TEST BANK FOR k 8 k 8
Introductionto PersonalFinanceBeginning Your FinancialJourney,2ndEdition John k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
E. Grable, Lance Palmer
k8 k8 k8 k8
Chapter 1-10 k8
Chapter 1 k8 Beginning Your Financial Journey: The Interior Finance Point of View k8 k8 k8 k8 k8 k8 k8 k8 k8
1) Which of the followingrefers to one's abilityto understand and use personal finance
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
information?
k8
A) Financial risk tolerance. k8 k8
B) Financial well-being. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: C
k8 k 8
Explanation: Financial knowledge is the ability to understand personal finance information. Knowing k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
who you are, where you want to go, and what skills you currentlypossess are essential factors shaping your
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial journey.
k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
2) Peoplewhobelievethatwhathappenstothemisbasedonfateorluckmightviewtheirfinancial journey
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
as being uncertain. This is an example of
k8 k8 k8 k8 k8 k8 k8 k8
A) financial risk tolerance. k8 k8
B) financial literacy. k8
C) feelings of control. k8 k8
D) financialability. k8
Answer: C
k8 k 8
Explanation: Feelings of control is the amount of control you feel you have when making financial k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
decisions. People who believe that what happens to them is based on luck or fate might view their
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial journey as uncertain.
k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
1
,3) Internal finance includes your k8 k8 k8
A) financial knowledge. k8
B) financial risk tolerance. k8 k8
C) feelings of control. k8 k8
D) All ofthechoicesarecorrect. k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Internal finance is essentially the combination of financial knowledge, financial risk k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
tolerance, and feelings of control.
k8 k8 k8 k8 k8
Diff: 1
k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
4) Which of the followingrefers to your confidence and peace of mind regarding your financial
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
situation?
k8
A) Financial literacy. k8
B) Financial well-being. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Financial well-being is your confidence and peace of mind regarding your financial k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
situation. Your financial well-being will increase as you apply your financial knowledge, develop
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
skills, and organize your finances to achieve your personal goals.
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2
k8
LO: 1.1, Section 1.1
k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
5) In additiontofinancialknowledge,whichofthe followingisimportantinshaping your view of the
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial world?
k8 k8
A) Financial risk tolerance, only. k8 k8 k8
B) Feelings of control, only. k8 k8 k8
C) Financial well-being only. k8 k8
D) Financialrisk toleranceandfeelingsof control. k8 k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Ourfinancialdecisionscanbebasedonabiasedviewofthefinancialworld,which is k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
based on the combination of our financial knowledge, financial risk tolerance, and feelings of control.
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2
k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
2
,6) Which of the followingrefers to your willingness to engage in financial endeavors that have
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
uncertain outcomes?
k8 k8
A) Financial literacy. k8
B) Financial risk tolerance. k8 k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Your financial risk tolerance is your willingness to engage in financial endeavors that k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
have uncertain outcomes.
k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
7) Which of the followingis measured by adding up how much the United States produces in goods
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
and services in a year?
k8 k8 k8 k8 k8
A) Gross domestic product. k8 k8
B) The cost of goods sold. k8 k8 k8 k8
C) Financial literacy. k8
D) Financialrisktolerance. k8 k8
Answer: A
k8 k 8
Explanation: Gross domestic product (GDP) is measured byadding up how much a country produces in k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
goods and services in a year.
k8 k8 k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
8) How much of GDP consists of consumer spending?
k8 k8 k8 k8 k8 k8 k8
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D k 8 k 8
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearlytwo-thirds (66%) of GDP consists k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
of consumer spending.
k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
3
, 9) Which ofthe following will help you outline exactlyhow to apply your financial knowledge to
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
achieve your life vision?
k8 k8 k8 k8
A) Financial literacy. k8
B) Financialroadmap. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Envisioning the future is not easy, but having a long-term life vision and a plan k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
requires a financial roadmap, a course that will help you outline how to apply your financial
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
knowledge to achieve your life vision.
k8 k8 k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
10) An action item that should be a part of everyone's journey to financial well-being includes which
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
of the following?
k8 k8 k8
A) Keeping good records. k8 k8
B) Spending less than you earn. k8 k8 k8 k8
C) Maintaining appropriate insurance. k8 k8
D) All ofthechoicesarecorrect. k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Theactionsthatcanhelpyoutomanageyourfinancialwell-beinginclude:keeping good k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
records, earn money, manage taxes, spend less than you earn, save wisely, invest strategically,
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
maintain appropriate insurance, and plan for your future.
k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
11) How does consumer spending affect GDP? k8 k8 k8 k8 k8
A) If spending decreases, GDP increases.
k8 k8 k8 k8
B) If spending increases, GDP decreases.
k8 k8 k8 k8
C) If spending increases, GDP increases.
k8 k8 k8 k8
D) Consumerspendingdoesn't affectGDP. k8 k8 k8 k8
Answer: C
k8 k 8
Explanation: Gross domestic product (GDP) is measured by adding up how much a country k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
produces in goods and services in a year. Everything from the value of cars to the value of the shrubs
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
andflowerspurchasedatalocalstoreisincludedinGDP.Sincenearlytwo-thirds(66%)of GDP consists
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
ofconsumerspending; themoreconsumersspend, thelarger GDP becomes. On the other hand, if
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
consumption slows down, GDP goes down.
k8 k8 k8 k8 k8 k8
Diff: 2 k8
LO: 1.1, Section 1.1k 8 k 8 k8 k8
4
Introductionto PersonalFinanceBeginning Your FinancialJourney,2ndEdition John k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
E. Grable, Lance Palmer
k8 k8 k8 k8
Chapter 1-10 k8
Chapter 1 k8 Beginning Your Financial Journey: The Interior Finance Point of View k8 k8 k8 k8 k8 k8 k8 k8 k8
1) Which of the followingrefers to one's abilityto understand and use personal finance
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
information?
