Fin 300

If you borrow $200 and it cost you $27 in interest with a service charge of $6, what is the finance charge?

$33 Reason: $27 + $6 = $33

A certified check is a personal check with a _____ payment.

Guaranteed

A Savings Bond that has an interest rate based on two components is a(n):

I bond

Which tool provides options for checking your refund status, requesting tax records, locating free tax prep help, and accessing other interactive tools?

IRS2Go App

The simplest type of IRS audit is the _____ audit.

correspondence

If you _____ a loan and the borrower does not pay the debt, you may have to pay up to the full amount of the debt as well as any late fees.

cosign

Using savings for paying _____ expenses is one of the mistakes people make when managing current cash needs.

current

A tax Blank______ reduces taxable income, thereby reducing the tax liability.

deduction

Taxpayers pay income taxes either through payroll _____ or through estimated tax _____.

deductions; payments

Mutual savings banks are owned by

depositors

Another name used for calculating present value is ______. Compounding is the other term for future value.

discounting

The rule of 72 is used to estimate the time that it would take for your money to:

double

Money market accounts at commercial banks are insured by ______, whereas money market funds are not.

federal deposit insurance

A rise in the general level of prices is called:

inflation

All of the following are deposit institutions that serve as financial intermediaries except: commercial banks. credit unions. savings and loan associations. insurance companies.

insurance companies

Spending all of your money on credit card bills will:

leave you with no spending money

When reviewing applications for credit:

lenders use the five Cs as a way of determining who is worthy of the credit

To achieve long-term financial goals, many people trade off _____ for a _____ return.

liquidity; higher

A drawback of U.S. savings bonds is:

lower rates for early redemption.

The tax rate on your next dollar of taxable income is called the:

marginal tax rate.

A ______ fund is an account used for savings offered by investment companies.

money market

A _____ savings bank is owned by depositors and specializes in savings and mortgages.

mutual

To calculate the debt payments to income ratio, total monthly debt payments (excluding home mortgage) is divided by the _____ monthly income of the consumer.

net

One convenient aspect of using credit is that multiple charges can be accumulated and paid in one monthly

payment

Money management refers to the daily financial activities necessary to manage current ______ economic resources while working toward long-term financial security.

personal

Rachel has been shopping for a new refrigerator over the course of three days and has been putting all her household chores on hold. She finds a refrigerator that fits her needs and purchases it. This is an example of:

personal opportunity costs.

A credit file contains your detailed _____information

personal, financial, credit, or private

A person would file as head of household if he or she is: - unmarried with a dependent child - married - married, but separated from his spouse - unmarried with no dependents

unmarried with a dependent child

When making online purchases, you should:

use a secure browser, keep a record of the purchase, and review your statement.

Estate taxes are calculated on the ______ of a person's property at death.

value

Lenders may determine a potential borrower's character by all of the following except: checking personal or professional references. checking the potential borrower's credit report. verifying how long you have been at your current job. verifying the potential borrower's income.

verifying the potential borrower's income.

Joe borrowed $100,000 (a four-year loan at 10 percent interest) on January 2, 2020. During the course of the year, he paid back $30,000 on that debt. What would his December 31, 2020 balance sheet show for this debt? Interest is an expense and not part of the loan balance.

$70,000 because the balance sheet should report what is owed on the balance sheet date.

Which of the following is a financial statement that reports what an individual or a family owns and owes?

Balance sheet

Travel expenses should be documented in a daily log with records of mileage, tolls, parking fees, and lodging costs.

True

True or False: Budgets allow you to live within your income while increasing your chances of achieving your financial goals.

True

True or False: Net worth is found by subtracting liabilities from assets.

True

True or False: The steps to prepare a budget include setting financial goals, estimating expected income, budgeting for emergency funds and expenses, recording actual expenses, calculating variances, and evaluating.

True

True or False? People should prepare a personal balance sheet on a periodic basis to evaluate financial progress.

True

True or false: A key factor in making financial decisions is time value of money.

True

True or false: Financial goals should be specific, realistic, measurable, have a time frame, and imply the type of action to be taken.

True

True or false: Income tax is paid during the year through withholding from paychecks and/or estimated payments.

True

When evaluating your budget, you should review and perhaps revise your financial goals and budget allocations and review your financial progress.

True

True or false: While municipal bonds pay a lower rate of interest than other types of bonds, the after-tax income may be higher than other types of bonds.

True Reason: Because the interest is tax free, the after-tax income might be higher than corporate bonds, especially for high income tax payers.

