Please complete/respond to each exercise/question

1. How do personal and economic factors affect the operation of the financial system and personal financial decisions?

2. For each of the following situations, indicate if the person would tend to suffer or tend to benefit from inflation.

A person with money in a savings account
A person who is borrowing money.
A person who is lending money.
A person receiving a fixed income amount.

3. For each of the following ratios, explain what it tells the manager, the calculation that is performed and an example:

a. Debt -Equity Ratio

b. Current Ratio

c. Liquidity Ratio

4. For each of the following, indicate if the item is a TAX DEDUCTION or a TAX CREDIT.

Check the appropriate box to indicate if this is	a tax deduction, or	a tax credit.
(a) state personal income taxes paid
(b) charitable donations
(c) Expenses for adopting a baby
(d) moving expenses

5. Daniel Simmons arrived at the following tax information:

Gross salary, $54,250 Interest earnings, $75

Dividend income, $140 One personal exemption, $3,950

Itemized deductions, $7,000 Adjustments to income, $850

What amount would Daniel report as taxable income?

6. In the following financial situations, check the box that is the major influence for the person when selecting a savings plan:

Financial planning situation	Rate of return	Inflation	Taxes	Liquidity	Safety
(a) an older couple needs easy access to funds for living expenses
(b) a person is concerned with loss of buying power of funds on deposit
(c) a saver desires to maximize earnings from the savings plan
(d) a middle-aged person wants assurance that the funds are safe

7. Brenda Young desires to have $15,000 eight years from now for her daughters college fund. If she will earn 6 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation.