Personal Finance-Review for EOC (CFA #12)

The income that results from saving money in a bank is called

• Wages
• Rent
• Interest
• Dividends 

The BEST example of progressive tax in the US is

• The federal excise tax on gasoline
• The Social Security tax
• The federal personal income tax
• State sales taxes

Which of the following is MOST likely to cause wages to increase for United States workers

• An increase in interest rates
• An increase in the value of the dollar
• An increase in worker productivity
• An increase in retirement rate among United States workers

Who is hurt MOST by unanticipated inflation?

• Savers at a fixed rate of interest
• Borrowers at a fixed rate of interest
• Workers with a union cost-of-living adjustment in their contracts
• speculators in gold and other precious metals

Loans extended for longer periods of time often involve higher interest rates in order to 

• Compensate the lender for greater risk
• Compensate the buyer for using savings to make a purchase
• Encourage consumers to buy durable goods for extended periods of time
• encourage savings

Bob decides to use his last $5 to buy a pizza lunch even though his gas tank is nearly empty. Using a rational decision making model, Bob determines

• The price of pizza is less than the price of gasoline
• Gasoline is too expensive for him right now
• Food more valuable to him than gasoline
• Gasoline is more valuable to him than pizza

In 1991, the Secretary of Labor appointed a commison to determine skills people need to succeed in the world of work in a document called SCANS report. In the Interpersonal Competence" section, the report outlined the following necessay skills:
Teaches others new skills
Works with diversity
All of these skills require workers to

• Work well with other employees
• Acquire and evaluate information
• Work with a variety of technologies
•  identify, organize, and allocate resources

Which of the following groups is hurt LEAST by a rising rate of inflation

• Owners of stocks and bonds
• Service providers fulfilling long-term contracts
• Homeowners paying back large fixed rate loans
• Retired persons living on a Social Security income

Ken makes $50,000 per year and Kirby makes $30,000 per year. Ken pays a higher average tax rate on his income than Kirby.   This infers that taxes on income are

• Regressivde
• Proportional
• Progressive
• Marginal

The main difference between a credit union and a commercial bank is that

• Only commercial banks offer checking account services to its members
• Commercial banks make loans, but don't offer checking or savings account services
• Credit unions don't make home and car loans, wheras commercial banks do make home and car loans
• Credit unions are only available to specific customers, but commercial banks are available to everyone