Chapter 8 review

Generally speaking, it is wiser to buy a home than to rent, because each mortgage payment gradually increases one's _____ in the home. a. emotional investment b. tax liability c. personal debt d. equity

equity

Cohabiting couples tend to favor pooling more than married couples.

false

Money problems are seldom related to an inability to develop an open and well-organized family system.

false

Salary differences between U.S. female and male workers decrease as the level of education increases.

false

There is a weak relationship between marital happiness and money.

false

Generally, it is found that rich people are ______ than poor people.

happier

The aim of financial resources management is to achieve economic goals and _____ in intimate relationships.

harmony

In a study of 1,000 newlywed couples married 3 to 9 months, couples were asked to indicate their level of debt in all areas EXCEPT a. school loans. b. credit cards. c. home mortgage. d. auto loans.

home mortgage

Which of the following is very unlikely during times of dramatic economic decline? a. infanticide b. domestic violence c. alcohol and other drug abuse d. increased marital tensions

infanticide

One way to get yourself out of the credit trap is to negotiate lower interest rates with your credit card company.

true

Which of the following statements is NOT correct about the strengths of happy couples, compared to unhappy couples, regarding finances? a. "We agree on how to spend money." b. "I am satisfied with our decision to save." c. "We used credit cards to cover most of our expenses." d. "Major debts are not a problem for us."

"we used credit cards to cover most of our expenses."

Which of the following statements about U.S. families and credit cards is false? a. About two-thirds of families carry a monthly balance on their credit cards. b. Having a savings account is rare compared to having a credit card debt. c. The average credit card balance for the typical American household is $6,885. d. None of these answers is correct.

None of these answers is correct.

Which of the following statements is true of a good budget? a. It builds in personal control for the head of the family. b. It treats credit as income, not debt. c. It gives equal priority to both wants and needs. d. It is simple, realistic, and clear.

it is simple, realistic, and clear

Check my workCheck My Work button is now disabled Item 24 Item 24 10 points Assume you have a credit card with the balance of $1,000 and an interest rate of 17% (a common interest rate on credit cards). Assuming you make no new purchases, but you pay the minimum payment, it would cost you $2,590 and it would take you _____ to pay off the the debt. a. 7 months b. 17 months c. 7 years d. 17 years

17 years

The average housing cost for a divorcing family is: a. $12,000. b. $15,500. c, $20,000. d. None of these answers is correct.

20,000

According to the national study of 64 couples by Skogrand, Johnson, Horrocks, and DeFrain (2011), which of the following is true of the themes regarding marriage and money? a. For most couples, there was a trend toward having either joint or separate accounts. b. Most of the couples with great marriages had a huge debt crisis and could not allocate resources to pay off their debts. c. Couples lived within their means, and many considered themselves frugal. d. For most couples, both the partners handled the day-to-day finances.

Couples lived within their means, and many considered themselves frugal

Which of the following statements is true of pooling money by married couples? a. Those who remarry after divorce are more likely to maintain separate funds. b. Pooling is difficult because there are a lot of accounts to balance. c. Cohabiting couples tend to favor pooling more than married couples. d. Pooling some of the money from joint accounts to cover individual credit card bills is advisable.

Those who remarry after divorce are more likely to maintain separate funds

Which of the following is an advantage of buying a home? a. A monthly payment that remains constant for many years is desirable. b. A lifestyle that involves fewer responsibilities is appealing. c. No large down payment is needed. d. The relatively fixed housing expenditure makes budgeting easier.

a monthly payment that remains constant for many years is desirable

.If a family is budgeting their income effectively, they should spend no more than one week's take-home pay on: a. food, including meals out. b. entertainment. c. all of their housing expenses, including insurance and taxes. d. car payments, taxes, and insurance.

all of their housing expenses, including insurance and taxes

In addition to racial and ethnic prejudice, which of the following reasons accounts for Whites (as a group) earning more than African Americans or Hispanics (as groups)? a. type of employment b. urban or suburban place of residence c. length of time in the job market d. All of these answers are correct.

all of these answers are correct

Sometimes for a family to stay in the relationship instead of divorcing, there are other costs besides financial, such as: a. physical well-being. b. emotional well-being. c. mental well-being. d. all of these answers are correct.

all of these answers are correct

When comparing credit cards, what should one look at? a. annual fees b. late fees c. charges for cash advances d. All of these answers are correct.

