Busn380 Homework Help

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True / False Questions
 

1.  Increased demand for a product or service will usually result in lower prices for the item.  FALSE

2.  Inflation reduces the buying power of money.  TRUE

3.  When prices are increasing at a rate of 6 percent, the cost of products would double in about 12 years.  TRUE

4. A decrease in the demand for a product or service may result in a decrease in wages for people producing that item.  TRUE

5. A financial plan is another name for a budget. FALSE

6. Short-term goals are usually achieved within the next year or so. TRUE

7. Opportunity costs refer to time, money, and other resources that are given up when a decision is made.  TRUE

8. Risks associated with most financial decisions are fairly easy to measure.  FALSE

9. The financial planning process is complete once you implement your financial plan.  FALSE

Multiple Choice Questions

10. Higher prices are likely to result from: 
A. lower demand by consumers.
B. increased production by business.
C. lower interest rates.
D. increased spending by consumers without increased production. E. an increase in the supply of a product.

11. With an inflation rate of 9 percent, prices would double in about ___________ years.  A. 4
B. 6
C. 8
D. 10
E. 12

12. Increased consumer spending will usually cause: 
A. lower consumer prices.
B. reduced employment levels.
C. lower tax revenues.
D. lower interest rates.
E. higher employment levels.
 
13. The main economic influence that determines prices is:  A. the stock market.
B. interest rates.
C. employment.
D. government spending.
E. supply and demand.

14. As Jean Tyler plans to set aside funds for her young children's college education, she is setting a(n) ____________ goal.  A. intermediate
B. long-term
C. short-term
D. intangible
E. durable

15. Brad Opper has a goal of "saving $50 a month for vacation." Brad's goal lacks:  A. measurable terms.
B. a realistic perspective.
C. specific terms.
D. the type of action to be taken.
E. a time frame.

16. Opportunity cost refers to: 
A. money needed for major consumer purchases.
B. what a person gives up by making a choice.
C. the amount paid for taxes when a purchase is made.
D. current interest rates.
E. evaluating different alternatives for financial decisions.

17.If a person deposited $50 a month for 6 years earning 8 percent, this would involve what type of computation?  A. simple interest
B. future value of a single amount
C. future value of a series of deposits
D. present value of a single amount
E. present value of a series of deposits
 

18. Which type of computation would a person use to determine current value of a desired amount for the future?  A. simple interest
B. future value of a single amount
C. future value of a series of deposits
D. present value of a single amount
E. present value of a series of deposits

19.  If inflation is increasing at 3 percent per year, and your salary increases at the same rate, how long will it take your salary to double?  A. 30 years
B. 24 years
C. 18 years
D. 12 years
E. 6 years
 

20. When prices are increasing at a rate of 6 percent, the cost of products would double in about how many years?  A. 7.2 years
B. 10 years
C. 6 years
D. 12 years
E. 18 years

 

21. If you put $1,000 in a saving account and make no further deposits, what type of calculation would provide you with the value of the account in 20 years?  A. future value of a single amount
B. simple interest
C. present value of a single amount
D. present value of a series of deposits
E. future value of a series of deposits

22. The financial planning process concludes with efforts to  A. develop financial goals.
B. create a financial plan of action.
C. analyze your current personal and financial situation.
D. review the financial plan.
E. review and revise your actions.

23. A family spends $40,000 on living...
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