Foundations in Personal Finance Chapter 1 Part 2

Which of the following statements best describes how Americans are being outsmarted by banks and other lenders?

• Credit is marketed so well that we desire to have it while completely dismissing the fact that interest rates and fees continue to destroy our financial well-being.

• We are taught that we can buy happiness.

• Buying things on credit has become acceptable in our culture.

• We are driven by consumerism.

Personal financial success is primarily the result of:

• Managing your money behavior

• Winning the lottery

• Generous welfare and unemployment programs

• Inheriting money from your parents

Which of the following statements best explains why income alone does not determine wealth?

• Investing is the only factor that contributes to wealth building.

• Income alone does determine a person's wealth.

• Only people who are natural savers can become wealthy.

• How much money a person makes does not dictate his or her spending and saving behavior.

Which of the following is not a true statement?

• Americans learned to borrow amidst post-WWII prosperity.

• The credit industry in America has not changed much since 1917.

• After 1970, consumer debt skyrocketed.

• As banks made higher profits, they were willing to lend more money to consumers.

The widespread financial insecurity of Americans is primarily because:

• The incomes of Americans are low

• The saving rate of Americans is low and many borrow in order to spend more than they earn

• Government programs are unavailable to help people when they are disabled or experience unemployment

• Most Americans save a high proportion of their income

Which of the following is not a factor in becoming money smart?

• Have knowledge of basic math

• Learn the language of money

• Manage your behavior with money

• Learn how to read your credit card statements

Which of the following is not a benefit of understanding your own money personality?

• Recognizing who you are allows you the opportunity to grow and learn.

• Once you know your money personality, you can develop a financial plan that works for you.

• Knowing your money personality allows you to excuse excessive spending because it is simply part of your nature.

• None of the above

True financial security is achieved when your money begins to generate an income-your money starts working for you.

• True

• False

Since you are a teenager, what you do now with money will have little effect on your financial future.

• True

• False

Most Americans today are wealthy and will have financial security when they retire.

• True

• False