, TESTBANK FOR Personal Finance 15th Edition Garman
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
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correct version, free of charge.
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Contact Email:
,Chapter 1: Thinking like a Financial Planner
True / False
1. Financial literacy is knowledge of facts, concepts, principles, and tools of money management that are
fundamental to being smart about money.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
2. Personal finance involves how people spend, save, protect, and invest their financial resources.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
3. Financial success is defined as having high wealth.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
4. Financial security is defined as having a high income.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 1: Thinking like a Financial Planner
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
5. People who save and invest are much more likely to have funds for future consumption.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
6. Standard of living refers to an individual's level of spending and consumption.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
7. Standard of living is what individuals or groups aspire to attain, and level of living is the level of
wealth, comfort, materials goods, and necessities one is currently living with.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
8. Financial security or wealth requires you to spend less than you earn.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 1: Thinking like a Financial Planner
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Understand
9. A business cycle is a wavelike pattern of economic activity that includes an expansion, peak,
contraction, and trough.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
10. The expansion phase is the preferred stage of the economic cycle.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
11. As it is impossible to make precise forecasts about economic trends, we can ignore inflation and
interest rates when planning our finances.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
12. The gross domestic product broadly measures the nation’s economic health.
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 1: Thinking like a Financial Planner
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our personal financia
KEYWORDS: Bloom’s: Understand
13. Procyclical economic indicators move in the same direction as the economy.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
14. The index of leading economic indicators is a composite index reported monthly that suggests the
future direction of the U.S. economy.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
15. Leading economic indicators are relied upon to measure the state of the economy at any point in time.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 1: Thinking like a Financial Planner
16. An example of inflation is an increase in the price of coffee, gasoline, or other commodities.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
17. A steady rise in the general level of prices is called inflation.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
18. Deflation is a period of declining prices.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
19. Deflation occurs in an economy when there is an expansion in the money supply.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Challenging
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
Copyright Cengage Learning. Powered by Cognero. Page 5
,Chapter 1: Thinking like a Financial Planner
personal financial success.
KEYWORDS: Bloom’s: Understand
20. The amount of goods and services that one's income will buy is called purchasing power.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
21. Retirees or others on fixed incomes suffer during times of moderate to high inflation.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
22. Nominal income is adjusted for inflation and thus reflects the actual purchasing power of one's
income.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
23. In times of high inflation, personal incomes generally keep up with the inflation rate.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
Copyright Cengage Learning. Powered by Cognero. Page 6
,Chapter 1: Thinking like a Financial Planner
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
24. The consumer price index is a broad measure of price changes in all goods and services purchased for
consumption by urban households.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
25. The term interest refers to the price of borrowing money.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
26. Interest rates on home mortgages and other loans tend to fall during high inflation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
27. All things considered, a saver who earns 4 percent interest on a savings account when the rate of
inflation is 4 percent is losing real purchasing power.
a. True
b. False
Copyright Cengage Learning. Powered by Cognero. Page 7
, Chapter 1: Thinking like a Financial Planner
ANSWER: True
POINTS: 1
DIFFICULTY: Challenging
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our personal financia
KEYWORDS: Bloom’s: Understand
28. Smart investors recognize that inflation risk is higher for long-term lending than for short-term
lending.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
29. Interest rates earned on short-term investments are generally lower than those earned on longer-term
investments.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
30. The rate of interest and the inflation rate generally move in the same directions; when one goes up, the
other also goes up.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
Copyright Cengage Learning. Powered by Cognero. Page 8
Important Notes
The file includes the complete test bank, organized chapter by chapter.
A sample of selected pages has been provided for preview.
All available appendices and Excel files (if included in the original resources) are
provided.
We continuously update our files to ensure you receive the latest and most accurate
editions.
New editions are added regularly – stay connected for updates!
✅ Why Buy From Us?
📚 Complete & organized chapter-by-chapter – no missing content, no guessing.
⚡ Instant digital delivery – get your file the moment you pay, no waiting.
📅 Always up to date – we track new editions so you always get the latest version.
💬 Friendly support – real humans ready to help, anytime you need us.
🔒 Safe & secure – thousands of satisfied students trust us every semester.
🛡️Our Guarantees
💰 Money-Back Guarantee: Not satisfied? We offer a full refund – no questions asked.
