Fin lit Unit 1 (True/False)
A certificate of deposit is usually considered to be very liquid. True or False?
FALSE
A financial is another name for a budget. True or False?
FALSE
A general sales tax is also referred to as an excise tax. True or False?
FALSE
A personal balance sheet reports your income and expenses. True or False?
FALSE
A regular savings account usually offers a higher rate of return to savers than other savings plans. True or False?
FALSE
Definite financial obligations are referred to as variable expenses. True or False?
FALSE
Developing and using a budget is part of the "obtaining" component of financial planning. True or False?
FALSE
Developing financial goals is the first step in the financial planning process. True or False?
FALSE
Economics is the study of using money to achieve financial goals. True or False?
FALSE
Financial planning has specific techniques that will be effective for every individual and household. True or False?
FALSE
Financial records that are referred to on a regular basis should be kept in a safe-deposit box. True or False?
FALSE
For many years, the United States has ranked highest among industrial nations in savings rate. True or False?
FALSE
Furniture, jewelry, and an automobile are examples of liquid assets. True or False?
FALSE
Gross Domestic Product (GDP) measures the total value of goods and services produced within a country's borders, excluding items produced within foreign resources. True or False?
FALSE
Higher inflation usually results in lower interest rates. True or False?
FALSE
If expenses for a month are greater than income, an increase in net worth will result. True or False?
FALSE
In order to calculate savings ratio, the amount saved each month is divided by net income. True or False?
FALSE
Increased demand for a product or service will result in lower prices for this item. True or False?
FALSE
Interest on savings is calculated by multiplying the money amount times the opportunity cost times the annual interest rate. True or False?
FALSE
Lenders benefit more than borrowers in times of high inflation. True or False?
FALSE
Money management activities refer to long-term investment decisions. True or False?
FALSE
Money received in the form of dividends or interest is commonly called "earned income". True or False?
FALSE
Most decisions have only a few alternatives from which to choose. True or False?
FALSE
Opportunity costs are only associated with money management decisions involving long-term financial security. True or False?
FALSE
Planning to buy a house is an example of an intangible goal. True or False?
FALSE
Present value is also referred to as compounding. True or False?
FALSE
Risks associated with most financial decisions are fairly easy to measure. True or False?
FALSE
Tax avoidance refers to illegal actions to reduce one's taxes. True or False?
FALSE
Taxes are only considered as financial planning activities in April. True or False?
FALSE
The more frequent the compounding, the less a person will earn on a savings account. True or False?
FALSE
The principal purpose of uses is to control economic conditions. True or False?
FALSE
When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance. True or False!
FALSE
A "free" checking account with a minimum balance of $500 has an opportunity cost of lost interest. True or False?
TRUE
A budget is a specific plan of how a person or family will spend their money. True or False?
TRUE
A decrease in the demand of a product or service may result in a decrease in wages for people producing that item. True or False?
TRUE
A drawback of Flexible Spending Accounts (FSA) is that any account funds must be used to pay for expenses incurred before year's end or the money is lost. True or False?
TRUE
A person's filing status is affected by marital status and dependents. True or False?
TRUE
A person's net worth is the difference between the value of the items owned and the amounts owed to others. True or False?
TRUE
A personal cash flow statement can serve as the basis for the budgets categories used by an individual or family. True or False?
TRUE
A personal cash flow statement presents income and outflows of cash for a given time period, such as a month. True or False?
TRUE
A restrictive endorsement will usually include the words "for deposit only.". True or False?
TRUE
A state may impose a personal property tax. True or False?
TRUE
A tax credit is an amount subtracted directly from the amount of taxes owed. True or False?
TRUE
A tax on the value of automobiles, boats, or furniture is referred to as a personal property tax. True or False?
TRUE
All in one accounts may be used by financial institutions to simplify the maze of financial services and to attract customers. True or False?
TRUE
An asset management account combines several financial services for a single fee. True or False?
TRUE
An estate tax is imposed on the value of an individual's property at the time of his or her death. True or False?
TRUE
An exclusion is earnings not included in taxable income. True or False?
TRUE
An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return. True or False?
TRUE
Analyzing your current financial position is a part of the first step of the financial planning process. True or False?
TRUE
Capital gains refers to profits from the sale of investments. True or False?
TRUE
Credit unions frequently offer lower loan rates than other financial institutions. True or False?
TRUE
Demand deposits are another term for checking accounts. True or False?
TRUE
Discretionary income is money left over after paying for housing, food, and other necessities. True or False?
TRUE
Exemptions are deductions for yourself, your spouse, and qualified dependents that you can deduct from adjusted gross income. True or False?
TRUE
Higher returns on savings will usually result in less liquidity. True or False?
TRUE
Inflation reduces the buying power of money. True or False?
TRUE
Insolvency is a result of having more liabilities than assets. True or False?
TRUE
Opportunity costs refer to time, money, and other resources that are given up when a decision is made. True or False?
TRUE
Opportunity costs refer to what a person gives up when a decision is made. True or False?
TRUE
Real-estate property taxes are a major source of revenue for local governments. True or False?
TRUE
Savings and loan associations offer mortgages. True or False?
TRUE
Take-home pay is a person's earnings after deductions for taxes and other items. True or False?
TRUE
Tax evasion is the use of illegal actions to reduce one's taxes. True or False?
TRUE
The money market fund offered by investment companies is a relatively liquid financial service. True or False?
TRUE
The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions. True or False?
TRUE
Trade balance is defined as the difference between a country's exports and its imports. True or False?
TRUE
Using a "debt" card is basically the same as writing a check. True or False?
TRUE
When one money management decision is made, an alternative must be given up. True or False?
TRUE