Determining your current financial situation is the ______ step in the financial planning process.

first

The amount to which current savings will increase based on a certain interest rate and a certain time period is called:

future value

John owed $10,000 in taxes on taxable income of $40,000. If John earns an additional $1,000, he will pay an additional $280. Therefore:

his average tax rate is about 25% Reason: His average tax rate after earning the additional $1,000 would be about 25% (($10,000+$280)/($40,000+$1,000)).

The two main types of taxes on wages and salary are federal and state ______ tax and Social Security tax.

income

Medical costs, taxes, and interest are all examples of _____ deductions that are subtracted from adjusted gross income.

itemized

Tax avoidance means using _____ strategies to reduce taxes, while tax _____ involves using illegal means to lower tax liability.

legal; evasion

When people first begin planning for retirement, saving for a child's college education, and planning the purchase of a vacation home, these are usually:

long-term goals

The biggest difference between a(n) _____ IRA and a Roth IRA is that the Roth IRA contribution is not tax deductible, but after five years, its earnings are tax free.

regular

When consumer, business, government, and foreign borrowing increase the demand for money, interest rates tend to:

rise

According to the text, there are ______ main factors that contribute to Americans having money problems.

two

Time ______ of money calculations can be used to calculate progress toward achieving different financial goals.

value

A specific stop-payment order given to a bank is designed to:

avoid paying a specific check that is lost or stolen.

When comparing savings accounts rates of return, you should choose one that:

beats the rate of inflation

An automatic teller machine (ATM) is also called as a(n) " _____ machine."

cash

A savings plan that requires a certain amount of money to be left for a specified amount of time is a:

certificate of deposit

A _____ check is a personal check with guaranteed payment.

certified

A loan for a motorcycle is an example of:

closed-end credit

An example of _____ -end credit is an automobile loan, whereas an example of _____ -end credit would be a credit card.

closed; open

Using compounding, how much interest will be earned in the second year of a savings account that has an original balance of $100 and earns 5 percent interest per year?

$5.25 Reason: In the first year, the saver would earn 100X0.05=$5. In the second year, she would earn interest on both the principal and the interest. With the beginning account balance being 105, the second year's interest would be 105X0.05 = $5.25.

If a card issuer uses the same rules as lost or stolen debit cards, what is the maximum amount of liability for lost or stolen credit cards reported within 60 days?

$50

What would be the interest cost (simple interest) for a $2,000 loan with a 6% rate for a half of a year?

$60 Reason: Simple interest=Principal X Rate X Time. In this case, time is 0.5 (for one-half of a year).

Select all the accurate observations below about different types of audits. - The simplest audit is a correspondence audit. - A field audit involves an IRS agent visit to your home or office and is the most complex type of audit. - With an office audit, you must visit the IRS office to answer questions about your return. - An office audit usually is the most complex type of audit.

- The simplest audit is a correspondence audit. - A field audit involves an IRS agent visit to your home or office and is the most complex type of audit. - With an office audit, you must visit the IRS office to answer questions about your return.

Common mistakes made when managing current cash needs include: delaying a purchase for a lower price. - using savings for current expenses. - leaving funds in low-interest accounts too long. - saving too much money. - lacking sufficient liquid assets to pay current bills. overspending.

- using savings for current expenses. - leaving funds in low-interest accounts too long. - lacking sufficient liquid assets to pay current bills. overspending.

If you want to amend (change) a previous return, you would need to file a ______ form.

1040X

Two possible tax planning activities for April _____ are filing the tax return by April , and, if necessary, filing for an automatic _____.

15th; extension

If you are in the 28% tax bracket and owe $20,000 on $100,000 of taxable income, your average tax rate and marginal tax rate would be, respectively:

20% for average and 28% for marginal Reason: The average tax rate is $20,000 divided by $100,000, which is 20%. The marginal tax rate is given - it is the "tax bracket."

If inflation is 3 percent, a saver would want to earn an interest rate greater than:

3 percent

A $200 savings account that earned $8 after a year would have a rate of return, or yield, of ______ percent. (Assume annual compounding.)

4% Reason: 8/200 = 0.04 = 4%

Tom needs a new washing machine. A new one costs $400. He decides to save and buy one next year. All other factors being equal, if inflation is 4%, the washing machine will cost $_____ next year.

416 (400x4%= $16) ($16+$400= $416)

You are in the 25 percent tax bracket. So, the yield on the savings account is 8 percent, and the after-tax savings rate of return is ______ percent.

