PFP CHP1

Specific advantages of personal financial planning include:

1. Increased effectiveness with resources 2. Increased control with financial affairs 3. Improved personal relationships

When there is a decreased money supply, what typically tends to decline?

1. Interest rates 2. Job opportunities

Select the four possible alternative courses of action when making decisions.

1. Take new course of action 2. Continue the same action 3. Change the current situation 4. Expand the current situation

What is the definition of economics as described in this text under economic factors?

The study of how wealth is created and distributed

How is the money supply maintained by the Federal Reserve?

Through economic growth, expanding GDP, influencing interest rates, and time value of money

Opportunity costs when not measured in dollars are sometimes called the:

Trade-off

The Fed influences the money supply by:

1. Controlling interest rates 2. Buying and selling government securities

What are examples of well-written financial goals? (Select all that apply.)

1. Developing a savings plan of $100 per week to make a down payment on a car in a year 2. Investing $250 per month for retirement in 40 years

American consumers spend dollars on goods and services. The goods and services are manufactured or offered by American companies and companies from other countries. This is an example of:

A global economy and foreign competition

The purpose of the Federal Reserve System is to:

Act as the central bank and maintain an adequate money supply.

What are the common courses of action when making decisions?

Change the current situation, revise financial goals, or implement a new course of action.

What is the next step of the financial planning process after reviewing and revising your financial plan? Look at the exhibit on the financial planning process in the text.

Determine current financial situation - Also the first step

Everyone has the same personal financial goals T/F

False

Decreased money supply will generally cause ____ interest rates.

Higher

One advantage of personal financial planning is:

Increased control of financial affairs

What are the consequences of "No Action" as an alternative?

Not taking action when a decision is needed usually is a bad alternative decision and is rarely the correct decision.

If you spent considerable time shopping around to compare brands for a major purchase, this time would be considered:

Opportunity Cost

Personal financial planning is the process of managing your money to achieve:

Personal financial goals

The definition of personal financial planning is:

The process of managing your money to achieve personal economic satisfaction.

The _______ environment includes various institutions, including businesses, labor, and government, that work together to satisfy needs and wants. (Enter one word per blank.)

economic

What is the definition of the adult life cycle?

The stages in the family and financial needs of an adult