FULL TEST BANK For Introduction to Personal Finance: Beginning Your Financial Journey 2nd Edition by John E. Grable Latest Update Graded A+

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,TEST BANK FOR ff ff



Introduction to Personal Finance Beginning Your Financial Journey, 2nd Edition
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John E. Grable, Lance Palmer
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Chapter 1-10 ff




Chapter 1 ff Beginning Your Financial Journey: The Interior Finance Point of View
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1) Which of the following refers to one's ability to understand and use personal
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finance information?
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A) Financial risk tolerance. ff ff


B) Financial well-being. ff


C) Financial knowledge. ff


D) Financial ability. ff


Answer: C
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Explanation: Financial knowledge is the ability to understand personal finance information.
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Knowing who you are, where you want to go, and what skills you currently possess are essential
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factors shaping your financial journey.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: K
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




2) People who believe that what happens to them is based on fate or luck might view their financial
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journey as being uncertain. This is an example of
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A) financial risk tolerance. ff ff


B) financial literacy. ff


C) feelings of control. ff ff


D) financial ability. ff


Answer: C
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Explanation: Feelings of control is the amount of control you feel you have when making
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financial decisions. People who believe that what happens to them is based on luck or fate
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might view their financial journey as uncertain.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: C
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




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,3) Internal finance includes your ff ff ff


A) financial knowledge. ff


B) financial risk tolerance. ff ff


C) feelings of control. ff ff


D) All of the choices are correct.
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Answer: D
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Explanation: Internal finance is essentially the combination of financial knowledge, financial
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risk tolerance, and feelings of control.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: K
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




4) Which of the following refers to your confidence and peace of mind regarding your
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financial situation?
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A) Financial literacy. ff


B) Financial well-being. ff


C) Financial knowledge. ff


D) Financial ability. ff


Answer: B
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Explanation: Financial well-being is your confidence and peace of mind regarding your
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financial situation. Your financial well-being will increase as you apply your financial
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knowledge, develop skills, and organize your finances to achieve your personal goals.
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Diff: 2 ff


LO: 1.1, Section 1.1
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Bloom: C
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




5) In addition to financial knowledge, which of the following is important in shaping your view of
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the financial world?
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A) Financial risk tolerance, only. ff ff ff


B) Feelings of control, only. ff ff ff


C) Financial well-being only. ff ff


D) Financial risk tolerance and feelings of control. ff ff ff ff ff ff


Answer: D
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Explanation: Our financial decisions can be based on a biased view of the financial world,
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which is based on the combination of our financial knowledge, financial risk tolerance, and
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feelings of control.
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Diff: 2 ff


LO: 1.1, Section
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1.1 Bloom: C
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




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, 6) Which of the following refers to your willingness to engage in financial endeavors that
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have uncertain outcomes?
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A) Financial literacy. ff


B) Financial risk tolerance. ff ff


C) Financial knowledge. ff


D) Financial ability. ff


Answer: B
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Explanation: Your financial risk tolerance is your willingness to engage in financial
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endeavors that have uncertain outcomes.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: K
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




7) Which of the following is measured by adding up how much the United States produces
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in goods and services in a year?
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A) Gross domestic product. ff ff


B) The cost of goods sold. ff ff ff ff


C) Financial literacy. ff


D) Financial risk tolerance. ff ff


Answer: A
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Explanation: Gross domestic product (GDP) is measured by adding up how much a country
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produces in goods and services in a year.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: K
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




8) How much of GDP consists of consumer spending?
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A) 46%.
B) 50%.
C) 60%.
D) 66%.
Answer: D f f f f


Explanation: In 2020, the U.S. GDP was $19.80 trillion and nearly two-thirds (66%) of GDP
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consists of consumer spending.
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Diff: 1 ff


LO: 1.1, Section
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1.1 Bloom: K
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AACSB / IMA: none; ff ff f f


none AICPA: FC: none
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Min: 1 f f f f




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