TEST BANK
INTRODUCTION TO PERSONAL FINANCE:
BEGINNING YOUR FINANCIAL JOURNEY
1
,Test Bank For
Introduction To Personal Finance Beginning Your Financial Journey, 3rd Edition John E. Grable,
Lance Palmer
Chapter 1-10
Chapter 1 Beginning Your Financial Journey: The Interior Finance Point Of View
1) Which Of The Following Refers To One's Ability To Understand And Use Personal
Finance Information?
A) Financial Risk Tolerance.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
C
Explanation: Financial Knowledge Is The Ability To Understand Personal Finance Information.
Knowing Who You Are, Where You Want To Go, And What Skills You Currently Possess Are
Essential Factors Shaping Your Financial Journey.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
2) People Who Believe That What Happens To Them Is Based On Fate Or Luck Might View Their
Financial Journey As Being Uncertain. This Is An Example Of
A) Financial Risk Tolerance.
B) Financial Literacy.
C) Feelings Of Control.
D) Financial
Ability. Answer:
C
Explanation: Feelings Of Control Is The Amount Of Control You Feel You Have When Making
Financial Decisions. People Who Believe That What Happens To Them Is Based On Luck Or
Fate Might View Their Financial Journey As Uncertain.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
2
,3) Internal Finance Includes Your
A) Financial Knowledge.
B) Financial Risk Tolerance.
C) Feelings Of Control.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Internal Finance Is Essentially The Combination Of Financial Knowledge,
Financial Risk Tolerance, And Feelings Of Control.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
4) Which Of The Following Refers To Your Confidence And Peace Of Mind Regarding Your
Financial Situation?
A) Financial Literacy.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Financial Well-Being Is Your Confidence And Peace Of Mind Regarding Your
Financial Situation. Your Financial Well-Being Will Increase As You Apply Your Financial
Knowledge, Develop Skills, And Organize Your Finances To Achieve Your Personal Goals.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
5) In Addition To Financial Knowledge, Which Of The Following Is Important In Shaping Your
View Of The Financial World?
A) Financial Risk Tolerance, Only.
B) Feelings Of Control, Only.
C) Financial Well-Being Only.
D) Financial Risk Tolerance And Feelings Of
Control. Answer: D
Explanation: Our Financial Decisions Can Be Based On A Biased View Of The Financial World,
Which Is Based On The Combination Of Our Financial Knowledge, Financial Risk Tolerance,
And Feelings Of Control.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
3
,Min: 1
6) Which Of The Following Refers To Your Willingness To Engage In Financial Endeavors
That Have Uncertain Outcomes?
A) Financial Literacy.
B) Financial Risk Tolerance.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Your Financial Risk Tolerance Is Your Willingness To Engage In Financial
Endeavors That Have Uncertain Outcomes.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
7) Which Of The Following Is Measured By Adding Up How Much The United States
Produces In Goods And Services In A Year?
A) Gross Domestic Product.
B) The Cost Of Goods Sold.
C) Financial Literacy.
D) Financial Risk
Tolerance. Answer: A
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
8) How Much Of Gdp Consists Of Consumer Spending?
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D
Explanation: In 2022, The U.S. Gdp Was $24.46 Trillion And Nearly Two-Thirds (66%) Of
Gdp Consists Of Consumer Spending.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
4
,9) Which Of The Following Will Help You Outline Exactly How To Apply Your Financial
Knowledge To Achieve Your Life Vision?
A) Financial Literacy.
B) Financial Roadmap.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Envisioning The Future Is Not Easy, But Having A Long-Term Life Vision And A
Plan Requires A Financial Roadmap, A Course That Will Help You Outline How To Apply
Your Financial Knowledge To Achieve Your Life Vision.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
10) An Action Item That Should Be A Part Of Everyone's Journey To Financial Well-Being
Includes Which Of The Following?
A) Keeping Good Records.
B) Spending Less Than You Earn.
C) Maintaining Appropriate Insurance.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: The Actions That Can Help You To Manage Your Financial Well-Being Include:
Keeping Good Records, Earn Money, Manage Taxes, Spend Less Than You Earn, Save Wisely,
Invest Strategically, Maintain Appropriate Insurance, And Plan For Your Future.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
11) How Does Consumer Spending Affect Gdp?
A) If Spending Decreases, Gdp Increases.
B) If Spending Increases, Gdp Decreases.
