Personal Economics
Exam Practice Tests
Course Introduction
Personal Economics explores the fundamental principles of economic decision-making as they pertain to individuals and households. The course covers key topics such as budgeting, saving, investing, credit management, insurance, taxation, and retirement planning. Through case studies and practical exercises, students learn how economic theories and concepts apply to real-life financial choices, enabling them to analyze and improve their own financial well-being. Emphasis is placed on developing the skills necessary to make informed personal finance decisions in a changing economic environment.
Recommended Textbook
Personal Finance 13th Edition by E. Thomas Garman
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17 Chapters
3061 Verified Questions
3061 Flashcards
Source URL: https://quizplus.com/study-set/1328
Page 2
Chapter 1: Understanding Personal Finance
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148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/26518
Sample Questions
Q1) Compounding serves as the basis of all time value of money considerations.
A)True
B)False Answer: True
Q2) Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?
A)Prime rate
B)Federal funds rate
C)Discount rate
D)Mortgage rate Answer: B
Q3) Future value is the valuation of an asset projected to the end of a particular time period in the future.
A)True
B)False Answer: True
Q4) Deflation involves falling prices.
A)True
B)False Answer: True
Page 3
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Chapter 2: Career Planning
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76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/26519
Sample Questions
Q1) Whenever you request that someone write a reference letter you should provide the person with your résumé.
A)True
B)False
Answer: True
Q2) As many as 75 percent of all job openings are listed in want ads.
A)True
B)False
Answer: False
Q3) A mentor is a powerfully positioned champion who advocates on a job protégé's behalf and guides the protégé toward key players and assignments.
A)True
B)False
Answer: False
Q4) The act of recommending someone to another for possible employment is a job referral.
A)True
B)False Answer: True
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Chapter 3: Financial Statements,tools,and Budgets
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150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/26520
Sample Questions
Q1) A family with two income earners will always need a greater amount of cash reserves than a family with one earner.
A)True
B)False
Answer: False
Q2) The best method to control overspending is to regularly monitor unexpended balances in each budget classification.
A)True
B)False
Answer: True
Q3) The debt payments-to-disposable-income ratio is gross income divided by monthly nonmortgage debt repayments.
A)True
B)False
Answer: False
Q4) It is usually easy to reduce a fixed expense.
A)True
B)False
Answer: False
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Chapter 4: Managing Income Taxes
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201 Verified Questions
201 Flashcards
Source URL: https://quizplus.com/quiz/26521
Sample Questions
Q1) Refer to Figure 4-1.What is the maximum number of personal exemptions Tony and Liz can take this year?
A)Four
B)Three
C)Two
D)One
Q2) Total itemized deductions must be ____ to reduce your tax liability.
A)greater than your standard deduction
B)greater than 7.5 percent of your adjusted gross income
C)greater than 5 percent of your adjusted gross income
D)less than your taxable income
Q3) High-income households who have sufficient adjustments,deductions and credits to reduce their income tax liability to low levels may instead be subject to the ______ so that they pay a more appropriate level of taxes based on their gross income.
A)alternative-minimum tax
B)value-added tax
C)progressive adjusted tax
D)gross adjusted tax
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Chapter 5: Managing Checking and Savings Accounts
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181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/26522
Sample Questions
Q1) Which of the following is not true about commercial banks?
A)Commercial banks are corporations chartered under federal and state regulations.
B)Accounts in federally chartered commercial banks are insured against loss by the Bank Insurance Fund of the Federal Deposit Insurance Corporation.
C)Commercial banks offer numerous consumer services.
D)Commercial banks generally pay depositors an interest rate about 0.10 to 0.20 percentage points higher than the rate found at savings banks.
Q2) One should accumulate enough savings to cover living expenses for six to nine months.
A)True
B)False
Q3) Which of the following is not a benefit of a savings account?
A)A way to save for your child's education
B)Builds funds for large, irregular expenses
C)Protection against inflation
D)A way to achieve short-term savings goals
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Chapter 6: Building and Maintaining Good Credit
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26523
Sample Questions
Q1) The following is a sign of overindebtedness:
A)Remaining under the maximum approved credit limits on your credit cards
B)Requesting new credit cards and increases in credit limits
C)Paying the full balance on your credit card each month
D)Paying insurance premiums, taxes, or other large, predictable bills by payroll deduction
Q2) Loans generally require equal payments over a set period of time.
