Consumer Economics
Mock Exam
Course Introduction
Consumer Economics explores the decision-making processes of individuals and households as they navigate the marketplace. The course examines how consumers allocate limited resources among various goods and services, the influences of psychological, social, and economic factors on consumer behavior, and the impact of governmental policies on consumer welfare. Topics include budgeting, credit and debt management, savings and investment strategies, consumer rights and responsibilities, and the broader implications of consumer choices on the economy. Students will develop practical skills for making informed financial decisions and understanding the role of consumers in the broader economic system.
Recommended Textbook
Personal Finance 13th Edition by E.
Thomas Garman
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17 Chapters
3061 Verified Questions
3061 Flashcards
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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) The most recognized professional designation held by financial planners is the
A)NAPFA Registered Financial Advisor (NRFA).
B)Certified Financial Planner (CFP).
C)Certified Public Accountant (CPA).
D)Accredited Financial Counselor (AFC). Answer: B
Q2) A match is an employer contribution according to the amount the employee contributes.
A)True
B)False Answer: True
Q3) The consumer price index is a broad measure of changes in the prices of all goods and services purchased for consumption by urban households.
A)True
B)False Answer: True
Q4) The index of leading economic indicators includes eight components of growth. A)True
B)False Answer: False
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Chapter 2: Career Planning
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) The skills employers want the most include all of the following except
A)communication skills.
B)analytical skills.
C)overconfidence.
D)high-energy.
Answer: C
Q2) Nonsalary benefits are forms of compensation that result in the employee not having to pay out-of-pocket money for certain expenses: for example,tuition reimbursement,paid sick leave,and child care.
A)True
B)False
Answer: True
Q3) ____ résumés emphasize your career-related experiences.
A)Chronological format
B)Skills format
C)Normal format
D)Functional format
Answer: D
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Chapter 3: Financial Statements,tools,and Budgets
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Financial planning begins by acquiring a good job that provides a person with enough extra income to manage.
A)True
B)False
Answer: False
Q2) Financial planning focuses primarily on spending wisely.
A)True
B)False
Answer: False
Q3) The three broad areas of financial plans include financial plans for A)spending.
B)risk management.
C)capital accumulation.
D)All of these.
Answer: D
Q4) Effective financial goals should be stated explicitly in terms of purpose,dollar amounts,and projected date for achievement.
A)True
B)False
Answer: True
Page 5
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Chapter 4: Managing Income Taxes
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) Household income is modified gross income increased by any excluded foreign income and tax-exempt interest.
A)True
B)False
Q2) Irma and Dave Cedeno have a potential $2,000 capital gain on stock they have owned 11 months.They are in the 28 percent marginal tax bracket.How much longer would they have to hold this stock to reduce the tax liability on this gain?
A)13 months and 1 day
B)12 months and 1 day
C)4 months and 1 day
D)1 month and 1 day
Q3) Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the ____ for the additional tax savings of ____.
A)standard deduction; $700
B)standard deduction; $196
C)itemized deduction; $700
D)itemized deduction; $196
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Chapter 5: Managing Checking and Savings Accounts
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181 Verified Questions
181 Flashcards
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Sample Questions
Q1) It is not required for an ATM or a POS terminal to provide a written receipt.
A)True
B)False
Q2) The best banking account PIN numbers and passwords are those that are easy to remember.
A)True
B)False
Q3) Your bank will regularly (usually monthly) provide a compilation of your recent account activity,which is called a(n)
A)receipt.
B)periodic statement.
C)reconciliation.
D)account ledger.
Q4) A personal identification number is not needed for which of the following forms of electronic funds transfers?
A)ATM transactions
B)Direct deposits
C)Debit cards
D)Point-of-sale transactions
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Chapter 6: Building and Maintaining Good Credit
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Chapter 7 of the Bankruptcy Act is permitted when it would be highly unlikely that substantial repayment could ever be made.
A)True
B)False
Q2) Credit cannot be used to own expensive products sooner.
A)True
B)False
Q3) Advantages of credit use include increased protection against rip-offs and frauds.
A)True
B)False
Q4) The Equal Credit Opportunity Act prohibits the rejection of credit due to a poor credit history.
A)True
B)False
Q5) Bankruptcy remains on one's credit record for seven years.
A)True
B)False
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Page 8
Chapter 7: Credit Cards and Consumer Loans
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166 Verified Questions
166 Flashcards
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Sample Questions
Q1) A borrower who has failed to make a payment of principal or interest when due or meet any other requirement of a credit agreement is said to be in foreclosure.
A)True
B)False
Q2) Which of the following is an example of an unsecured debt?
A)auto loan
B)second mortgage
C)signature loan
D)first mortgage
Q3) Which type of credit card is issued through retail sellers and businesses?
A)Travel and entertainment credit cards
B)Bank credit cards
C)Retail credit cards
D)Prestige credit cards
Q4) The contract supporting a credit card account is called a(n)
A)promissory note.
B)credit card agreement.
C)indenture.
D)chattel note.
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Chapter 8: Vehicles and Other Major Purchases
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145 Verified Questions
145 Flashcards
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Sample Questions
Q1) A common definition of a lemon is a vehicle that has been in for repairs at least two times for the same problem in the first year after purchase.
A)True
B)False
Q2) The product that is the best buy will be the one with the
A)lowest price without regard for quality.
B)lowest quality without regard for price.
C)highest quality at a reasonable price.
D)acceptable quality at a fair price.
Q3) ____ should be completed before interacting with sellers.
A)Distinguishing between needs and wants
B)Preshopping research
C)Fitting the budget
D)(all of these)
Q4) Service contracts are becoming more prevalent in the new car market because they are generally a good value for consumers.
