Chapter 11: Economic Stress and Families

Test Bank

Multiple Choice

1. A longitudinal study of children of the Great Depression published in the 1970s linked economic hardship to the ______.

A. introduction of anti-child labor laws

B. sudden increase in family size

C. sedimentation of racial inequality

D. reorganization of family roles and responsibilities

Cognitive Domain: Knowledge

Answer Location: Introduction

Difficulty Level: Easy

2. Economic stress resulting from the birth of a baby is considered ______.

A. diffused

B. situational

C. normative

D. nonnormative

Cognitive Domain: Application

Answer Location: Defining and Measuring Economic Stress

Difficulty Level: Hard

3. Karen is diagnosed with breast cancer. The health care she receives causes economic stress for her family. What kind of stress is this?

A. diffused

B. targeted

C. normative

D. nonnormative

Cognitive Domain: Application

Answer Location: Defining and Measuring Economic Stress

Difficulty Level: Hard

4. The past decade has seen a rise in ______, which include(s) freelance, independent work that pays a person by a task or project.

A. structural poverty

B. the gig economy

C. low-earning appointments

D. entry-level jobs

Cognitive Domain: Knowledge

Answer Location: Employment Instability and Insecurity: A Threat to Family Life

Difficulty Level: Easy

5. Median family income ______.

A. the range of family income across the United States is a more valuable measure

B. counts cash income as well as other assets

C. is distorted by outliers

D. fails to consider noncash assets

Cognitive Domain: Comprehension

Answer Location: Income: Family Livelihood

Difficulty Level: Medium

6. A family’s net worth is determined based on their ______.

A. assets minus liabilities

B. prior year’s tax return

C. their current year’s tax return

D. their income minus their expenses

Cognitive Domain: Comprehension

Answer Location: Net Worth: A Measure of Family Wealth

Difficulty Level: Medium

7. Home ownership is ______.

A. important because it helps families build wealth

B. a burden because of foreclosure risk

C. only associated with benefits for the wealthy

D. a luxury that seldom increases family well-being

Cognitive Domain: Comprehension

Answer Location: Home Ownership: The American Dream

Difficulty Level: Medium

8. Of the following, ______ threaten(s) the financial stability of families the most.

A. school loans

B. mortgages

C. credit card debt

D. therapy bills

Cognitive Domain: Knowledge

Answer Location: Household Debt and Families: Borrowing Against the Future

Difficulty Level: Easy

9. In 2016, ______ of households had some type of debt.

A. 100%

B. 93%

C. 85%

D. 77%

Cognitive Domain: Knowledge

Answer Location: Household Debt and Families: Borrowing Against the Future

Difficulty Level: Easy

10. The importance of savings is greater than ever because ______.

A. there are many more technological products crucial to daily life, and they are expensive

B. families are becoming larger and are therefore more expensive to maintain

C. higher education is so much more expensive, and so parents need to start saving right from their child’s birth

D. benefits like pensions, health care, and retirement contributions are decreasing

Cognitive Domain: Comprehension

Answer Location: Economic Conditions of the American Family

Difficulty Level: Medium

11. The ______ model is associated with the prediction that economic hardships will lead to adverse changes in personal mental health, marital quality, and parenting for children and families.

A. family economic stress

B. family financial hardship

C. stress-induced economic hardship

D. ABC-X of economic stress

Cognitive Domain: Knowledge

Answer Location: The Family Economic Stress Model

Difficulty Level: Easy

12. Economic stress in the family manifests itself directly by ______ and indirectly by ______

A. likelihood to file for bankruptcy; the rise of health issues

B. influencing individual well-being; influencing family interactions

C. influencing family vacations; influencing family budgets

D. promoting arguments; promoting divorce

Cognitive Domain: Comprehension

Answer Location: The Family Economic Stress Model

Difficulty Level: Medium

13. The family economic stress model indicates that ______.

A. a couple’s premarital wealth impacts the quality of relationship, which predicts marital stability

B. a couple’s premarital wealth only impacts marital stability if one of the couple has significantly less to contribute than the other

C. a couple’s hard economic circumstances increase financial strain, which increases psychological distress, which in turn negatively impacts marital stability

