Garman/ Fox’s Personal Finance 14th Edition solution Test Questions & Answers/ 100% Success/ Already Graded A+ 2025/2026

Garman/ Fox’s Personal Finance 14th Edition solution Test Questions & Answers/ 100% Success/ Already Graded A+ 2025/2026 Personal financial management is important because it - ANS-makes personal financial goals easier to achieve The average propensity to consume refers to the - ANS-percentage of income spent for current consumption Money is - ANS-a medium of change Government places controls on the personal financial environment by use of - ANS-taxation and regulation Inflation refers to - ANS-rising prices A strong economy leads to - ANS-higher employment Sam and Lele are in their late 20s with 3 young children. Their most important financial planning concerns would probably include all of the following except - ANS-retirement and estate planning When setting financial goals, one should typically start by setting - ANS-long-term goals Ideally, retirement planning should begin - ANS-none of these 8Typically, people with the lowest incomes tend to be - ANS-very young, or very old The financial crisis of 2008 and 2009 is best characterized as a _____________ - ANS-Recession The amount of money we set aside for future consumption will be determined by - ANS-how much we currently earn and spend Employee benefits may include - ANS-Disability insurance, life insurance, and health insurance Tax planning is most commonly done to - ANS-minimize taxes A personal computer could not be used to - ANS-make financial decisions Professional financial planners - ANS-help by establishing personal financial goals Martha is 80 and has a very high net worth. Her most important financial concern is probably her - ANS-estate The main reason to do personal financial planning is to - ANS-maximize overall utility Estate planning involves - ANS-considering how your wealth can be most effectively passed on to heirs The three key groups in the economic environment are - ANS-government, consumers, and business The balance sheet describes a family's wealth - ANS-at a certain point in time Your __________ is an example of a liquid asset - ANS-checking account Sam and his wife Ann purchased a home in Lubbock, Texas in 1980 for $100,000. Their original home mortgage was for $90,000. The house has a current market value of $175,000 and a replacement value of $200,000. They still owe $55,000 on their home mortgage. Sam and Sally are now constructing their balance sheet. How should their home be reflected on their current personal balance sheet? - ANS-$175,000 asset and $55,000 liability _______ would be an example of a periodic expense. - ANS-Vacation The need for budget adjustments is indicated when - ANS-account deficits are more than surpluses Net worth is highest at about what age? - ANS-65 Theresa invested $5,000 in an account she expects will earn 7% annually. Approximately how many years will it take for the account to double in value? - ANS-10 What can you do if your budget shows an annual budget deficit? - ANS-Increase Income. Borrow enough to meet the total budget shortfall for the year. Liquidate enough savings and investments to meet the total budget shortfall for the year. Cut low-priority expenses from the budget A savings ratio expresses the - ANS-Percentage of after-tax income saved If your statement of income and expenditures shows a deficit, you may have - ANS-increased your debts. You would not include _______ on an income and expenditures statement. - ANS-the value of your stock portfolio You are solvent if your - ANS-total assets exceed total liabilities. The income statement includes - ANS-income, expenditures, surplus or deficit Dual-income families often face - ANS-increased complexity in their money management systems. Which of the following is among the four categories accounting for almost three-quarters of consumer spending? - ANS-Personal insurance and pensions Your investment advisor wants you to purchase an annuity that will pay you $25,000 per year for 10 years. If you require a 7% return, what is the most you should pay for this investment? - ANS-$175,590 Mike and Teresa Garza have a monthly gross income of $5,000, but they pay $1,000 per month in taxes. They also pay $2,000 per month in various loan payments. What is their debt service ratio? - ANS-40% Using balance sheet information, the ________ ratio indicates your ability to meet current debt payments. - ANS-liquidity The Wilson family's short-term goals might include - ANS-setting up an emergency fund of three months' income The income statement is specific to - ANS-a specific period of time. The federal government gets the majority of its revenue from the _________ tax. - ANS-income The federal income tax is - ANS-progressive Your take-home pay is what you are left with after subtracting withholdings from your - ANS-gross earnings. Ben and Jack both earned $60,000 this year. Ben (age 30) is married with two children, and Jack (age 68) is single with no dependents. Which of the following is true regarding the amount of Social Security taxes they will pay? - ANS-They will pay the same amount of Social Security taxes You purchased and lived in your home 8 years. Now you have received an excellent promotion, but you will have to sell your home and move to another community. The capital gains on the home sold will - ANS-not be taxable because the home was your principal residence Buddy Slaton has only one itemized deduction item, the $3,000 he gave to his church. His standard deduction this year is $5,450, and he is in the 15% marginal tax bracket. How much will his contribution to the church save Buddy in taxes this year? - ANS-$0 Typically, state governments get most of their tax revenue from - ANS-sales taxes and income taxes Mandi and Thomas were married and had one child, age 7. Mandi died in 2011 leaving Thomas a single parent. In 2012, the most favorable filing status for Thomas will be - ANS-qualifying widow continues...