C) If Spending Increases, Gdp Increases.
D) Consumer Spending Doesn't Affect
Gdp. Answer: C
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year. Everything From The Value Of Cars To The Value
Of The Shrubs And Flowers Purchased At A Local Store Is Included In Gdp. Since Nearly Two-
Thirds (66%) Of Gdp Consists Of Consumer Spending; The More Consumers Spend, The Larger
Gdp Becomes. On The Other Hand, If Consumption Slows Down, Gdp Goes Down.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
5
,Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
12) Financial Literacy Takes More Than Financial Knowledge. You Must Also Have Some Key
Personal Behaviors, Including Which Of The Following?
A) Self-Control.
B) A Desire To Apply Financial Information To The Management Of Your Household
Financial Situation.
C) An Interest In Personal Finance Topics.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Financial Literacy Is One Of The Most Important Predictors Of Savings And
Investment Success And Overall Well-Being. In Addition To Financial Knowledge, You Must
Possess Financial Discipline (Self-Control) And A Desire To Develop Skills And Apply Your
Financial Knowledge To Achieve Your Personal Goals.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
13) Which Of The Following Is One Of The Most Important Predictors Of Savings And
Investment Success, And Overall Well-Being?
A) Financial Literacy.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
A
Explanation: Financial Literacy Is One Of The Most Important Predictors Of Savings And
Investment Success And Overall Well-Being.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
14) Those Who Increase Their Financial Tend To Experience Greater Life And
Financial Well-Being.
A) Literacy
B) Risks
C) Knowledge
D) Ability
Answer:
C
Explanation: As You Apply Your Financial Knowledge, Develop Skills, And Organize Your
6
,Finances To Achieve Your Personal Goals, Your Confidence And Peace Of Mind Regarding
Your Financial Situation, Or Your Financial Well-Being, Will Increase.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
15) If You Slow Down Or Stop Spending, What Happens To Gdp?
A) Gdp Increases.
B) Gdp Decreases.
C) Gdp Is Unchanged.
D) Gdp Is Not Related To Consumer
Spending. Answer: B
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year. Everything From The Value Of Cars To The Value
Of The Shrubs And Flowers Purchased At A Local Store Is Included In Gdp. Since Nearly Two-
Thirds (66%) Of Gdp Consists Of Consumer Spending, The More Consumers Spend, The Larger
Gdp Becomes. On The Other Hand, If Consumption Slows Down, Gdp Goes Down.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: A
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
16) Scarcity Refers To:
A) Having Unlimited Resources Available.
B) Having Too Much Debt.
C) Having Too Little Financial Knowledge.
D) Having Limited Resources
Available. Answer: D
Explanation: Scarcity Refers To Having A Limited Number Of Resources
Available. Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
17) Your Ability And Willingness To Work, Learn, Earn, And Make Wise Decisions About How
To Save And Invest Money Refers To What?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: D
7
,Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
18) How Well You Are Able To Form Connections With Other People Is Referred To As What?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: C
Explanation: Social Capital Is How Well You Are Able To Form Connections With Other
People. Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
19) Human Capital Is Your Most Valuable:
A) Asset.
B) Liability.
C) Skill.
D) Ability.
Answer:
A
Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money. Human Capital Is Your Most Valuable
Asset, As It Determines Your Life-Long Earnings Potential.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
20) Example(S) Of Human Capital Include Which Of The Following?
A) Formal Education.
B) Health.
C) Skill Development.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money. Your Earnings Are An Indicator Of The
8
,Value Of Your Human Capital In The Labor Market. Earnings Are Often Closely Associated With
Your Level Of Formal Education, Continuing Professional Education And Skill Development, And
Your Health.
Diff: 2
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
21) Which Of The Following Is Not Found In Individuals Themselves But Rather In The
Space Between Individuals Or The Network Of Connections Among People?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: C
Explanation: Unlike Human Capital, Social Capital Is Not Found In Individuals Themselves
But Rather In The Space Between Individuals, Or The Network Of Connections Among People.
Social Capital Is How Well You Are Able To Form Connections With Other People. As Such,
Your Social Capital Will Affect The Value Of Your Human Capital, Particularly How Much
You Earn Over Your Working Life.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
22) Social Capital Includes Which Of The Following?
A) Informal And Formal Networks.
B) Financial Well-Being And Financial Knowledge.
C) Formal Networks And Financial Knowledge.
