Question 1

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Typically,your salary will be [higher | lower] if you live in a large metropolitan area rather than a small town or rural area.

Accepted Answer

Salaries in large metropolitan areas tend to be higher due to the higher cost of living and higher demand for skilled workers in those areas.

Question 2

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The two principal constraints which government places upon us are regulations and [tariffs | taxes].

Accepted Answer

The statement is referring to the constraints that the government imposes on individuals. Regulations are one type of constraint, and taxes are the other. Tariffs are not a typical constraint imposed on individuals by the government, but rather on businesses engaged in international trade. Therefore, the correct choice is option B, for the second item, taxes.

Question 3

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[Tax | Liability and insurance] planning is introduced early in the life cycle.

Accepted Answer

The statement is referring to planning that is introduced early in the life cycle, which typically includes planning for liability and insurance. While tax planning may also be introduced early on, the specific reference to liability and insurance suggests that B is the more appropriate choice.

Question 4

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-[GDP | CPI] is the total of all goods and services produced by workers located within the country.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 5

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-For most people,employee benefits are of [little | major] importance.

Accepted Answer

"Major" is the correct choice as it indicates that employee benefits are seen as significant or important to most people. "Little" would indicate the opposite meaning. Option C is not correct as one of the choices is correct.

Question 6

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Most people graduate from college with [no | some] debts.

Accepted Answer

Most people graduate from college with some debts due to student loans and other educational expenses.

Question 7

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-As the rate of inflation increases,the purchasing power of your dollars will [increase | decrease].

Accepted Answer

As inflation increases, the value of money decreases, so the purchasing power of your dollars will decrease.

Question 8

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The Federal Reserve's actions after the financial crisis of 2008 and 2009 resulted in [reduced interest rate | higher interest rates].

Accepted Answer

The Federal Reserve's actions after the financial crisis of 2008 and 2009 resulted in reduced interest rates, as the Fed lowered the federal funds rate and engaged in quantitative easing to stimulate lending and boost economic growth.

Question 9

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The primary determinant of your standard of living is your [wealth | propensity to consume].

Accepted Answer

Wealth is the most important factor in determining one's standard of living, as it provides the resources necessary to purchase goods and services that contribute to a good quality of life. Propensity to consume may also have an impact, but only insofar as it relates to one's ability to save and accumulate wealth for future consumption.

Question 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The average income of household heads increase until age [55 | 65] then income starts decreasing.

Accepted Answer

The average income of household heads typically increases until around age 55, after which it often starts to decrease due to retirement or reduced work hours.

Question 11

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Two key indicators of economic activity in the U.S.are production levels and [employment levels | cost of living].

Accepted Answer

Production levels and employment levels are two common indicators of economic activity in the U.S. The cost of living is also an economic indicator, but it is not as directly tied to economic activity as production and employment levels.

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A stronger economy leads to [higher employment | lower employment].

Accepted Answer

A stronger economy leads to higher employment because when businesses are thriving, they are more likely to hire new employees and expand existing staff. Additionally, when consumers have more disposable income, they are more likely to spend money which creates a greater demand for goods and services, leading to more job opportunities.

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your level of formal education is a [controllable | non controllable] factor that has a considerable effect on your income.

Accepted Answer

A person's level of formal education is something that can be controlled through their own choices, such as deciding to pursue further education or obtain additional certifications or degrees. Therefore, "controllable" is the correct choice.

Question 14

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-During the expansion phase of the business cycle,the unemployment rate will [increase | decrease].

Accepted Answer

During the expansion phase of the business cycle, the economy is growing and businesses are hiring more workers to keep up with the demand for goods and services. As a result, the unemployment rate usually decreases during this phase.

Question 15

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-Your [level of education | age] will usually have no effect on your earning capacity.

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 16

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-After reaching adulthood,your financial goals will [stabilize | continue to change].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The Consumer Price Index is a measure of [unemployment | inflation].

Accepted Answer

The Consumer Price Index (CPI) is a measure of inflation, specifically it measures the average change in prices of goods and services over time. It does not measure unemployment.

Question 18

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-A decrease in the gross domestic product would indicate that our economy is [growing | stagnating].

Accepted Answer

A decrease in the gross domestic product (GDP) would indicate that our economy is stagnating or contracting, not growing. GDP is a measure of the total value of goods and services produced by a country in a certain time period, and a decrease in this value means that the economy is not producing as much as it used to, which can lead to unemployment and other negative outcomes.

Question 19

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-The government employs monetary and fiscal policy to help foster a [fast growing economy | no growth economy].

Accepted Answer

The answer of INSTRUCTIONS: Choose the word or phrase in...

Question 20

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select
-For most people,debts [increase constantly | increase and then decrease] during their lifetimes.

Accepted Answer

While it is possible for debts to constantly increase, it is more common for them to increase during certain periods (such as obtaining a mortgage or paying for college) and then decrease over time as those loans are paid off. Therefore, the phrase "increase and then decrease" is the more accurate choice.

Quiz 1: Understanding the Financial Planning Process

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Typically,your salary will be [higher | lower] if you live in a large metropolitan area rather than a small town or rural area.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The two principal constraints which government places upon us are regulations and [tariffs | taxes].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[Tax | Liability and insurance] planning is introduced early in the life cycle.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -[GDP | CPI] is the total of all goods and services produced by workers located within the country.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -For most people,employee benefits are of [little | major] importance.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Most people graduate from college with [no | some] debts.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -As the rate of inflation increases,the purchasing power of your dollars will [increase | decrease].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The Federal Reserve's actions after the financial crisis of 2008 and 2009 resulted in [reduced interest rate | higher interest rates].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The primary determinant of your standard of living is your [wealth | propensity to consume].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The average income of household heads increase until age [55 | 65] then income starts decreasing.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Two key indicators of economic activity in the U.S.are production levels and [employment levels | cost of living].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A stronger economy leads to [higher employment | lower employment].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your level of formal education is a [controllable | non controllable] factor that has a considerable effect on your income.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -During the expansion phase of the business cycle,the unemployment rate will [increase | decrease].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -Your [level of education | age] will usually have no effect on your earning capacity.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -After reaching adulthood,your financial goals will [stabilize | continue to change].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The Consumer Price Index is a measure of [unemployment | inflation].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -A decrease in the gross domestic product would indicate that our economy is [growing | stagnating].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -The government employs monetary and fiscal policy to help foster a [fast growing economy | no growth economy].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select -For most people,debts [increase constantly | increase and then decrease] during their lifetimes.