Introduction to Business

Chapter 28: Managing Personal Finances

Chapter Practice Review Quizzes

1
Which is the best definition of personal financial planning?
A)spending, saving, and investing money to enjoy life and achieve financial security
B)listing ways to achieve your short-term and long-term financial goals
C)thinking about your attitudes toward money
D)using available sources of financial information
2
Which term refers to things you want to accomplish?
A)budgets
B)risks
C)expenses
D)goals
3
Which is NOT one of the six steps of financial planning?
A)Develop your financial goals.
B)Apply for credit.
C)Evaluate alternatives.
D)Implement a financial plan of action.
4
Which term refers to the risk of a general increase in the cost of goods and services?
A)inflation risk
B)interest rate risk
C)liquidity risk
D)income risk
5
Which term refers to the risk that you may have to withdraw your savings or investments?
A)inflation risk
B)interest rate risk
C)liquidity risk
D)income risk
6
Which is NOT a way to limit your financial risk?
A)Buy insurance.
B)Put all your money in one account.
C)Choose another alternative.
D)Diversify your assets.
7
Which term refers to giving up something by making one choice instead of another?
A)income risk
B)personal risk
C)liquidity risk
D)opportunity cost
8
Which term refers to a plan for using your income in a way that best meets your wants and needs?
A)opportunity cost
B)a variable expense
C)a budget
D)a budget variance
9
Which term refers to the actual amount of money you earn or receive during a given period of time?
A)income
B)deductions
C)gross pay
D)expenses
10
Which term refers to money taken out of your pay before your receive your paycheck?
A)income
B)deductions
C)gross pay
D)expenses
11
Which term refers to expenses that occur regularly and are regularly paid?
A)net expenses
B)fixed expenses
C)variable expenses
D)gross expenses
12
Which term refers to purchases that you can choose to make or not?
A)net expenses
B)fixed expenses
C)variable expenses
D)gross expenses
13
What is the difference between a budgeted amount and an actual amount?
A)a deduction
B)a deficit
C)a surplus
D)a budget variance
14
Which term refers to extra money that can be spent or saved, depending on your goals and values?
A)a deduction
B)a deficit
C)a surplus
D)a budget variance
15
What is one effect of spending more money than you receive as income?
A)a deduction
B)a deficit
C)a surplus
D)earnings
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