D. a couple’s contributions to the family’s wealth impacts the financial stability, which in turn impacts the couple’s marital stability

Cognitive Domain: Comprehension

Answer Location: The Family Economic Stress Model

Difficulty Level: Medium

14. Overall, economic stress contributes to ______.

A. primarily the father’s negative health and mental health outcomes

B. primarily the mother’s negative health and mental health outcomes

C. primarily the children’s health and mental health outcomes

D. the entire family’s negative health and mental health outcomes

Cognitive Domain: Application

Answer Location: The Family Economic Stress Model

Difficulty Level: Hard

15. If families are adaptable, cohesive, and have strong communication skills,______.

A. the impact of economic hardship is more manageable

B. they are less likely to experience economic hardships

C. their life savings will be higher than those with fewer coping skills

D. they will be less resilient

Cognitive Domain: Comprehension

Answer Location: Coping With Economic Stress

Difficulty Level: Medium

16. Mr. and Mrs. Ramirez are 65 and have decided to retire. They have worked hard their whole lives and saved every penny so that they could have a comfortable retirement. Further, they have accumulated the resources to leave behind money for their family when they pass away. This most closely describes which phase of the family economic life cycle?

A. Phase I

B. Phase II

C. Phase III

D. Phase IV

Cognitive Domain: Application

Answer Location: Phase III. Living in Retirement and Planning for Intergenerational Transfers

Difficulty Level: Hard

17. The Thompsons are just starting out. Mr. Thompson relied heavily on his credit cards to get through his last year of graduate school and to pay for childcare for their 2-year-old daughter. Mrs. Thompson worked full-time and paid the mortgage and the monthly bills. Their style of managing their economic situation is to take it as it comes. The Thompsons are ______.

A. in Phase I of the economic life cycle and will most likely experience higher levels of economic stress because they don’t have plans to save

B. in Phase II of the economic life cycle and will most likely have a secure financial future

C. in Phase III of the economic life cycle and are ready to begin saving for retirement because they are at their peak earning years

D. are not in a phase of the economic life cycle yet because one of them is unemployed

Cognitive Domain: Application

Answer Location: Phase I. Family Formation: Starting a Credit and Debt Management Program

Difficulty Level: Hard

18. As families struggle to retire the debt they have accumulated in the formation stage, families with children may encounter significant additional educational expenses as offspring approach college age. This is typical of ______ of the economic life cycle.

A. Phase I

B. Phase II

C. Phase III

D. Phase IV

Cognitive Domain: Comprehension

Answer Location: Phase II. Repaying Debt and Saving for Retirement

Difficulty Level: Medium

19. Mandy has an MSW and worked for a local agency that serves a population of older adults. She always took on projects with enthusiasm and knows that she can accomplish the jobs she takes on. Her program funding was cut, and she lost her job with only 2 days’ notice. The agency is sorry but cannot offer her another position. According to research on coping, which statement best applies to Mandy’s situation? Mandy will ______.

A. have difficulties coping with this situation because she never developed resilience

B. experience adverse mental health outcomes due to the stress of losing her job

C. be well prepared to cope because of her strong self-efficacy and sense of mastery

D. struggle with mental health concerns but eventually adjust to her situation

Cognitive Domain: Application

Answer Location: Coping With Economic Stress

Difficulty Level: Hard

20. What were the top three kinds of debt held by individuals in 2016?

A. medical bills, private school tuition debt, and late child support payments

B. credit card debt, mortgages, and education loans

C. small business loans, gambling debts, and car loans

D. mortgages, gambling debts, late child support payments

Cognitive Domain: Knowledge

Answer Location: Household Debt and Families: Borrowing Against the Future

Difficulty Level: Easy

21. When does a family meet the criteria for positive cash flow?

A. when they pay off their mortgage

B. when debt exceeds assets

C. when they qualify for credit cards

D. when income exceeds expense

Cognitive Domain: Comprehension

Answer Location: Savings: Family Safety Net

Difficulty Level: Medium

22. Studies of unemployment have found that ______ successfully predicts reemployment.

A. adaptability

B. income

C. high self-efficacy

D. external locus of control

Cognitive Domain: Comprehension

Answer Location: Coping With Economic Stress

Difficulty Level: Medium

23. What is the family life cycle model, developed by Ando and Modigliani (1963), used for?

A. understanding the saving and spending behaviors of families

B. helping families avoid debt accumulation

C. focusing on the social construction of savings and debt

D. explaining how families get into debt

Cognitive Domain: Comprehension

Answer Location: Family Financial Planning as a Coping Resource

Difficulty Level: Medium

24. In the family life cycle model, what partly explains the gap between the theory of household resource allocation over time and actual resource allocation?