🔄 Wrong File? No Problem: Contact us and we will replace it immediately with the
correct version, free of charge.
⏰ 24/7 Support: We are always here – reach out anytime and expect a fast response.
Contact Email:
,Chapter 1: Thinking like a Financial Planner
True / False
1. Financial literacy is knowledge of facts, concepts, principles, and tools of money management that are
fundamental to being smart about money.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
2. Personal finance involves how people spend, save, protect, and invest their financial resources.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
3. Financial success is defined as having high wealth.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
4. Financial security is defined as having a high income.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
Copyright Cengage Learning. Powered by Cognero. Page 1
,Chapter 1: Thinking like a Financial Planner
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
5. People who save and invest are much more likely to have funds for future consumption.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
6. Standard of living refers to an individual's level of spending and consumption.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
7. Standard of living is what individuals or groups aspire to attain, and level of living is the level of
wealth, comfort, materials goods, and necessities one is currently living with.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Remember
8. Financial security or wealth requires you to spend less than you earn.
a. True
b. False
ANSWER: True
Copyright Cengage Learning. Powered by Cognero. Page 2
,Chapter 1: Thinking like a Financial Planner
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.1 Achieving Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.01 - Recognize the keys to achieving financial
success.
KEYWORDS: Bloom’s: Understand
9. A business cycle is a wavelike pattern of economic activity that includes an expansion, peak,
contraction, and trough.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
10. The expansion phase is the preferred stage of the economic cycle.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
11. As it is impossible to make precise forecasts about economic trends, we can ignore inflation and
interest rates when planning our finances.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
12. The gross domestic product broadly measures the nation’s economic health.
Copyright Cengage Learning. Powered by Cognero. Page 3
,Chapter 1: Thinking like a Financial Planner
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our personal financia
KEYWORDS: Bloom’s: Understand
13. Procyclical economic indicators move in the same direction as the economy.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
14. The index of leading economic indicators is a composite index reported monthly that suggests the
future direction of the U.S. economy.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
15. Leading economic indicators are relied upon to measure the state of the economy at any point in time.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
Copyright Cengage Learning. Powered by Cognero. Page 4
,Chapter 1: Thinking like a Financial Planner
16. An example of inflation is an increase in the price of coffee, gasoline, or other commodities.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
17. A steady rise in the general level of prices is called inflation.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
18. Deflation is a period of declining prices.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
19. Deflation occurs in an economy when there is an expansion in the money supply.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Challenging
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
Copyright Cengage Learning. Powered by Cognero. Page 5
,Chapter 1: Thinking like a Financial Planner
personal financial success.
KEYWORDS: Bloom’s: Understand
20. The amount of goods and services that one's income will buy is called purchasing power.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
21. Retirees or others on fixed incomes suffer during times of moderate to high inflation.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
22. Nominal income is adjusted for inflation and thus reflects the actual purchasing power of one's
income.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
23. In times of high inflation, personal incomes generally keep up with the inflation rate.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
Copyright Cengage Learning. Powered by Cognero. Page 6
,Chapter 1: Thinking like a Financial Planner
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
24. The consumer price index is a broad measure of price changes in all goods and services purchased for
consumption by urban households.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
25. The term interest refers to the price of borrowing money.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Remember
26. Interest rates on home mortgages and other loans tend to fall during high inflation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
27. All things considered, a saver who earns 4 percent interest on a savings account when the rate of
inflation is 4 percent is losing real purchasing power.
a. True
b. False
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, Chapter 1: Thinking like a Financial Planner
ANSWER: True
POINTS: 1
DIFFICULTY: Challenging
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our personal financia
KEYWORDS: Bloom’s: Understand
28. Smart investors recognize that inflation risk is higher for long-term lending than for short-term
lending.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
29. Interest rates earned on short-term investments are generally lower than those earned on longer-term
investments.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
30. The rate of interest and the inflation rate generally move in the same directions; when one goes up, the
other also goes up.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: 1.2 The Economy Affects Our Personal Financial Success
QUESTION TYPE: True / False
LEARNING OBJECTIVES: PFIN.GARMAN.27.01.02 - Understand how the economy affects our
personal financial success.
KEYWORDS: Bloom’s: Understand
Copyright Cengage Learning. Powered by Cognero. Page 8