k8
A) Financial risk tolerance. k8 k8
B) Financial well-being. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: C
k8 k 8
Explanation: Financial knowledge is the ability to understand personal finance information. Knowing k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
who you are, where you want to go, and what skills you currentlypossess are essential factors shaping your
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial journey.
k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
2) Peoplewhobelievethatwhathappenstothemisbasedonfateorluckmightviewtheirfinancial journey
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
as being uncertain. This is an example of
k8 k8 k8 k8 k8 k8 k8 k8
A) financial risk tolerance. k8 k8
B) financial literacy. k8
C) feelings of control. k8 k8
D) financialability. k8
Answer: C
k8 k 8
Explanation: Feelings of control is the amount of control you feel you have when making financial k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
decisions. People who believe that what happens to them is based on luck or fate might view their
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial journey as uncertain.
k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
1
,3) Internal finance includes your k8 k8 k8
A) financial knowledge. k8
B) financial risk tolerance. k8 k8
C) feelings of control. k8 k8
D) All ofthechoicesarecorrect. k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Internal finance is essentially the combination of financial knowledge, financial risk k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
tolerance, and feelings of control.
k8 k8 k8 k8 k8
Diff: 1
k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
4) Which of the followingrefers to your confidence and peace of mind regarding your financial
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
situation?
k8
A) Financial literacy. k8
B) Financial well-being. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Financial well-being is your confidence and peace of mind regarding your financial k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
situation. Your financial well-being will increase as you apply your financial knowledge, develop
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
skills, and organize your finances to achieve your personal goals.
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2
k8
LO: 1.1, Section 1.1
k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
5) In additiontofinancialknowledge,whichofthe followingisimportantinshaping your view of the
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
financial world?
k8 k8
A) Financial risk tolerance, only. k8 k8 k8
B) Feelings of control, only. k8 k8 k8
C) Financial well-being only. k8 k8
D) Financialrisk toleranceandfeelingsof control. k8 k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Ourfinancialdecisionscanbebasedonabiasedviewofthefinancialworld,which is k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
based on the combination of our financial knowledge, financial risk tolerance, and feelings of control.
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2
k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
2
,6) Which of the followingrefers to your willingness to engage in financial endeavors that have
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
uncertain outcomes?
k8 k8
A) Financial literacy. k8
B) Financial risk tolerance. k8 k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Your financial risk tolerance is your willingness to engage in financial endeavors that k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
have uncertain outcomes.
k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
7) Which of the followingis measured by adding up how much the United States produces in goods
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
and services in a year?
k8 k8 k8 k8 k8
A) Gross domestic product. k8 k8
B) The cost of goods sold. k8 k8 k8 k8
C) Financial literacy. k8
D) Financialrisktolerance. k8 k8
Answer: A
k8 k 8
Explanation: Gross domestic product (GDP) is measured byadding up how much a country produces in k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
goods and services in a year.
k8 k8 k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
8) How much of GDP consists of consumer spending?
k8 k8 k8 k8 k8 k8 k8
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D k 8 k 8
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearlytwo-thirds (66%) of GDP consists k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
of consumer spending.
k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1
k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
3
, 9) Which ofthe following will help you outline exactlyhow to apply your financial knowledge to
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
achieve your life vision?
k8 k8 k8 k8
A) Financial literacy. k8
B) Financialroadmap. k8
C) Financial knowledge. k8
D) Financialability. k8
Answer: B
k8 k 8
Explanation: Envisioning the future is not easy, but having a long-term life vision and a plan k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
requires a financial roadmap, a course that will help you outline how to apply your financial
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
knowledge to achieve your life vision.
k8 k8 k8 k8 k8 k8
Diff: 1 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: K
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
10) An action item that should be a part of everyone's journey to financial well-being includes which
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
of the following?
k8 k8 k8
A) Keeping good records. k8 k8
B) Spending less than you earn. k8 k8 k8 k8
C) Maintaining appropriate insurance. k8 k8
D) All ofthechoicesarecorrect. k8 k8 k8 k8 k8
Answer: D
k8 k 8
Explanation: Theactionsthatcanhelpyoutomanageyourfinancialwell-beinginclude:keeping good k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
records, earn money, manage taxes, spend less than you earn, save wisely, invest strategically,
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
maintain appropriate insurance, and plan for your future.
k8 k8 k8 k8 k8 k8 k8 k8
Diff: 2 k8
LO: 1.1,Section1.1 k 8 k8 k8
Bloom: C
k8 k 8
AACSB / IMA: none;none k8 k8 k 8 k8
AICPA: FC: none
k8 k 8 k8
Min: 1 k 8 k 8
11) How does consumer spending affect GDP? k8 k8 k8 k8 k8
A) If spending decreases, GDP increases.
k8 k8 k8 k8
B) If spending increases, GDP decreases.
k8 k8 k8 k8
C) If spending increases, GDP increases.
k8 k8 k8 k8
D) Consumerspendingdoesn't affectGDP. k8 k8 k8 k8
Answer: C
k8 k 8
Explanation: Gross domestic product (GDP) is measured by adding up how much a country k 8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
produces in goods and services in a year. Everything from the value of cars to the value of the shrubs
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
andflowerspurchasedatalocalstoreisincludedinGDP.Sincenearlytwo-thirds(66%)of GDP consists
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
ofconsumerspending; themoreconsumersspend, thelarger GDP becomes. On the other hand, if
k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8 k8
consumption slows down, GDP goes down.
k8 k8 k8 k8 k8 k8
Diff: 2 k8
LO: 1.1, Section 1.1k 8 k 8 k8 k8
4
