BUSI 1307. CHAPTER 1-3 QUIZ. T/F
False
A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.
True
A person who has $2,000 monthly income and spends $1,800 monthly has an average propensity to consume of 90%.
True
A special tax provision reduced the social security portion for the individual taxpayer by 2% in 2011 and 2012.
True
An investment must be owned over one year in order to qualify for long-term capital gains treatment.
False
An investment must be owned over two years in order to qualify for long-term capital gains treatment.
True
Assets purchased on credit should be included on the asset side of the balance sheet.
True
Consumer choices ultimately determine the kinds of goods and services businesses will provide.
True
Current consumption is inversely related to saving for the future.
True
Financial assets are intangible assets acquired to achieve long-term personal financial goals.
False
Financial planning is necessary only if you earn a lot of money.
True
For most people working in large firms, employee benefits are an important part of their financial planning.
False
How long you invest is not nearly as important as the rate of interest you can earn on your investments.
True
If you earn less than $15,000, you probably pay more in social security taxes than in federal income taxes.
False
If you have any earned income, you are required to file a tax return.
True
If you listed your gross salary in the income portion of the budget, the expenditures section must include income taxes and social security.
True
Inability to reach short-term goals will significantly affect your ability to reach long-term goals.
False
Income shifting refers to the process of transferring income from the taxpayer to the IRS.
False
Inflation means price levels have declined.
True
Most families find it difficult to discuss money matters.
True
Personal financial software is widely available, much of which is free.
False
Portfolio-related expenses can be written off against passive income
True
Tax avoidance is legal, tax evasion is illegal.
True
The amount of one personal exemption in 2008 was $3,500
False
The best way to balance your budget is to increase borrowing.
True
The sale of your home will rarely result in a taxable capital gain
True
Two persons with equal average propensities to consume will not necessarily have equal standards of living because of differences in income.
True
Using the future value calculations to estimate the funds needed to meet a goal takes compounding into account.
False
Using time value of money is most important when planning for short-term goals.
True
Utility refers to the amount of satisfaction a person gets from buying certain items.
True
You have a balanced budget when total income for the year equals or exceeds total expenditures for the year.