A)True
B)False
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Chapter 9: Obtaining Affordable Housing
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217 Verified Questions
217 Flashcards
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Sample Questions
Q1) The process of gradually paying off a mortgage loan though a series of periodic payments to the lender is called amortization.
A)True
B)False
Q2) A prospective borrower must be given a good-faith estimate of all specific closing costs when they apply for a mortgage.
A)True
B)False
Q3) The process in which the lender sues the borrower to prove default and asks the court to order the sale of the property to pay the debt is called foreclosure.
A)True
B)False
Q4) A mortgage loan with a fixed rate of interest and a fixed payment for principal and interest that is available from a financial institution is called
A)an assumable mortgage.
B)a conventional mortgage.
C)seller financing.
D)a lender buy-down mortgage.
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Chapter 10: Managing Property and Liability Risk
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209 Verified Questions
209 Flashcards
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Sample Questions
Q1) Financial responsibility laws require owners to prove they have enough resources to pay for damages resulting from a car accident.
A)True
B)False
Q2) The first step in creating an insurance contract is A)underwriting.
B)determining a premium.
C)completing an application.
D)issuing the policy.
Q3) All insurance policies list the perils that will be covered by the policy.
A)True
B)False
Q4) Andy and Ann live in a home with a replacement value of $164,000 and a market value of $175,000.In most cases,what is the minimum amount of homeowner's coverage they must carry to meet the replacement-cost requirement?
A)$140,000
B)$175,000
C)$164,000
D)$131,200
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Chapter 11: Managing Health Expenses
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) A group health care plan is sold collectively to an entire group of persons rather than individuals.
A)True
B)False
Q2) The maximum annual deposit into a health savings account is ____ for an individual and ____ for a family.
A)$1,000 / $5,000
B)$2,000 / $5,000
C)$3,300 / $6,550
D)$5,000 / $10,000
Q3) Which type of insurance provides reimbursement for costs associated with custodial care in a nursing facility or at home?
A)Medicare
B)Disability income insurance
C)HMOs
D)Long-term care insurance
Q4) Medicaid is a health care program for low income individuals.
A)True
B)False
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Chapter 12: Life Insurance Planning
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215 Verified Questions
215 Flashcards
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Sample Questions
Q1) 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
Q2) Modified life insurance is a form of life insurance for which the insurance company charges reduced premiums in the early years and higher premiums thereafter.
A)True
B)False
Q3) Which of the following is not characteristic of a cash-value life insurance policy?
A)The annual premiums remain constant.
B)The beneficiary receives the sum of the face amount and the cash value.
C)The policyholder can cancel the policy and receive the cash value.
D)The policyholder can borrow from the cash value.
Q4) Readjustment-period needs typically last about one month.
A)True
B)False
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Chapter 13: Investment Fundamentals
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) Investment risk is the possibility that an investment may lose value.
A)True
B)False
Q2) Total risk comprises random risk and market risk.
A)True
B)False
Q3) Most returns earned are derived from owning the right asset categories rather than specific investments.
A)True
B)False
Q4) The amount of risk premium desired by most investors is in the range of _____ percent.
A)1-2
B)3-6
C)7-8
D)9-12
Q5) The last step in the investment planning process is to decide on what actions to take.
A)True
B)False
Page 15
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Chapter 14: Investing in Stocks and Bonds
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352 Verified Questions
352 Flashcards
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Sample Questions
Q1) Buying cyclical stocks is a defensive investment move
A)True
B)False
Q2) The current yield on a bond can be either higher or lower than its coupon rate of return.
A)True
B)False
Q3) ____ analysis is a method of evaluating securities that focuses on statistics generated by market activity,such as past prices and sales volume.
A)fundamental
B)value
C)technical
D)Speculative
Q4) The market price of preferred stock is sensitive to interest rates.
A)True
B)False
Q5) I bonds pay an earnings rate that is a combination of two rates.
A)True
B)False
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Chapter 15: Mutual Funds and Exchange Traded Funds
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176 Verified Questions
176 Flashcards
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Sample Questions
Q1) The collection of securities and other investments owned by a mutual fund is called a(n)
A)investment company.
B)portfolio.
C)mutual fund family.
D)prospectus.
Q2) A redemption charge is designed to discourage frequent trading in and out of particular mutual funds.
A)True
B)False
Q3) A closed-end investment company issues a limited and fixed number of shares and does not buy them back.
A)True
B)False
Q4) Mutual fund quotations normally include the NAV,YTD Percentage Return,and the fund's expense ratio.
A)True
B)False
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Page 17
Chapter 16: Real Estate and High-Risk Investments
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) A disadvantage of real estate investment is
A)financial risk.
B)large initial investment.
C)illiquidity.
D)All of these.
Q2) Capital gains on real estate are realized through price depreciation.
A)True
B)False
Q3) The writer of a put may incur a loss when the market price of an optioned asset rises above the striking price.
A)True
B)False
Q4) Using borrowed funds to increase the rate of return on an investment is called leverage.
A)True
B)False
Q5) People who pursue options and futures investments should have a moderate-to-aggressive investment philosophy.
A)True
B)False
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Chapter 17: Retirement and Estate Planning
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269 Verified Questions
269 Flashcards
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Sample Questions
Q1) The Monte Carlo simulation estimates how much you need to save if your investments performed better or worse than expected.
A)True
B)False
Q2) Which tax is assessed by the federal government against the estate of deceased person before it is passed to heirs?
A)Estate tax
B)Inheritance tax
C)Excise tax
D)Flat tax
Q3) The Pension Benefit Guarantee Corporation provides an insurance program that guarantees certain retirement benefits for eligible retirees.
A)True
B)False
Q4) An employee stock-ownership plan allows the employees to regularly purchase shares of stock in the company at discounted prices.
A)True
B)False
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Page 19