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Business Finance Ch. 1 Review

Total questions: 22

Worksheet time: 11mins

Name
Class
Date
1.

Money does not includes checking accounts.

a)

True

b)

False

2.

Financial activities of governments involve borrowing funds to build things businesses need to operate.

a)

True

b)

False

3.

Decreased borrowing by consumers and businesses usually results in lower interest rates.

a)

True

b)

False

4.

A trade surplus involves a country importing more than it exports.

a)

True

b)

False

5.

The fifth step in the personal financial planning process is to evaluate alternatives.

a)

True

b)

False

6.

The opportunity cost of a decision is what a person gains when making a choice.

a)

True

b)

False

7.

A life insurance company is not a deposit financial institution.

a)

True

b)

False

8.

Check-cashing outlets are less expensive than services at most other financial institutions.

a)

True

b)

False

9.

Capital expenditures refer to payments for current operating expenses.

a)

True

b)

False

10.

Property taxes are a NOT major source of revenue for local governments.

a)

True

b)

False

11.

The participant in a financial system that collects taxes is

a)

Government

b)

consumers

c)

nonprofit organizations

12.

If freezing weather damages orange crops in Florida

a)

the money supply will decline

b)

interest rates will decline

c)

higher consumer prices can occur

d)

lower inflation would result

13.

A location where long-term debt and equity securities are sold is called

a)

a risk market

b)

a capital market

c)

a development bank

d)

a money market

14.

An example of a deposit institution would be

a)

a check-cashing outlet

b)

an insurance company

c)

a credit union

d)

an investment company

15.

A common use of funds for businesses is

a)

revenue

b)

capital expenditures

c)

money from investors

d)

borrowing

16.

Business activities that cross state lines are referred to as

a)

municipal business

b)

intrastate commerce

c)

regional economic development

d)

interstate Commerce

17.

Future cash flow is described as:

a)

The cost of money.

b)

when making an investment, both individuals and companies expect to receive money in the future.

c)

Dangers associated with investing

d)

as more people desire a certain investment, the value will likely increase.

e)

The ease and speed with which an investment can be converted into cash.

18.

Supply and demand is described as:

a)

The cost of money.

b)

when making an investment, both individuals and companies expect to receive money in the future.

c)

Dangers associated with investing

d)

as more people desire a certain investment, the value will likely increase.

e)

The ease and speed with which an investment can be converted into cash.

19.

Risk is described as:

a)

The cost of money.

b)

when making an investment, both individuals and companies expect to receive money in the future.

c)

Dangers associated with investing

d)

as more people desire a certain investment, the value will likely increase.

e)

The ease and speed with which an investment can be converted into cash.

20.

Liquidity is described as:

a)

The cost of money.

b)

when making an investment, both individuals and companies expect to receive money in the future.

c)

Dangers associated with investing

d)

as more people desire a certain investment, the value will likely increase.

e)

The ease and speed with which an investment can be converted into cash.

21.

Interest Rates are described as:

a)

The cost of money.

b)

when making an investment, both individuals and companies expect to receive money in the future.

c)

Dangers associated with investing

d)

as more people desire a certain investment, the value will likely increase.

e)

The ease and speed with which an investment can be converted into cash.

22.

What are the steps (in order) of the personal financial planning process?

a)

  1. Set Financial Goals
  2. Evaluate alternatives
  3. Determine current situation
  4. Create action plan
  5. Review your progress

b)

  1. Determine current situation
  2. Set Financial Goals
  3. Evaluate alternatives
  4. Create action plan
  5. Review your progress

c)

  1. Evaluate alternatives
  2. Create action plan
  3. Set Financial Goals
  4. Determine current situation
  5. Review your progress