Personal Finance Ch 2
Which fo the following would increase the interest rate for a loan?
poor credit rating
the consumer price index measures
the average change in prices of a fixed basket of goods and services of urban consumers.
Inflation is a rise in the general level of prices and it reduces the buying power of the dollar
true
an opportunity cost is what a person gives up when a choice is made
true
Which of the following is an example of financial opportunity cost?
Foregoing wages to attend school
Financial plans are only created by financial planners
false
financial activities for a young, single person will probably be the same as those for an older couple with no dependent children at home
false
retirement planning includes thinking about your housing situation, recreational activities, and possible volunteer or part-time work.
true
To develop financial goals, one should _________________
Identify specific, realistic goals that are measurable along with a time frame and an action plan
Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift se he can attend the concert, what kind of cost is he incurring?
Personal opportunity cost relating to time
Many Americans have money problems because of _________________
Poor planning and weak money management habits
Changes in personal, social, and economic factors may require you to _____________________
Review and revise your financial plan more frequently
Which of the following goals would be the easiest to implement and measure?
Save $100 a month to create $2,4000 emergency fund in 2 years
Personal opportunity costs refer to resources, such as time, health, energy, that are given up when a choice is made.
True
Opportunity cost refers to __________________
What you give by making a choice
Who is less likely to be harmed by inflation?
borrowers
The first step of the financial planning process is to _______________
determine your current financial situation
a formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n) ________________
financial plan
the rising or falling of prices that causes changes in buying power is referred to as _______________
inflation
The Rule of 72 is __________________
used to estimate how fast prices will double using a given annual inflation rate