Test Bank for Focus on Personal Finance 12th Edition by Jack
Kapoor, Les Dlabay, Robert J. Hughes & Melissa Hart ISBN-13
978-1259720680
Chapter 1-19 [Answers are at the End of Each Chapter]
Chapter 01
Increased demand for a product or service will usually result in lower prices for the item. True
False
Inflation reduces the buying power of the dollar. True False
Lenders benefit more than borrowers in times of high inflation. True False
Economics is the study of using money to achieve financial goals. True False
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A decrease in the demand for a product or service may result in unemployment from staff
reduction. True False
Developing and using a budget is part of the "obtaining" component of financial planning. True
False
A financial plan is another name for a budget. True False
Planning to buy a car is an example of an intangible goal. True False
Opportunity costs refer to what a person gives up when making a choice. True False
Personal opportunity costs refer to time, effort, and health that are given up when a decision is
made. True False
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Time value of money refers to changes in consumer spending when inflation occurs. True False
Interest on savings is calculated by multiplying the principal amount times the opportunity cost
times the annual interest rate.
True False
Present value is also referred to as compounding. True False
Opportunity costs may be viewed only in terms of financial resources. True False
Gross Domestic Product (GDP) measures the total value of goods and services produced within a
country's borders, excluding items produced with foreign resources.
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True False
Trade balance is defined as the difference between a country's exports and its imports. True
False
The main goal of personal financial planning is managing your money to:
save and invest for future needs.
reduce a person's tax liability.
achieve personal economic satisfaction.
spend to achieve financial objectives.
save, spend, and borrow based on current needs.
Higher prices are likely to result from:
lower demand by consumers.
increased production by business.
lower interest rates.
increased demand by consumers without increased supply.
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