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Test Bank
for Introduction to Personal Finance Beginning Your Financial
Journey, 2nd Edition John E. Grable, Lance Palmer
Prose1 Stuvia
,TEST BANK FOR m m
Introduction to Personal Finance Beginning Your Financial Journey, 2nd Edition
m m m m m m m m m
mJohn E. Grable, Lance Palmer
m m m m
Chapter 1-10 m
Chapter 1 m Beginning Your Financial Journey: The Interior Finance Point of View
m m m m m m m m m
1) Which of the following refers to one's ability to understand and use personal finance
m m m m m m m m m m m m m
information?
m
A) Financial risk tolerance. m m
B) Financial well-being. m
C) Financial knowledge. m
D) Financial ability. m
Answer: C
m m
Explanation: Financial knowledge is the ability to understand personal finance information.
m m m m m m m m m m
Knowing who you are, where you want to go, and what skills you currently possess are essential
m m m m m m m m m m m m m m m m m
factors shaping your financial journey.
m m m m m
Diff: 1
m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none
m m m m
AICPA: FC: none
m m m
Min: 1
m m
2) People who believe that what happens to them is based on fate or luck might view their financial
m m m m m m m m m m m m m m m m m
journey as being uncertain. This is an example of
m m m m m m m m m
A) financial risk tolerance. m m
B) financial literacy. m
C) feelings of control. m m
D) financial ability. m
Answer: C
m m
Explanation: Feelings of control is the amount of control you feel you have when making
m m m m m m m m m m m m m m
financial decisions. People who believe that what happens to them is based on luck or fate might
m m m m m m m m m m m m m m m m m
view their financial journey as uncertain.
m m m m m m
Diff: 1
m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none
m m m m
AICPA: FC: none
m m m
Min: 1
m m
1
,3) Internal finance includes your m m m
A) financial knowledge. m
B) financial risk tolerance. m m
C) feelings of control. m m
D) All of the choices are correct.
m m m m m
Answer: D
m m
Explanation: Internal finance is essentially the combination of financial knowledge, financial
m m m m m m m m m m
risk tolerance, and feelings of control.
m m m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
4) Which of the following refers to your confidence and peace of mind regarding your financial
m m m m m m m m m m m m m m
situation?
m
A) Financial literacy. m
B) Financial well-being. m
C) Financial knowledge. m
D) Financial ability. m
Answer: B
m m
Explanation: Financial well-being is your confidence and peace of mind regarding your financial
m m m m m m m m m m m m
situation. Your financial well-being will increase as you apply your financial knowledge, develop
m m m m m m m m m m m m m
skills, and organize your finances to achieve your personal goals.
m m m m m m m m m m
Diff: 2 m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
5) In addition to financial knowledge, which of the following is important in shaping your view of
m m m m m m m m m m m m m m m
the financial world?
m m m
A) Financial risk tolerance, only. m m m
B) Feelings of control, only. m m m
C) Financial well-being only. m m
D) Financial risk tolerance and feelings of control.
m m m m m m
Answer: D
m m
Explanation: Our financial decisions can be based on a biased view of the financial world, which
m m m m m m m m m m m m m m m
is based on the combination of our financial knowledge, financial risk tolerance, and feelings of
m m m m m m m m m m m m m m m m
control.
m
Diff: 2 m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
2
, 6) Which of the following refers to your willingness to engage in financial endeavors that have
m m m m m m m m m m m m m m
uncertain outcomes?
m m
A) Financial literacy. m
B) Financial risk tolerance. m m
C) Financial knowledge. m
D) Financial ability. m
Answer: B
m m
Explanation: Your financial risk tolerance is your willingness to engage in financial endeavors
m m m m m m m m m m m m
that have uncertain outcomes.
m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
7) Which of the following is measured by adding up how much the United States produces in
m m m m m m m m m m m m m m m
goods and services in a year?
m m m m m m
A) Gross domestic product. m m
B) The cost of goods sold.
m m m m
C) Financial literacy. m
D) Financial risk tolerance. m m
Answer: A
m m
Explanation: Gross domestic product (GDP) is measured by adding up how much a country
m m m m m m m m m m m m m
produces in goods and services in a year.
m m m m m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
8) How much of GDP consists of consumer spending?
m m m m m m m
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D m m
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearly two-thirds (66%) of GDP
m m m m m m m m m m m m m m
consists of consumer spending.
