Financial Literacy Final Exam

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What are the functions of money?

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1. Medium of exchange: Facilitates trade. 2. Unit of account: Provides a standard measure of value. 3. Store of value: Maintains value over time.

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What is a retirement savings plan?

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A financial plan that allows individuals to save money for retirement, often with tax advantages and potential employer matching.

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What resources can be found on the U.S. Department of Labor website?

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Career resources, job training information, labor statistics, and workplace safety guidelines.

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What is bartering?

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The exchange of goods and services directly for other goods and services without using money.

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What is typically the most expensive life goal?

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Raising a child, due to costs associated with education, healthcare, and general upbringing.

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What is the importance of health insurance?

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Health insurance helps cover medical expenses, reducing financial risk associated with healthcare costs.

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What is a budget?

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A plan that outlines expected income and expenses over a specific period, helping individuals manage their finances.

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What is the difference between saving and investing?

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Saving is setting aside money for short-term goals, while investing involves using money to purchase assets for long-term growth.

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What is interest?

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The cost of borrowing money or the return on investment earned on savings, usually expressed as a percentage.

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What is a credit score?

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A numerical representation of a person's creditworthiness, based on credit history and financial behavior.