A)True
B)False
Q3) Advantages of credit use include increased protection against rip-offs and frauds. A)True B)False
Q4) According to a recent study,approximately 5 percent of those applying for credit are turned down.
A)True B)False
Q5) You should review your credit bureau reports at least once every three years. A)True B)False
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Chapter 7: Credit Cards and Consumer Loans
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166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/26524
Sample
Questions
Q1) Failure to pay the balance in full in a given month on a credit card with a grace period means that you
A)must pay interest on all new borrowings with the card since the last billing statement.
B)pay a higher minimum payment the next month.
C)pay all new borrowings in full the next month.
D)stop using the card until the balance is paid.
Q2) The penalty APR is a measure of the number of credit card users that pay only the minimum each month.
A)True
B)False
Q3) Chargebacks are the same as cash discounts.
A)True
B)False
Q4) All mandatory charges to be paid by the borrower must be included in the finance charge.
A)True
B)False
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Chapter 8: Vehicles and Other Major Purchases
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145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/26525
Sample Questions
Q1) ____ should be completed before interacting with sellers.
A)Distinguishing between needs and wants
B)Preshopping research
C)Fitting the budget
D)(all of these)
Q2) A dispute solution that is legally binding on at least one party is
A)civil court.
B)small claims court.
C)mediation.
D)arbitration.
Q3) Consumer Reports comprehensive review of makes and models of vehicles occurs annually in its ____________ edition.
A)January
B)April
C)September
D)December
Q4) You may want to buy a service contract for peace of mind,but it is generally unwise economically.
A)True
B)False
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Chapter 9: Obtaining Affordable Housing
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217 Verified Questions
217 Flashcards
Source URL: https://quizplus.com/quiz/26526
Sample Questions
Q1) Assuming Janice and Ronald are willing to accept the higher risk of the loan 4 adjustable-rate mortgage (ARM),what is the highest possible interest rate they would be paying after three years?
A)4.75 percent
B)5.75 percent
C)7.75 percent
D)9.75 percent
Q2) When estimating monthly housing costs,add an additional 40 or more percent to your loan amount payment for such things as homeowner's insurance,property taxes,maintenance,and upkeep.
A)True
B)False
Q3) The first attempt by a lender to dispose of a completely foreclosed property is at a foreclosure auction.
A)True
B)False
Q4) Federal regulations require that interest must be paid on security deposits.
A)True
B)False
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Chapter 10: Managing Property and Liability Risk
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209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/26527
Sample Questions
Q1) In administering a risk-management program,you should use the maximum possible loss as a guide for the dollar amount of coverage to buy.
A)True
B)False
Q2) Assume you own a refrigerator that was purchased new seven years ago for $900,would cost $1200 today,and that it was expected to last ten years when purchased.Similar used refrigerators sell for about $300.What is its actual cash value?
A)$270
B)$300
C)$360
D)$900
Q3) Your auto liability coverage will usually protect you for liability claims when you drive a rental car.
A)True
B)False
Q4) Risk avoidance is always a practical way of handling risk.
A)True
B)False
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Page 12
Chapter 11: Managing Health Expenses
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136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/26528
Sample Questions
Q1) Most companies will not write disability income policies for more than ____ percent of one's after-tax earnings.
A)80 to100
B)60 to 80
C)40 to 60
D)20 to 40
Q2) The greater your age when a disability income policy is purchased,the more you might need inflation protection.
A)True
B)False
Q3) You can make changes in your group health care plan at any time during the year
A)True
B)False
Q4) The claims procedures for nearly all health care plans include patient payment for the health service with the insurance reimbursing the patient after the appropriate forms are filed.
A)True
B)False
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Page 13
Chapter 12: Life Insurance Planning
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215 Verified Questions
215 Flashcards
Source URL: https://quizplus.com/quiz/26529
Sample Questions
Q1) Variable life insurance is also called flexible-premium variable life insurance.