m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
3
Test Bank
for Introduction to Personal Finance Beginning Your Financial
Journey, 2nd Edition John E. Grable, Lance Palmer
Prose1 Stuvia
,TEST BANK FOR m m
Introduction to Personal Finance Beginning Your Financial Journey, 2nd Edition
m m m m m m m m m
mJohn E. Grable, Lance Palmer
m m m m
Chapter 1-10 m
Chapter 1 m Beginning Your Financial Journey: The Interior Finance Point of View
m m m m m m m m m
1) Which of the following refers to one's ability to understand and use personal finance
m m m m m m m m m m m m m
information?
m
A) Financial risk tolerance. m m
B) Financial well-being. m
C) Financial knowledge. m
D) Financial ability. m
Answer: C
m m
Explanation: Financial knowledge is the ability to understand personal finance information.
m m m m m m m m m m
Knowing who you are, where you want to go, and what skills you currently possess are essential
m m m m m m m m m m m m m m m m m
factors shaping your financial journey.
m m m m m
Diff: 1
m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none
m m m m
AICPA: FC: none
m m m
Min: 1
m m
2) People who believe that what happens to them is based on fate or luck might view their financial
m m m m m m m m m m m m m m m m m
journey as being uncertain. This is an example of
m m m m m m m m m
A) financial risk tolerance. m m
B) financial literacy. m
C) feelings of control. m m
D) financial ability. m
Answer: C
m m
Explanation: Feelings of control is the amount of control you feel you have when making
m m m m m m m m m m m m m m
financial decisions. People who believe that what happens to them is based on luck or fate might
m m m m m m m m m m m m m m m m m
view their financial journey as uncertain.
m m m m m m
Diff: 1
m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none
m m m m
AICPA: FC: none
m m m
Min: 1
m m
1
,3) Internal finance includes your m m m
A) financial knowledge. m
B) financial risk tolerance. m m
C) feelings of control. m m
D) All of the choices are correct.
m m m m m
Answer: D
m m
Explanation: Internal finance is essentially the combination of financial knowledge, financial
m m m m m m m m m m
risk tolerance, and feelings of control.
m m m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
4) Which of the following refers to your confidence and peace of mind regarding your financial
m m m m m m m m m m m m m m
situation?
m
A) Financial literacy. m
B) Financial well-being. m
C) Financial knowledge. m
D) Financial ability. m
Answer: B
m m
Explanation: Financial well-being is your confidence and peace of mind regarding your financial
m m m m m m m m m m m m
situation. Your financial well-being will increase as you apply your financial knowledge, develop
m m m m m m m m m m m m m
skills, and organize your finances to achieve your personal goals.
m m m m m m m m m m
Diff: 2 m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
5) In addition to financial knowledge, which of the following is important in shaping your view of
m m m m m m m m m m m m m m m
the financial world?
m m m
A) Financial risk tolerance, only. m m m
B) Feelings of control, only. m m m
C) Financial well-being only. m m
D) Financial risk tolerance and feelings of control.
m m m m m m
Answer: D
m m
Explanation: Our financial decisions can be based on a biased view of the financial world, which
m m m m m m m m m m m m m m m
is based on the combination of our financial knowledge, financial risk tolerance, and feelings of
m m m m m m m m m m m m m m m m
control.
m
Diff: 2 m
LO: 1.1, Section 1.1
m m m
Bloom: C
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
2
, 6) Which of the following refers to your willingness to engage in financial endeavors that have
m m m m m m m m m m m m m m
uncertain outcomes?
m m
A) Financial literacy. m
B) Financial risk tolerance. m m
C) Financial knowledge. m
D) Financial ability. m
Answer: B
m m
Explanation: Your financial risk tolerance is your willingness to engage in financial endeavors
m m m m m m m m m m m m
that have uncertain outcomes.
m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
7) Which of the following is measured by adding up how much the United States produces in
m m m m m m m m m m m m m m m
goods and services in a year?
m m m m m m
A) Gross domestic product. m m
B) The cost of goods sold.
m m m m
C) Financial literacy. m
D) Financial risk tolerance. m m
Answer: A
m m
Explanation: Gross domestic product (GDP) is measured by adding up how much a country
m m m m m m m m m m m m m
produces in goods and services in a year.
m m m m m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
8) How much of GDP consists of consumer spending?
m m m m m m m
A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D m m
Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearly two-thirds (66%) of GDP
m m m m m m m m m m m m m m
consists of consumer spending.
m m m m
Diff: 1 m
LO: 1.1, Section 1.1
m m m
Bloom: K
m m
AACSB / IMA: none; none m m m m
AICPA: FC: none
m m m
Min: 1 m m
3