6% Reason: 8%X(1-0.25)=6%

The contribution limit is $_____ for workers under 50 years old.

6,000

Fraud charges should be reported within how many days of receiving your statement to protect your right not to be charged for the transaction?

60 Reason: Fraud charges should be reported as soon as the card holder notices - if reported within 60 days the right not to be charged for the transaction is protected.

What is a credit bureau?

A reporting agency that collects information on how promptly people and businesses pay their bills

_____deposits include checking accounts and other payment methods.

Demand

Which month is the deadline to file your federal tax return or file an extension if necessary?

April

The _____ handles complaints regarding credit cards online.

CFPB

Which of the following is defined as your ability to pay additional debts? Collateral Character Capacity Capital

Capacity

Which type of financial institution typically charges higher rates? Credit unions Commercial banks Savings and loans Check-cashing outlets

Check-cashing outlets

_____ banks are organized as corporations, with investors contributing the capital for operations.

Commercial

What types of financial institutions have federal deposit insurance? Investment companies Commercial banks Credit unions Savings and loans

Commercial banks Credit unions Savings and loans

_____ is a process that calculates interest based on previously earned interest.

Compound

_____ is an arrangement to receive cash, goods, or services now and pay for them in the future.

Credit

Which of the following is something that the Equal Credit Opportunity Act is designed to do?

Ensure that persons are not discriminated against because of their race, sex, race

True or false: Debit cards allow you to wait to deduct the amounts from your account.

False

True or false: The Fair Credit Reporting Act was enacted in 1968.

False Reason: Its establishment was in 1971.

True or false: The three names of the major credit reporting agencies are Trans Union, Equifax, and Experiment.

False Reason: The third agency is Experian.

What occupation began using credit first?

Farmers

Under the Consumer Credit Reporting Reform Act, what would happen if a Credit Bureau verifies inaccurate information?

If the Credit Bureau is wrong about information, the consumer can sue for actual, possibly punitive damages.

Why should you care how to use credit? - If you misuse credit, you will pay for it with future income and it could take many years to pay off the debt. - Credit is designed to be available for all consumers and, thus, will be available to all that need to use it. - You don't have to worry about misusing credit because you can always pay it off with your income and increase your credit limit.

If you misuse credit, you will pay for it with future income and it could take many years to pay off the debt.

Which of the following are good deterrents of identity theft? Keeping checks in a safe place Not opening credit card accounts Shredding documents before throwing them away Changing your mailing address frequently

Keeping checks in a safe place Shredding documents before throwing them away

_____ is the attribute of savings accounts that allows you to withdraw money on short notice without a loss of principal or fees.

Liquidity

Which of the following best describes why the home can be a tax shelter? - Capital gains on a home when sold are always tax free. - Mortgage interest and real estate taxes are tax deductible, which helps lower the cost of home ownership. - Rent paid by the head of household is tax deductible on Schedule A of the 1040, thereby lowering the cost of a home. - Only gains in excess of $100,000 are taxable when a home is sold.

Mortgage interest and real estate taxes are tax deductible, which helps lower the cost of home ownership.

To calculate the debt payments to income ratio, total monthly debt payments (excluding home mortgage) is divided by the _____ monthly income of the consumer.

Net

What is the best strategy if you can't make a payment on a debt?

Notify the creditor as soon as possible in an attempt to work out a modified payment plan.

Check-cashing outlets do not offer which of the following services? Payday loans Money orders Electronic tax filing Utility bill payments

Payday loans

Which of the following are considered demand deposits? Payment accounts Checking accounts Savings accounts

Payment accounts Checking accounts Reason: Savings accounts are considered time deposits, because they can have limits on transfers or withdrawals.

What is the current value of a future amount based on a certain interest rate and a certain time period?

Present value

All but how many states currently have some type of state income tax?

Seven

Which of the following items of income and value are protected under a Chapter 7 bankruptcy? Social Security payments and unemployment compensation All stocks and bonds Household appliances Recreational equipment Equity in cars Equity in home Trade tools

Social Security payments and unemployment compensation Household appliances Equity in cars Equity in home Trade tools

Why should you avoid sharing sensitive personal information with strangers?

Strangers can take this information and purchase items in your name.

How does a consumer confirm that they can afford a loan payment?

The consumer's take-home pay covers monthly expenses, loan payment, and other expenses.

What are the advantages to overspending with credit?

There are no real advantages to overspending on credit

Why are the five Cs used?

To help identify good customers for credit approval

What is the main function of a finance company?