D) Human Capital And Informal
Networks. Answer: A
Explanation: Social Capital Is How Well You Are Able To Form Connections With Other
People, Such As Informal And Formal Networks. Informal Networks Are The Interpersonal
Relationships You Form With Your Family And Close Friends. Formal Networks Connect You
With People In Professional, Recreational, Leisure, And Social Communities.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
9
, 23) Which Of The Following Includes The Interpersonal Relationships You Form With Your
Family And Close Friends?
A) Informal Networks.
B) Formal Networks.
C) Financial Capability.
D) Human
Capital.
Answer: A
Explanation: Informal Networks Are The Interpersonal Relationships You Form With Your
Family And Close Friends. Informal Networks Can Provide Encouragement And Support.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
24) Which Of The Following Connects You With People In Professional And Social Communities?
A) Informal Networks.
B) Formal Networks.
C) Financial Capability.
D) Human
Capital.
Answer: B
Explanation: Formal Networks Connect You With People In Professional, Recreational, Leisure,
And Social Communities. Formal Networks Include Clubs, Organizations, And Professional
Associations. Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
25) Which Of The Following Can Both Help And Seriously Deplete Your Social Capital?
A) Informal Networks.
B) Formal Networks.
C) Social Media Sites.
D) Human
Capital.
Answer: C
Explanation: Be Wary Of How You Present Yourself On Social Media Sites And With Whom
You Are Sharing Your Personal Information. Employers, For Example, Routinely Monitor Such
Sites When Hiring And Might Be Making Skewed Evaluations About Your Personal And
Professional Qualifications Based On What They See. While Social Media Sites May Help You
Engage More People, The Information Can Be Misinterpreted In A Negative Way.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
10
INTRODUCTION TO PERSONAL FINANCE:
BEGINNING YOUR FINANCIAL JOURNEY
1
,Test Bank For
Introduction To Personal Finance Beginning Your Financial Journey, 3rd Edition John E. Grable,
Lance Palmer
Chapter 1-10
Chapter 1 Beginning Your Financial Journey: The Interior Finance Point Of View
1) Which Of The Following Refers To One's Ability To Understand And Use Personal
Finance Information?
A) Financial Risk Tolerance.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
C
Explanation: Financial Knowledge Is The Ability To Understand Personal Finance Information.
Knowing Who You Are, Where You Want To Go, And What Skills You Currently Possess Are
Essential Factors Shaping Your Financial Journey.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
2) People Who Believe That What Happens To Them Is Based On Fate Or Luck Might View Their
Financial Journey As Being Uncertain. This Is An Example Of
A) Financial Risk Tolerance.
B) Financial Literacy.
C) Feelings Of Control.
D) Financial
Ability. Answer:
C
Explanation: Feelings Of Control Is The Amount Of Control You Feel You Have When Making
Financial Decisions. People Who Believe That What Happens To Them Is Based On Luck Or
Fate Might View Their Financial Journey As Uncertain.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
2
,3) Internal Finance Includes Your
A) Financial Knowledge.
B) Financial Risk Tolerance.
C) Feelings Of Control.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Internal Finance Is Essentially The Combination Of Financial Knowledge,
Financial Risk Tolerance, And Feelings Of Control.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
4) Which Of The Following Refers To Your Confidence And Peace Of Mind Regarding Your
Financial Situation?
A) Financial Literacy.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Financial Well-Being Is Your Confidence And Peace Of Mind Regarding Your
Financial Situation. Your Financial Well-Being Will Increase As You Apply Your Financial
Knowledge, Develop Skills, And Organize Your Finances To Achieve Your Personal Goals.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
5) In Addition To Financial Knowledge, Which Of The Following Is Important In Shaping Your
View Of The Financial World?
A) Financial Risk Tolerance, Only.
B) Feelings Of Control, Only.
C) Financial Well-Being Only.
D) Financial Risk Tolerance And Feelings Of
Control. Answer: D
Explanation: Our Financial Decisions Can Be Based On A Biased View Of The Financial World,
Which Is Based On The Combination Of Our Financial Knowledge, Financial Risk Tolerance,
And Feelings Of Control.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
3
,Min: 1
6) Which Of The Following Refers To Your Willingness To Engage In Financial Endeavors
That Have Uncertain Outcomes?
A) Financial Literacy.
