,Personal Finance, 13e (Kapoor)
Chapter 1 Personal Finance Basics and the Time Value of Money
1) Increased demand for a product or service will usually result in lower prices for the item.
Answer: FALSE
Difficulty: 1 Easy
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
2) Inflation reduces the buying power of the dollar.
Answer: TRUE
Difficulty: 1 Easy
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
3) Lenders benefit more than borrowers in times of high inflation.
Answer: FALSE
Difficulty: 3 Hard
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
4) Economics is the study of using money to achieve financial goals.
Answer: FALSE
Difficulty: 2 Medium
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
1
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
,5) Reduced spending causes unemployment from staff reduction.
Answer: TRUE
Difficulty: 2 Medium
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
6) A financial plan is another name for a budget.
Answer: FALSE
Difficulty: 2 Medium
Topic: Financial plan development
Learning Objective: 01-05 Identify strategies for achieving personal financial goals for different
life situations.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
7) Developing and using a budget is part of the "obtaining" component of financial planning.
Answer: FALSE
Difficulty: 1 Easy
Topic: Components of Financial Planning
Learning Objective: 01-05 Identify strategies for achieving personal financial goals for different
life situations.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
8) Planning to buy a car is an example of an intangible-purchase goal.
Answer: FALSE
Difficulty: 2 Medium
Topic: Financial Goals
Learning Objective: 01-03 Develop personal financial goals.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
2
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
, 9) Opportunity costs refer to what a person gives up when making a choice.
Answer: TRUE
Difficulty: 2 Medium
Topic: Opportunity Costs
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
10) Personal opportunity costs refer to time, effort, and health that are given up when a decision
is made.
Answer: TRUE
Difficulty: 2 Medium
Topic: Opportunity Costs
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
11) Time value of money refers to changes in consumer spending when inflation occurs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Time value of money - interest rates and inflation
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
12) Interest on savings is calculated by multiplying the principal amount times the opportunity
cost times the annual interest rate.
Answer: FALSE
Difficulty: 3 Hard
Topic: Time value of money - interest rates and inflation
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
3
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
Chapter 1 Personal Finance Basics and the Time Value of Money
1) Increased demand for a product or service will usually result in lower prices for the item.
Answer: FALSE
Difficulty: 1 Easy
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
2) Inflation reduces the buying power of the dollar.
Answer: TRUE
Difficulty: 1 Easy
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
3) Lenders benefit more than borrowers in times of high inflation.
Answer: FALSE
Difficulty: 3 Hard
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
4) Economics is the study of using money to achieve financial goals.
Answer: FALSE
Difficulty: 2 Medium
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
1
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
,5) Reduced spending causes unemployment from staff reduction.
Answer: TRUE
Difficulty: 2 Medium
Topic: Economic conditions and factors
Learning Objective: 01-02 Assess personal and economic factors that influence personal
financial planning.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
6) A financial plan is another name for a budget.
Answer: FALSE
Difficulty: 2 Medium
Topic: Financial plan development
Learning Objective: 01-05 Identify strategies for achieving personal financial goals for different
life situations.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
7) Developing and using a budget is part of the "obtaining" component of financial planning.
Answer: FALSE
Difficulty: 1 Easy
Topic: Components of Financial Planning
Learning Objective: 01-05 Identify strategies for achieving personal financial goals for different
life situations.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
8) Planning to buy a car is an example of an intangible-purchase goal.
Answer: FALSE
Difficulty: 2 Medium
Topic: Financial Goals
Learning Objective: 01-03 Develop personal financial goals.
Bloom's: Understand
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
2
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
, 9) Opportunity costs refer to what a person gives up when making a choice.
Answer: TRUE
Difficulty: 2 Medium
Topic: Opportunity Costs
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
10) Personal opportunity costs refer to time, effort, and health that are given up when a decision
is made.
Answer: TRUE
Difficulty: 2 Medium
Topic: Opportunity Costs
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
11) Time value of money refers to changes in consumer spending when inflation occurs.
Answer: FALSE
Difficulty: 2 Medium
Topic: Time value of money - interest rates and inflation
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
12) Interest on savings is calculated by multiplying the principal amount times the opportunity
cost times the annual interest rate.
Answer: FALSE
Difficulty: 3 Hard
Topic: Time value of money - interest rates and inflation
Learning Objective: 01-04 Calculate time value of money to analyze personal financial
decisions.
Bloom's: Remember
Accessibility: Keyboard Navigation; Screen Reader Compatible
Gradable: automatic
3
Copyright © 2020 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written onsent of McGraw-Hill Education.