To make loans to consumers and small businesses

True or false: Time deposits include money in savings accounts and certificates of deposits.

True

True or false: A tax credit is an amount subtracted directly from taxes owed.

True Reason: A tax credit directly reduces taxes owed.

True or false: Asset management accounts are a collection of financial services offered for a single fee.

True Reason: Asset management accounts are designed to be an all-purpose account location.

True or false: The FCBA is a major reason that consumers should buy high dollar items with a credit card rather than a debit card.

True Reason: The FCBA provides he consumer with recourse against a retailer on a credit card purchase

True or false: The Fair Debt Collection Practices Act prohibits certain practices by agencies that collect debts for creditors.

True Reason: The act regulates the way collection agencies do business. For example, a debt collector may not contact you at inconvenient times or places.

Banks prefer customers with high credit scores.

True Reason: This means there is less risk involved.

Using credit is safe, since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

True Reason: Using credit is safe, since charge accounts and credit cards let you shop and travel without carrying a large amount of cash.

The calculation of your total tax due begins by using your taxable income with either tax tables or a tax schedule.

True. Reason: The calculation of your total tax due begins by using your taxable income with either tax tables or tax schedule.

Which of the following is not a warning sign of debt problems?

You pay your monthly credit card statement in full.

If you have made estimated quarterly payments totaling $4,000 and your annual taxes owed total $3,700, then what would happen?

You will receive a refund of $300.

The tax rate that is used to calculate the tax on the last (or next) dollar of taxable income is:

a marginal tax rate.

A bank line of credit is also known as:

a revolving check credit

The ______ is the percentage rate expressing the total amount of interest that would be received based upon time and compounding.

annual percentage yield

The first thing a debtor must do in a Chapter 7 bankruptcy is to draw up a petition listing ____ and liabilities for submission to the court.

assets

EE bonds are exempt from state and local taxes, but federal income tax is typically due:

at redemption

Inflation is a rise in the general level of ______.

prices

A _____ and loan association traditionally specializes in savings accounts and mortgage loans.

savings

Family members may only charge interest they would have earned on the money if they had deposited it in a ______ account.

savings

Assets protected in a Chapter 7 bankruptcy do NOT include: vehicle savings account net value of home social security payments

savings account

A line of credit is a _____- term loan that is approved before you actually need the money.

short

Financial services will usually not be affected by: stock prices. interest rate fluctuations. various economic factors. rising consumer prices.

stock prices.

Your ______ income is the basis for computing the amount of tax owed.

taxable

When referring to credit, character means:

the borrower's attitude toward credit obligations

Consumer credit through installment payments became popular in the early part of the 20th century due to:

the popularity of the automobile

A reason why people tend to choose long-term financing is:

they want to make smaller monthly payments

To calculate the debt payments to income ratio:

total monthly debt payments (excluding home mortgage) are divided by net monthly income

If expected expenditures for food were $1,000 while the actual food costs were $750, what would be the variance?

$250 favorable

In the context of global influences, which of the following statements are true of American consumers and American businesses? - American businesses compete against foreign companies for the spending dollars of American consumers. - American businesses have no competitors in the global economy. - American consumers provide foreign companies with a market. - The global economy is solely driven by American consumption.

- American businesses compete against foreign companies for the spending dollars of American consumers. - American consumers provide foreign companies with a market.

Which of the following are the major money management activities?

- Creating and implementing a plan for savings - Storing and maintaining personal financial records - Preparing personal financial statements

Which of the following are part of evaluating alternative courses of action in the financial planning process?

- Evaluating risk - Considering the consequences of your choices - Considering inflation risk

According to the text, what are the main reasons Americans have financial problems?

- Poor planning and weak management of money habits. - Advertising efforts and availability of goods encourage overspending.

Determining your current financial situation involves which of the following? - Preparing your personal financial statements. - Assessing your risk. - Creating and implementing your financial action plan. - Identifying current income, savings, living expenses, and debts.

- Preparing your personal financial statements. - Identifying current income, savings, living expenses, and debts.

Which of the following can help you to achieve your financial goals? - Invest 40 percent of your annual salary in a new sports car. - Save between 5 percent and 10 percent of each paycheck. - Buy long-term bonds with deductions from every other paycheck. - Save coins in a jar at the end of each day for deposit at a future time into a savings account. - Write a check each payday to deposit into a savings account. - Have savings deducted and automatically deposited into a savings account from each paycheck.