B) Financial Risk Tolerance.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Your Financial Risk Tolerance Is Your Willingness To Engage In Financial
Endeavors That Have Uncertain Outcomes.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
7) Which Of The Following Is Measured By Adding Up How Much The United States
Produces In Goods And Services In A Year?
A) Gross Domestic Product.
B) The Cost Of Goods Sold.
C) Financial Literacy.
D) Financial Risk
Tolerance. Answer: A
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
8) How Much Of Gdp Consists Of Consumer Spending?
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D
Explanation: In 2022, The U.S. Gdp Was $24.46 Trillion And Nearly Two-Thirds (66%) Of
Gdp Consists Of Consumer Spending.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
4
,9) Which Of The Following Will Help You Outline Exactly How To Apply Your Financial
Knowledge To Achieve Your Life Vision?
A) Financial Literacy.
B) Financial Roadmap.
C) Financial Knowledge.
D) Financial
Ability. Answer:
B
Explanation: Envisioning The Future Is Not Easy, But Having A Long-Term Life Vision And A
Plan Requires A Financial Roadmap, A Course That Will Help You Outline How To Apply
Your Financial Knowledge To Achieve Your Life Vision.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
10) An Action Item That Should Be A Part Of Everyone's Journey To Financial Well-Being
Includes Which Of The Following?
A) Keeping Good Records.
B) Spending Less Than You Earn.
C) Maintaining Appropriate Insurance.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: The Actions That Can Help You To Manage Your Financial Well-Being Include:
Keeping Good Records, Earn Money, Manage Taxes, Spend Less Than You Earn, Save Wisely,
Invest Strategically, Maintain Appropriate Insurance, And Plan For Your Future.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
11) How Does Consumer Spending Affect Gdp?
A) If Spending Decreases, Gdp Increases.
B) If Spending Increases, Gdp Decreases.
C) If Spending Increases, Gdp Increases.
D) Consumer Spending Doesn't Affect
Gdp. Answer: C
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year. Everything From The Value Of Cars To The Value
Of The Shrubs And Flowers Purchased At A Local Store Is Included In Gdp. Since Nearly Two-
Thirds (66%) Of Gdp Consists Of Consumer Spending; The More Consumers Spend, The Larger
Gdp Becomes. On The Other Hand, If Consumption Slows Down, Gdp Goes Down.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: C
5
,Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
12) Financial Literacy Takes More Than Financial Knowledge. You Must Also Have Some Key
Personal Behaviors, Including Which Of The Following?
A) Self-Control.
B) A Desire To Apply Financial Information To The Management Of Your Household
Financial Situation.
C) An Interest In Personal Finance Topics.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Financial Literacy Is One Of The Most Important Predictors Of Savings And
Investment Success And Overall Well-Being. In Addition To Financial Knowledge, You Must
Possess Financial Discipline (Self-Control) And A Desire To Develop Skills And Apply Your
Financial Knowledge To Achieve Your Personal Goals.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
13) Which Of The Following Is One Of The Most Important Predictors Of Savings And
Investment Success, And Overall Well-Being?
A) Financial Literacy.
B) Financial Well-Being.
C) Financial Knowledge.
D) Financial
Ability. Answer:
A
Explanation: Financial Literacy Is One Of The Most Important Predictors Of Savings And
Investment Success And Overall Well-Being.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
14) Those Who Increase Their Financial Tend To Experience Greater Life And
Financial Well-Being.
A) Literacy
B) Risks
C) Knowledge
D) Ability
Answer:
C
Explanation: As You Apply Your Financial Knowledge, Develop Skills, And Organize Your
6
,Finances To Achieve Your Personal Goals, Your Confidence And Peace Of Mind Regarding
Your Financial Situation, Or Your Financial Well-Being, Will Increase.
Diff: 1
Lo: 1.1, Section 1.1
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
15) If You Slow Down Or Stop Spending, What Happens To Gdp?
A) Gdp Increases.
B) Gdp Decreases.
C) Gdp Is Unchanged.
D) Gdp Is Not Related To Consumer
Spending. Answer: B
Explanation: Gross Domestic Product (Gdp) Is Measured By Adding Up How Much A Country
Produces In Goods And Services In A Year. Everything From The Value Of Cars To The Value
Of The Shrubs And Flowers Purchased At A Local Store Is Included In Gdp. Since Nearly Two-
Thirds (66%) Of Gdp Consists Of Consumer Spending, The More Consumers Spend, The Larger
Gdp Becomes. On The Other Hand, If Consumption Slows Down, Gdp Goes Down.
