and will have financial security when they retire

Answer 18

false

Question 19

most americans avoid the use of credit when it comes to buying big ticket items like a car or funiture for thier home

Answer 19

false

Question 20

learning the language of money is not that important because you will be able to depend on financial planners

Answer 20

false

Question 21

having debt keeps you from building wealth

Answer 21

true

Question 22

the credit system is structured to utilize high interest rates and fees to turn huge profits

Answer 22

true

Question 23

expensive houses and new cars are a true indication of wealth

Answer 23

false

Question 24

when developing a personal financial plan, 1 of the first things to do is assess your current fianancial situation

Answer 24

true

Question 25

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

Answer 25

false

Question 26

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

Answer 26

loan shark

Question 27

a person or organization that uses a product or service

Answer 27

consumer

Question 28

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

Answer 28

debt

Question 29

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

Answer 29

credit

Question 30

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

Answer 30

financial literary

Question 31

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

Answer 31

interest

Question 32

a system by which goods and services are produced and distributed

Answer 32

economy

Question 33

a debt evidence by a note, which specifies the principal amount interest rate, and date of repayment

Answer 33

loan`

Question 34

a period of temporary economic decline during which trade and industrial activity are reduced

Answer 34

recession; loan

Question 35

all of the decisions and activities of an individual or family regarding thier money, including spending, saving, etc

Answer 35

loan; personal finance