Personal Economics - Week 02 Quiz

The primary goal of financial planning is to

• maximize cash inflows.

• increasing earnings.

• maximize wealth.

• minimize financial risk.

The cash flow statement reports a person's or family's

• value of investments.

• plan for borrowing.

• current income and payments.

• net worth.

Jim has $1,000 income from his job and $200 stock dividend income this month. This month Jim has rent and utilities of $300 and he spent $300 on groceries and $200 on clothing. What is his cash inflow this month?

• $400

• $600

• $500

• $1,200

Jeff has a $1,000 salary and a $100 dividend income this month. This month Jim has rent and utilities of $300 and he spent $200 on groceries and $100 on clothing. What is his net cash flow this month?

• $1,100

• $400

• $500

• $600

All of the following affect cash outflows except

• the size of the family.

• your personal consumption behavior.

• your age.

• your education level.

A cash flow statement that is based on forecasted cash flows for a future time period is called a(n)

• net cash flow.

• income statement.

• cash outflow.

• budget.

If you do not budget for unexpected expenses in a given month, you will likely experience a(n)

• cash surplus.

• cash shortage.

• decrease in liabilities.

• increase in assets.

In budgeting, it is useful to compare ________ with the budgeted amounts to determine the accuracy or error of the budget and adjust it as necessary.

• both actual inflows and outflows

• current assets

• actual outflows

• actual inflows

If spending exceeds the amount of your income over a period of time, your best option is probably to

• sell some of your assets.

• increase your work hours.

• get a second job.

• reduce your spending.

Allison expects her monthly cash inflow after taxes to be $3000. She also has the following monthly expenses: Rent, $750; student loan payment, $200; utilities, $150; food, $300; recreation, $600; car expenses, $200; clothing, $150. What is Allison's net cash flow for the current month?

• ($650)

• $2,350

• $3000

• $650