- Save between 5 percent and 10 percent of each paycheck. - Save coins in a jar at the end of each day for deposit at a future time into a savings account. - Write a check each payday to deposit into a savings account. - Have savings deducted and automatically deposited into a savings account from each paycheck.

Which of the following provide accurate explanations of net worth?

- The amount you would have if you sold the assets and paid off the liabilities - Assets minus liabilities

Which of the following statements are true about software and taxes? - You can save time while preparing Form 1040 and its accompanying schedules. - Software packages such as H&R Block At Home and TurboTax help users prepare and file returns. - You can directly submit your tax return without preparing Form 1040 by using a spreadsheet program. - A spreadsheet program can help you keep track of income and expenses as the year plays out.

- You can save time while preparing Form 1040 and its accompanying schedules. - Software packages such as H&R Block At Home and TurboTax help users prepare and file returns. - A spreadsheet program can help you keep track of income and expenses as the year plays out.

Interest rates are affected by the following: - demand for money. - supply of money. - the cost of real estate only. - time value of money.

- demand for money. - supply of money.

Examples of opportunity costs do NOT include: - having enough money to fund retirement and pay for current expenses. - forfeiting interest and taking money from savings and purchasing new appliances to save energy costs. - being able to work and go to school at the same time. - accepting a low yield because you have chosen low-risk investments.

- having enough money to fund retirement and pay for current expenses. - being able to work and go to school at the same time. - accepting a low yield because you have chosen low-risk investments.

Opportunity costs can be viewed in terms of_____ and _____ resources.

- personal resources. - financial resources.

Arrange the steps involved in the process of budgeting in the correct order of occurrence.

- set financial goals - Estimate income - Budget an emergency fund and savings - Budget fixed expenses - Budget variable expenses - Record spending amounts - Review spending and savings pattern

Key factors for most people in making financial decisions include:

- time value of money - inflation costs - financial opportunity costs

Examples of opportunity costs include: - trading in a large car with poor gas mileage for a smaller car that is fuel-efficient. - not having as much money in savings because you purchased new appliances to save energy costs. - having enough money to save for retirement and to pay for current expenses. - delaying investment while waiting for the time value of money to increase the pay received. - not getting a high yield because you have set aside funds in a low risk investment.

- trading in a large car with poor gas mileage for a smaller car that is fuel-efficient. - not having as much money in savings because you purchased new appliances to save energy costs. - delaying investment while waiting for the time value of money to increase the pay received. - not getting a high yield because you have set aside funds in a low risk investment.

John has an interest rate of 7.2% on his savings account. Using the Rule of 72, his money will double in _____ years.

10 (72 / 7.2)

Samantha wants to buy a new watch that costs $100. She decides to wait a year. All other factors being equal, if inflation is 4%, the watch will cost $ next year.

104 ($100x4%=$104)

The second installment for estimated tax is due by June _____.

15

Phillip has an investment of $200 that is expected to earn 10% annually. How much will the investment be worth at the end of the second year if the investment earns interest compounded annually?

242 ($200 X 0.10 X 1 =$20 in interest. $200 + $20 = $220 at the end of the first year. At the end of the second year he'll have: $220 X 0.10 X 1 =$22 in interest. $220 + $22 = $242).

Which of the following statements is true? - An adequate emergency fund is usually 3-6 months of living expenses - An adequate emergency fund is usually 3-6 months of gross pay - An emergency fund should be invested in stocks - An adequate emergency fund is 9-12 months of take home pay

An adequate emergency fund is usually 3-6 months of living expenses

Which of the following types of interest expense is not deductible?

Automobile loan interest

Which of the following statements is NOT true? - The steps of the financial planning process can provide an approach to career planning. - Career choices require periodic evaluation of trade-offs related to various factors. - The average person changes jobs seven times in a lifetime. - Career choice decisions do not have risks and opportunity costs.

Career choice decisions do not have risks and opportunity costs.

The two documents considered to be part of personal financial statements include the personal balance sheet and which of the following?

Cash flow statement

After considering the alternative courses of action to reach financial goals, one of the possible courses of action is to ______.

Continue the same course of action

Purchase receipts, insurance policies, tax forms, and which of the following are the basis of financial recordkeeping?

Credit card statements

When planning your financial goals, what role does the economy play?

Daily economic transactions facilitate financial planning activities, which affect personal finance decisions.

Which of the following is the first step in the financial planning process?

Determine your current financial situation.

According to AICPA Insights, which of the following is a common mistake related to implementing a financial plan?

