Test Bank for Personal Financial Literacy 2nd Edition By Joan Ryan
Personal Financial Literacy, 2eChapter 3 Test 1TRUE/FALSEIndicate whether the statement is true or false by writing T for True or F for False on the answer sheet. 1.Changing prices affect the spending power of both producers and consumers. 2.Businesses base price decisions, in part, on the spending patterns of consumers. 3.Reflation occurs when prices are rising at a slow rate. 4.As inflation rises, the true buying power of each dollar falls; this means an individual’s standard of living will drop. 5.Cost-push inflation occurs when cost increases are not offset with higher productivity that lowers the cost of each unit made. 6.The U.S. government measures inflation using tools such as the Consumer Price Index. 7.Monetary policy refers to actions by the federal government in setting wage rates.
- 8. In a market economy, if a price is set too low, consumers may think the product has a low value and not buy it.
- 9. Value-based pricing involves setting prices for products based on the competitors’ prices.
10. Emotional and impulse buying often lead to buyer’s remorse, meaning you later realize you made a poor choice. 11.Economizing and optimizing are consumer buying strategies that people use at different times.