Question 1

Our ____________ is an important factor in determining how well we live. ​

Accepted Answer

Income is a crucial factor in determining a person's standard of living. It affects the level of access to basic needs such as food, housing, healthcare, and education, as well as the ability to participate in leisure activities and save for the future. Marital status and credit can also have some impact on quality of life, but not as significant as income. Deflation, on the other hand, refers to a decrease in the general price level of goods and services and is not directly related to personal quality of life.

Question 2

The consumer price index (CPI)is a measure of ____________. ​

Accepted Answer

The CPI is a measure of inflation, as it tracks the average price of a basket of goods and services consumed by households over time.

Question 3

Sarah starts investing in an individual retirement account (IRA)at the age of 30 earning 10 percent for 35 years.At age 65,she will get more returns as compared to those returns if she ____________. ​

Accepted Answer

The answer of Sarah starts investing in an individual retirement...

Question 4

Following an economic trough,the economy will often enter a period of ____________. ​

Accepted Answer

Following a trough, the economy enters a period of expansion. This is characterized by increasing economic activity, rising employment rates, and a general improvement in consumer spending.

Question 5

A person's ____________ leads to increase in income potential in his or her career. ​

Accepted Answer

Formal education is directly linked to an individual's skillset and knowledge, which increases their chance of getting better job opportunities and promotions. Research shows that a higher level of formal education can lead to higher earning potential in many fields. Social status, marital status, and corporate loyalty may also have some influence but are not as directly related to income potential as formal education.

Question 6

Tax planning is most common among individuals with ____________. ​

Accepted Answer

Tax planning is most common among individuals with high income as they have higher tax liabilities and therefore need to find ways to reduce their tax burden. Low-income individuals may not have many tax planning opportunities, while those with no income or erratic income may not need tax planning as much.

Question 7

A decrease in the gross domestic product (GDP)would indicate that the economy is experiencing a(n)____________. ​

Accepted Answer

When the GDP decreases, it indicates that the economy is undergoing a contraction, meaning that the output of goods and services is decreasing, which can lead to a slowdown in economic growth and potentially recession.

Question 8

In ____________,the employer allocates a certain amount of money to each employee and lets the employee spend that money for benefits that suit him or her. ​

Accepted Answer

In cafeteria plans, employees are allotted a certain amount of money to be spent on benefits as per their preferences. It allows employees to choose from a range of benefit options such as health insurance, retirement plans, flexible spending accounts, etc. This can help employers save costs while giving employees the freedom to customize their benefits package.

Question 9

Heads of households who have more formal education ____________. ​

Accepted Answer

Studies have consistently shown that individuals with higher levels of education tend to earn higher annual incomes on average. Therefore, heads of households who have more formal education are likely to earn more annual income. There is no evidence to suggest that they pay more tax penalty, can only use tax shelters, or plan careers for the entire family.

Question 10

An individual's salary will be lower if he or she lives in a(n)____________ area. ​

Accepted Answer

Rural areas tend to have a lower cost of living and lower demand for certain jobs, resulting in lower salaries. Metropolitan, industrial, and overpopulated areas tend to have higher salaries due to higher demand for certain jobs and higher cost of living.

Quiz 1: Understanding the Financial Planning Process

Our ____________ is an important factor in determining how well we live.

The consumer price index (CPI) is a measure of ____________.

Sarah starts investing in an individual retirement account (IRA) at the age of 30 earning 10 percent for 35 years.At age 65,she will get more returns as compared to those returns if she ____________.

Following an economic trough,the economy will often enter a period of ____________.

A person's ____________ leads to increase in income potential in his or her career.

Tax planning is most common among individuals with ____________.

A decrease in the gross domestic product (GDP) would indicate that the economy is experiencing a(n) ____________.

In ____________,the employer allocates a certain amount of money to each employee and lets the employee spend that money for benefits that suit him or her.

Heads of households who have more formal education ____________.

An individual's salary will be lower if he or she lives in a(n) ____________ area.