Personal Finance

Which of the following is not a reason credit is marked heavily to consumers in the United States?

The use of credit is not socially accepted in the United States.

Learning the language of money is not that important because you will be able to depend on financial planners to manage your money.

False

Most Americans avoid the use of credit when it comes to buying big-ticket items like a car or furniture for their home.

False

Most Americans today are wealthy and will have financial security when they retire.

False

A period of temporary economic decline during which trade and industrial activity are reduced; generally identified by a fall in a gross domestic product

recession

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

False

Expensive houses and new cars are a true indication of wealth.

False

The credit system today is structured to accommodate a state of uncertain employment and income instability, utilizing high interest rates and fees to turn huge profits.

True

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

True

Whent it comes to managing money, success is about __% knowledge and __% behavior.

20, 80

Key components of financial planning include all of the following except:

Allow your financial planner to make all of your major money decisions.

Why was the use of credit uncommon prior to 1917?

Laws prevented lenders from charging high interest rates, borrowing money was generally not socially acceptable, lending money to others was not profitable, ALL OF THE ABOVE

Which of the following is not a factor in becoming money smart?

Learn how to read your credit card statements.

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

Learning to manage money at this stage can eliminate financial mistakes and promote huge financial benefits for the future.

Explain why understanding your money personality is important when it comes to developing a money plan that's right for you.

Understanding your personal strengths and weaknesses when it comes to money will help you manage your spending and saving behavior.

All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc.

personal finance

During the Great Depression, New Deal policymakers came up with mortgage (home loans) and consumer lending policies that convinced commercial banks that:

Consumer credit could be profitable

Which of the following statements best describe how Americans are being outsmarted by banks and other lenders?

Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and fees continue to destroy our financial well-being.

Since you are a teenager, what you do now with money will have little effect on your financial future.

False

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

How much money a person makes does not dictate his or her spending and saving behavior.

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

Knowing your money personality allows you to excuse excessive spending because it is simply part of your nature.

Describe some of the mistakes Americans often make when it comes to money.

Lack of budgeting, overspending, relying on credit.

Personal financial success is primarily the result of:

Managing your money behavior.

Explain how marketing can affect your decision when it comes to spending money.

Marketing affects where and how we spend our money through advertisements; it can encourage us to buy now and pay later.

Which of the following is a consequence of spending more than you make?

Missed opportunity to save and invest, stress, a cycle of debt, ALL OF THE ABOVE

Does managing your money well mean that you can't have fun with your money?

No; you can always budget some money for fun activities.

Which of the following is not a true statement?

The credit industry in America has not changed much since 1917.

The widespread financial insecurity of Americans is probably because

The savings rate of Americans is low and many borrow in order to spend more than they earn.

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

loan

Having debt keeps you from building wealth.

True

When developing a personal financial plan, one of the first things you should do is assess your current financial situation. This includes your income, assets, and liabilities.

True

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

loan shark

When it comes to personal finance, the math is easy. What's challenging is managing your

behavior

A person or organization that uses a product or service

consumer

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

credit

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

debt

A system by which goods and services are produced and distributed

economy

The knowledge and skill set necessary to be an informed consumer and manage finances effectively

financial literacy

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

interest