Need help with the question below.

5. The financial planning process - Part 3 What are the activities involved in the process of personal nancial planning? Personal financial planning requires you to engage in a variety of different planning activities, including asset acquisition planning; liability and insurance planning; savings, investment, and tax planning; employee benefit and retirement planning; and estate planning. The nature and complexity of these planning activities will ow from your goals and personal circumstances, such as your current and expected future income, your wealth and available financial resources, and your current place in the life cycle. Changes in your circumstances and/or the economy can necessitate changes to these planning activities. What is tax planning, and how is it related to savings and investment planning? Tax planning involves evaluating your current and projected earnings and developing strategies that can legally v and/or 7 your tax liability. As it is currently written, the U.S. tax code recognizes several types of taxable income, including: - Active, or V , income - Passive income - Portfolio, or v , income - Taxdeferred and/or taxfree income Tax planning is closely related to savings and investment planning, because tax-reducing strategies often involve the use of tax-deferred or tax-free investments. Taxfree investments are so called because the interest or other income paid to their owners is V federal, and, perhaps, state taxes. Owners of taxdeferred investments, on the other hand, are allowed to V paying taxes on any returns generated by the investment. What is employee benefit planning? Employee benet planning involves selecting, coordinating, and managing employerprovided compensation that V the form of cash payments, such as wages, salaries, and commissions. These benefits can include sick leave, vacation, and personal time; life, health, and disability insurance; tuition reimbursement programs; pension, profitsharing, and V retirement plans; and flexible spending accounts (FSAs) for V care and health care expenses. Which of the following are tasks included in the process of employee benefit planning? Check all that apply. Determine the best investments to make. Determine the best methods for nancing purchases of expensive and longlived assets. Select the most appropriate benets and plans. Ensure the availability of a minimum necessary level of protection and coverage should you or your spouse lose your employer-provided benefits. What are retirement planning and estate planning? Retirement planning is designed to achieve and maintain your desired standard of living and quality of life after you stop working. To achieve the best results, it is critical that you begin your retirement planning 7 your retirement. Most Americans, however, don't start thinking about retirement until well into their 7 The cost of this postponed planning is a substantially 7 level of retirement income. Estate planning, the second half of retirement planning, involves the method by which your V will be passed on to your heirs, often by way of wills, trusts, and gifts. In general, at what age should you start addressing your financial planning activities? In general, it is best to begin the six planning activitiesasset acquisition, liability and insurance, savings and investment, tax, employee benet, and retirement and estateplanning as soon as possible. However, at what age is it generally recommended that you begin your employee benefit planning activities? 0 when I turn 70 0 After I retire 0 My mid405 0 My mid-205 6. The financial planning environment Who participates in the financial planning environment, and what do they do? Financial planning activities are conducted in a dynamic economic environment. In the United States, the economy consists of three major types of participantsconsumers, businesses, and government organizationseach pursuing their unique goals and objectives. The interactive activities of these participants create the circumstances in which you conduct your nancial planning activities and strongly inuence your outcomes. who are consumers and how do they affect the economic environment? Most people recognize that, as a group, consumers are the pivotal participants in the economy. The V decisions made by consumers determine which goods and services will be produced by businesses, just as their investment and saving decisions will strongly influence conditions in the V markets. Another indication of the importance of consumers is the effect their collective spending has on the economic activity level observed in the economy. 7 in the level of consumer spending is usually credited with causing V and all benefits or costs that go with it. How do businesses contribute to conditions in the economic environment? Businesses sell to consumers and government organizations, providing them with V in return for v . To accomplish this, businesses transform the 7 inputs to the production process provided by consumers (namely land, labor, equipment, managerial talent, and a willingness to take risks) into finished products and services. In return, consumers are paid v in the form of rent, wages, interest, and profits. Businesses, or v are probably the most constrained participant in the economy, because in the long term their choice of goods and services produced is dictated by the purchasing preferences of consumers and government organizations, or v . In addition, businesses are also constrained by the laws and regulations imposed by federal, state, and local government organizations. What role do government organizations play in the economic environment? Federal, state, and local government organizations fulfill several roles within the economy. Which of the following are roles provided by government organizations? Check all that apply. 3 Providing essential private services 3 Providing essential public services j Regulating economic activity Which of the following is a principal tool used by government organizations to constrain the activities of businesses and consumers? O Initiating negative social media campaigns 0 Enacting monetary policy In overseeing the economy, the goals of the federal government are economic V and a high V level. The two principal policy tools that the federal government uses to manage economic conditions are monetary policy and fiscal policy. v is used to control the size of the money supply to stimulate or moderate business activity levels in the economy. In contrast, v uses government spending and taxation to do the same. what policy tools can be used to increase or decrease an economy's activity level? If the federal government wants to increase production and purchasing activity levels in the economy, which of the following policy tools could it use? Check all that apply. C Reduce tax rates. I: Decrease the money supply. C Increase the money supply. l: Increase tax rates