Assessment #5 Preview

Bailey makes $20,000 a year and pays 30% in taxes. Felicia makes $85,000 a year and pays 20% in taxes. This type of tax structure is

• progressive 
•  regressive 
•  proportional 
•  sales
  

 Jennifer receives a 2 percent increase in wages this year. The inflation rate is 4 percent. Which of the following is most likely to happen to Jennifer's financial situation? 

• She will have more income to spend and greater purchasing power
• She will have more income to spend and less purchasing power. 
• Her cost of living and her purchasing power will decrease. 
• Her cost of living and her purchasing power will increase

Shondelle has a large sum of money to invest. She is not concerned with a large return, but is very sensitive to risk.  Which would be the best investment for her? 

• A checking account 
• Real estate 
• The stock market 
• A savings account

Kim is deciding between two loan offers. To make the BEST decision, Kim should

• research the beacon score of each loan
• analyze each loan's debt-to-credit ratio
• compare each loan's annual percentage rate
•  investigate the average prime rate of both loans

Which incentive best completes this diagram? 

• Dividend payments 
• Interest payments 
• Bonuses
• Salaries

You want to buy a car, and you have decided that safety is the primary concern. After consulting the research in the table, which vehicle should you purchase?

• Kia Rio
• Mini Cooper
• Ford Mustang
• Volkswagen Jetta

The town of Matildaville is attempting to reduce the amount of litter on the side of the roads. Which proposed program would be a negative incentive?

• free food for cleaning up
• money for keeping your road clean
• $200 fine for each piece of litter
• concert tickets for a clean up day

Kristi deposits, or invests, her paycheck in a savings account. The bank can then offer some of the money to a borrower in the form of a loan. How can Kristi benefit financially from this relationship?

• Kristi can earn interest on her original deposit.
• Kristi can feel good that she supported a borrower
• Kristi can choose to invest her money in another bank that doesn't make loans to borrowers.
• Kristi can decide to take her money out the savings account before the loan is made to save money.
  

How does the risk/return ratio of a government bond compare with that of other types of investments?

• Government bonds have higher risk and higher returns
• Government bonds provide higher returns and lower risk
• Government bonds typically provide lower returns, at lower risk
• Government bonds have about the same risk/return ratio as other investments.

Which of these forms of taxation has been criticized for placing an excessive burden on people with less ability to pay?

• luxury taxes
• regressive taxes
• progressive taxes
• inheritance taxes