Personal Finance Ch 2

Which fo the following would increase the interest rate for a loan?

poor credit rating

the consumer price index measures

the average change in prices of a fixed basket of goods and services of urban consumers.

Inflation is a rise in the general level of prices and it reduces the buying power of the dollar

true

an opportunity cost is what a person gives up when a choice is made

true

Which of the following is an example of financial opportunity cost?

Foregoing wages to attend school

Financial plans are only created by financial planners

false

financial activities for a young, single person will probably be the same as those for an older couple with no dependent children at home

false

retirement planning includes thinking about your housing situation, recreational activities, and possible volunteer or part-time work.

true

To develop financial goals, one should _________________

Identify specific, realistic goals that are measurable along with a time frame and an action plan

Robert Brown is interested in attending a concert next weekend. Unfortunately, he is scheduled to work. If he finds a substitute for his shift se he can attend the concert, what kind of cost is he incurring?

Personal opportunity cost relating to time

Many Americans have money problems because of _________________

Poor planning and weak money management habits

Changes in personal, social, and economic factors may require you to _____________________

Review and revise your financial plan more frequently

Which of the following goals would be the easiest to implement and measure?

Save $100 a month to create $2,4000 emergency fund in 2 years

Personal opportunity costs refer to resources, such as time, health, energy, that are given up when a choice is made.

True

Opportunity cost refers to __________________

What you give by making a choice

Who is less likely to be harmed by inflation?

borrowers

The first step of the financial planning process is to _______________

determine your current financial situation

a formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities is a(n) ________________

financial plan

the rising or falling of prices that causes changes in buying power is referred to as _______________

inflation

The Rule of 72 is __________________

used to estimate how fast prices will double using a given annual inflation rate