Diff: 2
Lo: 1.1, Section 1.1
Bloom: A
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
16) Scarcity Refers To:
A) Having Unlimited Resources Available.
B) Having Too Much Debt.
C) Having Too Little Financial Knowledge.
D) Having Limited Resources
Available. Answer: D
Explanation: Scarcity Refers To Having A Limited Number Of Resources
Available. Diff: 1
Lo: 1.1, Section 1.1
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
17) Your Ability And Willingness To Work, Learn, Earn, And Make Wise Decisions About How
To Save And Invest Money Refers To What?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: D
7
,Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
18) How Well You Are Able To Form Connections With Other People Is Referred To As What?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: C
Explanation: Social Capital Is How Well You Are Able To Form Connections With Other
People. Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
19) Human Capital Is Your Most Valuable:
A) Asset.
B) Liability.
C) Skill.
D) Ability.
Answer:
A
Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money. Human Capital Is Your Most Valuable
Asset, As It Determines Your Life-Long Earnings Potential.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
20) Example(S) Of Human Capital Include Which Of The Following?
A) Formal Education.
B) Health.
C) Skill Development.
D) All Of These Answer Choices Are
Correct. Answer: D
Explanation: Human Capital Is Your Ability And Willingness To Work, Learn, Earn, And Make
Wise Decisions About How To Save And Invest Money. Your Earnings Are An Indicator Of The
8
,Value Of Your Human Capital In The Labor Market. Earnings Are Often Closely Associated With
Your Level Of Formal Education, Continuing Professional Education And Skill Development, And
Your Health.
Diff: 2
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
21) Which Of The Following Is Not Found In Individuals Themselves But Rather In The
Space Between Individuals Or The Network Of Connections Among People?
A) Financial Literacy.
B) Financial Well-Being.
C) Social Capital.
D) Human
Capital.
Answer: C
Explanation: Unlike Human Capital, Social Capital Is Not Found In Individuals Themselves
But Rather In The Space Between Individuals, Or The Network Of Connections Among People.
Social Capital Is How Well You Are Able To Form Connections With Other People. As Such,
Your Social Capital Will Affect The Value Of Your Human Capital, Particularly How Much
You Earn Over Your Working Life.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
22) Social Capital Includes Which Of The Following?
A) Informal And Formal Networks.
B) Financial Well-Being And Financial Knowledge.
C) Formal Networks And Financial Knowledge.
D) Human Capital And Informal
Networks. Answer: A
Explanation: Social Capital Is How Well You Are Able To Form Connections With Other
People, Such As Informal And Formal Networks. Informal Networks Are The Interpersonal
Relationships You Form With Your Family And Close Friends. Formal Networks Connect You
With People In Professional, Recreational, Leisure, And Social Communities.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
9
, 23) Which Of The Following Includes The Interpersonal Relationships You Form With Your
Family And Close Friends?
A) Informal Networks.
B) Formal Networks.
C) Financial Capability.
D) Human
Capital.
Answer: A
Explanation: Informal Networks Are The Interpersonal Relationships You Form With Your
Family And Close Friends. Informal Networks Can Provide Encouragement And Support.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
24) Which Of The Following Connects You With People In Professional And Social Communities?
A) Informal Networks.
B) Formal Networks.
C) Financial Capability.
D) Human
Capital.
Answer: B
Explanation: Formal Networks Connect You With People In Professional, Recreational, Leisure,
And Social Communities. Formal Networks Include Clubs, Organizations, And Professional
Associations. Diff: 1
Lo: 1.2, Section 1.2
Bloom: K
Aacsb / Ima: None; None
Aicpa: Fc: None
Min: 1
25) Which Of The Following Can Both Help And Seriously Deplete Your Social Capital?
A) Informal Networks.
B) Formal Networks.
C) Social Media Sites.
D) Human
Capital.
Answer: C
Explanation: Be Wary Of How You Present Yourself On Social Media Sites And With Whom
You Are Sharing Your Personal Information. Employers, For Example, Routinely Monitor Such
Sites When Hiring And Might Be Making Skewed Evaluations About Your Personal And
Professional Qualifications Based On What They See. While Social Media Sites May Help You
Engage More People, The Information Can Be Misinterpreted In A Negative Way.
Diff: 1
Lo: 1.2, Section 1.2
Bloom: C
Aacsb / Ima: None; None
10