Emotional decision making

Which of the following is not a deductible tax? State and local income taxes Real estate taxes on your house Personal property taxes Excise tax

Excise tax

Choosing to save a larger amount each month is an example of which possible course of action that is a part of step three in the financial planning process?

Expanding the current situation

True or False: Personal balance sheet and the cash flow statement come from financial institutions, businesses, or the government.

False

True or false: Managing risk is not a financial planning activity.

False

True or false: A tax deduction reduces tax liability directly, dollar for dollar.

False Reason: A tax deduction reduces taxes indirectly by the amount of the tax rate. On the other hand, a tax credit would result in a direct dollar-for-dollar reduction.

True or false: Income includes only those earnings that you are actively involved in earning, such as salaries and income from managing a business.

False Reason: Income includes not only earned income but also investment and passive income--both of which do not involve activities that you are engaged in.

The _____ _____ System is the central bank of the United States and has significant economic responsibility.

Federal Reserve

Cash ____ is the actual inflow and outflow of cash during a given time period.

Flow

Which one of the following is an example of a variable expense?

Groceries

As "Tax Freedom Day" came in mid-April, it means that the portion of the year people work to pay their taxes is represented by January 1 to:

Mid-April

Which of the following taxes are deductible for the person/family paying them? Inheritance taxes Real estate property taxes State income taxes Estate taxes

Real estate property taxes State income taxes

The due date for the third installment for estimated tax is in which month?

September

When discussing personal financial growth, what is an important aspect?

Setting goals

Which of the following are categories of taxes? Taxes on loans Taxes on earnings Taxes on property Taxes on wealth Taxes on wealth Taxes on purchases Taxes on life insurance proceeds

Taxes on earnings Taxes on property Taxes on wealth Taxes on purchases

Which of the following are categories of taxes? Taxes on purchases Taxes on earnings Taxes on loans Taxes on property Taxes on wealth Taxes on life insurance proceeds

Taxes on purchases Taxes on earnings Taxes on property Taxes on wealth Reason: (Borrowings are not taxed. / Life insurance proceeds are not taxed.)

Money management involves financial activities necessary to manage current personal economic resources, while working for the achievement of long-term financial security.

True

Which of the following statements are true about a balance sheet that you are reviewing on 1/15/2021 that shows an "as of" date of 12/31/2020 and assets of $600,000 and liabilities of $425,000? - The net worth is $175,000 as of 12/31/2020. - The assets as of 1/15/2021 have a market value of $600,000. - The liabilities, which don't change much, are $425,000 as of 12/31/2020 and 1/15/2021. - The net worth is $175,000 as of 1/15/2021.

The net worth is $175,000 as of 12/31/2020.

True or false: Income tax is calculated on adjusted gross income less deductions and exemptions.

True Reason: Deductions, and exemptions, are subtracted from your AGI to derive taxable income upon which income taxes are calculated.

American consumers spend dollars on goods and services. The goods and services are manufactured or offered by American companies and companies from other countries. This is an example of:

a global economy and foreign competition.

If you file Form 4868 to obtain an automatic extension on filing your forms, you must pay your estimated taxes owed or face ________________________.

a penalty for being just one day late Reason: If you file Form 4868 to obtain an automatic extension on filing your forms, you must pay your estimated taxes owed or face a penalty for being just one day late.

The main purpose of the Federal Reserve is to ______.

act as the central bank and maintain an adequate money supply

Understanding how the ages of dependents will affect your savings goal is a part of step four in the financial planning process, which involves evaluating your ______.

alternatives

You can file Form 4868 to obtain a(n) ______ six-month extension on filing an income tax return by filing the proper forms with the IRS before the April 15 filing deadline.

automatic

The steps in the financial planning process can guide your ______ planning.

career

The measure of the average change in the prices urban consumers pay for a fixed "basket" of goods and services is called the:

consumer price index

A formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is called a(n) ______ ______.

financial plan

When consumer saving and investing increase, interest rates tend to:

decrease

Reviewing and revising your plan is the ______ step in the financial planning process.

final

According to the text, you should do a complete review of your finances at least:

once a year

Another name used for discounting is:

present value computations.

The major categories of taxes are taxes on ______, property, wealth, and earnings.

purchases

Long-term financial security starts with a regular ______ plan for emergencies and unexpected bills.

savings

Developing your financial goals is the ______ step in the financial planning process.

second

Identifying alternative courses of action is the ______ step in the financial planning process.

third

The rule of thumb when saving for an emergency fund is to set aside:

three to six months of living expenses