A. bankruptcy

B. nonnormative factors

C. psychology

D. unrealistic standards of living

Cognitive Domain: Comprehension

Answer Location: Family Financial Planning as a Coping Resource

Difficulty Level: Medium

25. Compared to families who received professional financial planning advice, families who did not receive professional financial planning advice ______.

A. have less retirement savings

B. have higher levels of debt

C. are less satisfied with their current financial situation

D. are more satisfied with their current financial situation

Cognitive Domain: Analysis

Answer Location: Phase II. Repaying Debt and Saving for Retirement

Difficulty Level: Medium

True/False

1. Financial strain represents the subjective, psychological aspects of economic stress and is thought to be related to, but independent of, one’s income.

Cognitive Domain: Knowledge

Answer Location: Defining and Measuring Economic Stress

Difficulty Level: Easy

2. Economic stress is a nonnormative stressor regardless of whether it is temporary or chronic.

Cognitive Domain: Comprehension

Answer Location: Defining and Measuring Economic Stress

Difficulty Level: Medium

3. Research has found that job loss is only associated with negative outcomes when it occurs to a single-income family.

Cognitive Domain: Comprehension

Answer Location: Employment Instability and Insecurity: A Threat to Family Life

Difficulty Level: Medium

4. A family’s net worth refers to their employment-based income.

Cognitive Domain: Knowledge

Answer Location: Net Worth: A Measure of Family Wealth

Difficulty Level: Easy

5. Debt associated with mortgages is the more problematic type of debt.

Cognitive Domain: Application

Answer Location: Household Debt and Families: Borrowing Against the Future

Difficulty Level: Hard

6. Filing for bankruptcy impacts the ability to secure low-cost loans.

Cognitive Domain: Comprehension

Answer Location: Household Debt and Families: Borrowing Against the Future

Difficulty Level: Medium

7. The family economic stress model attributed to Conger and Elder (1994) predicts that economic hardship will adversely change personal mental health, marital quality, and parenting.

Cognitive Domain: Comprehension

Answer Location: The Family Economic Stress Model

Difficulty Level: Medium

8. Home equity refers to the value of a home minus the amount owed on the mortgage.

Cognitive Domain: Knowledge

Answer Location: Home Ownership: The American Dream

Difficulty Level: Easy

9. Secured debt is associated with more negative outcomes than unsecured debt.

Cognitive Domain: Comprehension

Answer Location: Household Debt and Families: Borrowing Against the Future
Difficulty Level: Medium

10. Research suggests that economic stress affects parenting practices by decreasing inconsistent, controlling, and punitive discipline.

Cognitive Domain: Comprehension

Answer Location: The Family Economic Stress Model

Difficulty Level: Medium

Essay

1. Discuss potential negative outcomes when an individual or family is unable to cope with economic stress.

Cognitive Domain: Analysis

Answer Location: Introduction

Difficulty Level: Medium

2. Describe several economic indicators that measure a family’s economic status.

Cognitive Domain: Comprehension

Answer Location: Measures of Family Economic Well-Being

Difficulty Level: Medium

3. What are the three stages of the family economic lifestyle cycle, and what challenges do families face at each stage? What can families do to plan at each stage?

Cognitive Domain: Analysis

Answer Location: Family Financial Planning as a Coping Resource

Difficulty Level: Medium

4. What traits are associated with successfully addressing financial hardships?

Cognitive Domain: Comprehension

Answer Location: Coping With Economic Stress

Difficulty Level: Medium

5. Summarize the benefits and drawbacks of home ownerships.

Cognitive Domain: Comprehension

Answer Location: Home Ownership: The American Dream

Difficulty Level: Medium