Indicate whether the statement is true or false. 1. The support of philanthropic organizations is a material item that contributes to our quality of life.
a. True
b. False 2. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False 3. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False 4. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth
of income.
a. True
b. False 5. The decisions you make in career planning are independent of the decisions you make in financial planning.
a. True
b. False 6. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity
to consume is 80 percent.
a. True
b. False 7. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False 8. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False 9. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False 10. Financial planning can improve your standard of living.
a. True
b. False
Page
1 Chapter 01 PFIN8Test Bank for PFIN8, 8th Edition by Randall Billingsley�������������
������������������
� 11. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
a. True
b. False 12. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False 13. Setting long- and short-term career goals helps in career planning.
a. True
b. False 14. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False 15. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False 16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False 17. Financial planning takes place in a dynamic economic environment created by the actions of the government,
business, and consumers.
a. True
b. False 18. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False 19. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False 20. Geographic factors affect your earning power.
a. True
b. False 21. When you get your first job, you should make a good financial plan that you can follow without making changes
until you retire.
a. True
b. False
Page
2
Name: Class: Date: Chapter 01 PFIN8 22. Most people tend to be more liberal about their expenditures during a recession or crisis.
a. True
b. False 23. Tax plans are closely tied to investment plans.
a. True
b. False 24. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False 25. Living costs are constant throughout the country.
a. True
b. False 26. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False 27. Recessions and financial crises will always result in job loss.
a. True
b. False 28. The need for financial planning declines as your income increases.
a. True
b. False 29. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
b. False 30. Accumulating wealth for later years is called estate planning.
a. True
b. False 31. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False 32. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
Page
3
Name: Class: Date: Chapter 01 PFIN8 33. Marital status affects the income level of individuals.
a. True
b. False 34. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of
the economy.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question. 35. Which of the following is one of the most emotional issues in any relationship, including that with a partner,
parents, or children?
a. Career choices
b. Hobbies
c. Friends
d. Money
e. Retirement planning 36. Which of the following would be considered real property?
a. Stocks
b. Land
c. Cash
d. Bonds
e. Clothing 37. What type of plans are most helpful in making decisions regarding retirement?
a. Personal financial
b. Insurance c. Estate
d. Business
e. Spending 38. The three key groups in the economic environment are:
a. government, regulators, and business.
b. government, consultants, and business.
c. consumers, economists, and business.
d. consumers, business, and managers.
e. government, business, and consumers.
Page
4
Name: Class: Date: Chapter 01 PFIN8
a. True
b. False 2. For employees of large firms, managing employee benefits is an important part of financial planning.
a. True
b. False 3. Commission-based financial planners charge fees based on the complexity of the plan they prepare.
a. True
b. False 4. Short-term planning should include creating and maintaining an emergency fund with at least six months’ worth
of income.
a. True
b. False 5. The decisions you make in career planning are independent of the decisions you make in financial planning.
a. True
b. False 6. Morgan has an annual income of $45,000 and spends $30,000 for current needs. Morgan’s average propensity
to consume is 80 percent.
a. True
b. False 7. Retirement planning includes taking advantage of and managing employer-sponsored benefits.
a. True
b. False 8. Two people with significantly different incomes can have equal average propensities to consume because of
differences in their standard of living.
a. True
b. False 9. In the United States, salaries tend to be higher in the Northeast and West than in the South.
a. True
b. False 10. Financial planning can improve your standard of living.
a. True
b. False
Page
1 Chapter 01 PFIN8Test Bank for PFIN8, 8th Edition by Randall Billingsley�������������
������������������
� 11. Standard of living is defined as the necessities, comforts, and luxuries desired by an individual or a family.
a. True
b. False 12. Fee-only financial planners earn commissions for the products they sell.
a. True
b. False 13. Setting long- and short-term career goals helps in career planning.
a. True
b. False 14. The longer you wait to begin retirement planning, the less you are likely to have in your retirement fund.
a. True
b. False 15. Career plans should not be changed after long- and short-term career goals are set.
a. True
b. False 16. Tangible (physical) assets are earning assets that are held for the returns they promise.
a. True
b. False 17. Financial planning takes place in a dynamic economic environment created by the actions of the government,
business, and consumers.
a. True
b. False 18. You should discuss your financial goals and attitudes toward money with your partner.
a. True
b. False 19. The most effective way to achieve financial objectives is through personal financial planning.
a. True
b. False 20. Geographic factors affect your earning power.
a. True
b. False 21. When you get your first job, you should make a good financial plan that you can follow without making changes
until you retire.
a. True
b. False
Page
2
Name: Class: Date: Chapter 01 PFIN8 22. Most people tend to be more liberal about their expenditures during a recession or crisis.
a. True
b. False 23. Tax plans are closely tied to investment plans.
a. True
b. False 24. The federal government delegates its regulation of economic activity function to businesses and consumers.
a. True
b. False 25. Living costs are constant throughout the country.
a. True
b. False 26. The average propensity to consume is commonly viewed as a key determinant of standard of living.
a. True
b. False 27. Recessions and financial crises will always result in job loss.
a. True
b. False 28. The need for financial planning declines as your income increases.
a. True
b. False 29. It is easy to change your partner’s financial style, so there is no need for financial planning to resolve conflicts
regarding money matters.
a. True
b. False 30. Accumulating wealth for later years is called estate planning.
a. True
b. False 31. Saving $400 for a large, flat-screen TV within the next four months is an example of a short-term goal.
a. True
b. False 32. You should limit your spending to no more than 20 percent more than what you earn.
a. True
b. False
Page
3
Name: Class: Date: Chapter 01 PFIN8 33. Marital status affects the income level of individuals.
a. True
b. False 34. Your purchase, saving, investment, and retirement plans and decisions are not influenced by the present state of
the economy.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question. 35. Which of the following is one of the most emotional issues in any relationship, including that with a partner,
parents, or children?
a. Career choices
b. Hobbies
c. Friends
d. Money
e. Retirement planning 36. Which of the following would be considered real property?
a. Stocks
b. Land
c. Cash
d. Bonds
e. Clothing 37. What type of plans are most helpful in making decisions regarding retirement?
a. Personal financial
b. Insurance c. Estate
d. Business
e. Spending 38. The three key groups in the economic environment are:
a. government, regulators, and business.
b. government, consultants, and business.
c. consumers, economists, and business.
d. consumers, business, and managers.
e. government, business, and consumers.
Page
4
Name: Class: Date: Chapter 01 PFIN8