all of these answers are correct

When it comes to stepfamilies, finances may need to accommodate: a. children who are "yours, mine, and ours." b. previous financial commitments, including child support. c. possible inheritances. d. all of these answers are correct.

all of these answers are correct

Why do financial problems start for some families? a. Money is a taboo topic. b. Many couples do not create and stick to a budget. c. Some families overspend and rely too heavily on credit. d. All of these answers are correct.

all of these answers are correct

When you see helping your friends and family as more important that helping yourself, you are demonstrating a(n) _____ worldview.

collective

For many Latino families, family is the highest priority and the primary source of financial support. In the context of diversity and financial style, they are likely to adopt a(n): a. collective perspective. b. individualistic perspective. c. egalitarian perspective. d. socialistic perspective.

collective perspective

In the context of diversity and financial style, there are many differences between income level, ethnicity, and worldview. Specifically, low-income families tend to view things from a(n): a. collective worldview. b. individualistic worldview. c. egalitarian perspective. d. socialistic perspective.

collective worldview

Which of the following is seldom a cause for personal debt? a. credit spending b. crisis spending c. compulsive spending d. comparative spending

comparative spending

Check my workCheck My Work button is now disabled Item 33 Item 33 10 points Frederick likes to go out to eat with his friends during the week even when he does not have the money for it. He often uses his credit cards to pay for lunches even though he really cannot afford it. He also opens new cards to transfer balances. This will lead to excessive debt due to: a. credit spending. b. crisis spending. c. compulsive spending. d. comparative spending.

credit spending

Sophia and Marcel just found out that they immediately need a new roof for their house because the existing one is leaking. It will cost them another $20,000. This will lead to excessive debt due to: a. credit spending. b. crisis spending. c. compulsive spending. d. comparative spending.

crisis spending

Which of the following is NOT a reason given by economists and other social observers for income differences between women and men in the United States? a. Men gain seniority in the labor force, while women often drop out of the labor force to have children. b. Fields dominated by women tend to have lower salaries than those dominated by men. c. Discrimination and sexism do not exist in the U.S. workplace today. d. Once a woman has formally accepted a job at a particular pay rate, she has little legal recourse for the lower wages.

discrimination and sexism do not exist in the US workplace today

Which of the following is an advantage of renting a house? Multiple Choice a. a monthly payment that remains constant for many years b. mobility, perhaps some amenities like pool, tennis courts, etc. c. a better credit rating d. the federal income tax deductions for mortgage interest

mobility, perhaps some amenities like pool, tennis courts, etc.

What does living in poverty mean? a. living from paycheck to paycheck b. not having adequate food or a decent place to sleep c. having enough money to pay for medicine, food, and shelter, but nothing else d. making just the minimum payment on credit cards

not having adequate food or a decent place to sleep

Bankruptcy: a. is a good solution for financial problems. b. makes financial concerns much easier to handle. c. offers some protection from creditors. d. has very few social implications.

offers some protection from creditors

Which of the following is NOT a time-tested strategy for someone who has become fiscally overextended? a. Develop and stick to a balanced budget. b. Work to reduce the total number of debts. c. Pay off debts with low interest rates first. d. Avoid debt consolidation loans.

pay off debts with low interest rates first

Research indicates that there is a(n) _____ relationship between money and marital happiness.

strong

Which of the following is NOT a part of the overall definition of budgeting? a. the regular, systematic balancing of income and expenses b. a personal system for making sure there is enough money to cover the essentials c. the regular, systematic commitment of having enough money to pay the minimum payment on credit cards each month d. a personal system that, hopefully, will pay for a few extras in addition to essential expenses

the regular, systematic commitment of having enough money to pay the minimum payment on credit cards each month

Research shows that generally after the household income reaches about $50,000: a. happiness continues to increase along with money earned. b. happiness starts to decrease along with money earned. c. the relationship between money and happiness is no longer strong. d. money and happiness are not necessarily related.

the relationship between money and happiness is no longer strong

What is the relationship between gender and income differences? a. There is a large difference in the average income of females and males at all educational levels. b. Because of Affirmative Action initiatives in recent years, women as a group now earn slightly more than men as a group. c. Salary differences between men and women remain the same across educational levels. d. Earning a college degree decreases differences in income level between men and women.

there is a large difference in the average income of females and males at all educational levels

In many cases, owning a home forces people to save money.

true

One of the major differences between unhappily married and happily married couples is that happily married couples are much more likely to agree on how to spend money.

true

One study found that debt caused the most problems in newlywed marriages, rather than finances in general.

true