Foundations in Personal Finance- Pre/Post Test Questions with Correct Solved Solutions.

Which of the following statements best explains why income alone does not determine wealth? - Answer How much money a person makes does not dictate his or her spending and saving behavior. The widespread financial insecurity of Americans is primarily because: - Answer The saving rate of Americans is low and many borrow in order to spend more than they earn. Which of the following is not one of the three basic reasons for saving money? - Answer Have money available to lend to friends This principle suggests that a certain amount of money today has a different buying power than the same amount of money in the future. This is due to both the opportunity to earn interest on the money and because inflation will drive prices up, thereby changing the "value" of the money. - Answer Time value of money Rent is a: - Answer Fixed expense Which of the following account records would have the most current balances? - Answer Your own account register A credit score is intended to measure: - Answer The risk of your not repaying debt. Which of the following things cannot be done with a debit card but can be done with a credit card? - Answer Go into debt Which of the following statements is false? - Answer All high-paying careers require a four-year college degree. Your choices as a consumer have no impact on the larger social environment. When a company places an ad and offers no interest on your purchase for three years: - Answer The cost of the financing is built into the price of the item. What concept is best explained by the statement, "Money spent here cannot be spent there"? - Answer Opportunity cost