Personal Finance Chapter 1
A career plan should take into account your:
Abilities, skills, lifestyle & work style
Inflation in personal finance is:
An increase in a general level in prices
Real GDP is decreasing during
Contraction
Which of the following would not be considered an asset?
Credit card balance
contraction
Expansion
What are the upsides and downsides of the business cycle called?
Expansion and Contraction
A person with a master's degree will likely earn more income than a person with a professional degree.
False
Businesses ultimately determine the kinds of goods and services to provide to consumers.
False
Career planning and personal financial planning are distinct, unrelated activities.
False
Economic growth in America is measured by changes in the consumer price index (CPI).
False
Financial plans are not influenced by the economic environment.
False
In financial planning, adequate insurance coverage is essential only after you have attained sizeable wealth.
False
Personal financial planning will not help you if your income seems to be inadequate to meet your most basic needs.
False
Retirement planning optimally begins when people are in their 40s or 50s.
False
The first step in the financial planning process is to develop financial plans and strategies
False
Typically, people with low incomes fall into the middle age and older age groups, with the lowest earnings generally occurring between the ages of 55 and 64.
False
You are more likely to attain your financial goals if you set them higher than you are currently able to achieve.
False
The first step in career planning is to set long- and short-term career goals.
False This is the second step; the first step is to identify your interests, skills, needs, and values.
A career plan is NOT:
Finding a job right now
Who should you include in your financial goals?
Friends, family and significant others
How long does a business cycle last?
It can vary - 4 to 5 years for expansion and 6 months to a year for contraction
Career networking is:
Making use of contacts to exchange career information and opportunities
Inflation relates to:
Prices
Financial goals should be:
Specific, realistic and attainable
Career networking is NOT:
The way of the past - only old people use networking to find jobs
In financial planning, it is important to consider the tax implications of various investments.
True
Learning to communicate with your partner about money is a critical step in developing effective financial plans.
True
Unless you attain your short-term goals, you probably will not be able to achieve your intermediate- or long-term goals.
True
"Financial shocks" that can drastically change one's financial circumstances include
a. divorce. b. death of a spouse. c. supporting elderly parents while paying for your children's college educations
The average American starting a career today can expect to have
at least ten jobs with five or more employers.
When applying for a job within a large nationwide company, you notice that salaries for the same position differ based on geographic region. In which of the following regions would you most likely receive the highest salary?
c. Metropolitan area in the Northeast
The federal government's monetary policy
controls the amount of money in circulation.
Higher rates of inflation usually cause
higher interest rates
The federal government
plays a major role in regulating the level of economic activity. is both a customer of businesses and an employer of consumers.
If your salary increased 4% last year and inflation averaged 4%, your purchasing power would
stayed the same