A)True B)False
Q2) If an insured falsely claims to be a nonsmoker to get life insurance at a lower premium,the insurance company could deny a request for payment of the death benefit.
A)True B)False
Q3) Independent agents sell insurance for more than one life insurance company.
A)True B)False
Q4) Nonsmokers are insured at lower life insurance premiums than smokers. A)True B)False
Q5) How much additional life insurance is needed on Antonio's life using his former income and the 7-year multiple-of-earnings approach?
A)$562,500
B)$487,500
C)$315,000
D)$240,000
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Chapter 13: Investment Fundamentals
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172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/26530
Sample Questions
Q1) Being risk averse means that you focus primarily on preservation of capital with little desire for current income from your investments.
A)True
B)False
Q2) Ultraconservative investors should invest in instruments such as insured certificates of deposits and Series EE savings bonds.
A)True
B)False
Q3) Generally,older investors should have a larger proportion of their assets in bonds than younger investors.
A)True
B)False
Q4) Generally speaking,there is a trade-off between risk and rewards on investments.
A)True
B)False
Q5) Conservative investors are fairly comfortable during rising and falling market conditions.
A)True
B)False
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Chapter 14: Investing in Stocks and Bonds
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352 Verified Questions
352 Flashcards
Source URL: https://quizplus.com/quiz/26531
Sample Questions
Q1) Hanna has 100 shares of Barnes,Inc.,which she purchased for $23 has been rising recently and is currently selling for $25 a share.She places an order with her broker to sell her Barnes shares when the price reaches $26.50 a share.This is an example of a ____ order.
A)stop
B)limit
C)market
D)month
Q2) Investors generally find it more convenient to keep securities in their street names.
A)True
B)False
Q3) Beta assesses the investment's relationship to its expected performance.
A)True
B)False
Q4) How many shares of QPZ traded on December 12?
A)3,289
B)32,890
C)328,900
D)3,289,000
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Chapter 15: Mutual Funds and Exchange Traded Funds
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/26532
Sample Questions
Q1) Publications that offer comparative performance information about mutual funds generally rank each fund according to one-year and ten-year performance only.
A)True
B)False
Q2) A basis point is one hundredth of one percent.
A)True
B)False
Q3) When you sell your share in a mutual fund,you receive the NAV of the share at its current market price.
A)True
B)False
Q4) Financial risk is reduced through mutual fund investments because the fund is able to diversify investments.
A)True
B)False
Q5) Mutual fund quotations normally include the NAV,YTD Percentage Return,and the fund's expense ratio.
A)True
B)False
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Chapter 16: Real Estate and High-Risk Investments
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112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/26533
Sample Questions
Q1) Projected gross income for an income-producing real estate investment is computed as
A)gross rental income less taxes.
B)gross rental income less depreciation expense.
C)gross rental income less operating expenses.
D)gross rental income less vacancies and unpaid rent.
Q2) Buying ____ is a way to immunize a conservative investor's portfolio against severe price declines because safeguard profits.
A)calls
B)puts
C)futures
D)commodities
Q3) Jodi has a duplex with operating income of $6,000 before depreciation.If the duplex cost $150,000 including $40,000 land value,how much is Jodi's taxable income after depreciation?
A)$0
B)$2,000
C)$3,180
D)$6,000.
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Page 18
Chapter 17: Retirement and Estate Planning
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269 Verified Questions
269 Flashcards
Source URL: https://quizplus.com/quiz/26534
Sample Questions
Q1) Employers usually offer employees retirement plans because the promise of a secure retirement represents an effective way to recruit and keep valuable employees.
A)True
B)False
Q2) The ______ phase is the years during which you need to save for retirement.
A)accumulation
B)distribution
C)early
D)later
Q3) An unmarried domestic partner usually has no legal claim on the probate estate of their deceased partner who died without naming them in the will.
A)True
B)False
Q4) Making tax-deferred deposits into a retirement account means that the funds are
A)taxed when deposited but not taxed when withdrawn.
B)not taxed when deposited but taxed when withdrawn.
C)taxed both when deposited and when withdrawn but not while held in the account.
D)never taxed.
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