WISE PRACTICE TEST #1

when money is DISCRETIONARY it means

• it's money for important bills such as electricity and mortgage/rent

• it's extra or disposable income you have after paying necessary bills like the electricity and mortgage/rent

This word means - what is given up when a choice is made.

• discretionary

• inflation

• opportunity cost

• credit

You have $15,000 that you could either invest in Company XYZ stock or put toward a graduate degree. You choose the stock. The opportunity cost in this situation is

• future profits from the XYZ stock

• the increased lifetime earnings that may have resulted from getting the graduate degree

A manufacturer of headphones is facing stiff competition from low cost products with similar designs to their own. They decide to increase the quality to make the competition look and feel comparatively cheap. The opportunity cost of the new product design is

• increased amount of headphones that need to be made

• the need to find manufacturers to make the new headphones

• increased cost and inability to compete on price

Treasury Department is responsible for collecting taxes. True or False?

• True

• False

The Treasury Department is responsible for printing money. True or False?

• True

• False

The Treasury Department is responsible for insuring bank deposits. True or False.

• True

• False

Who is hurt the most and the least with inflation?

• Most hurt are lenders (banks) and people living on a fixed income. Lease hurt are those who owe large amounts of money.

• Most hurt are those that owe large amounts of money. Lease hurt are lenders (banks) and people living on a fixed income.

Higher rates of interest on loans will be charged at

• banks and credit unions

• pawnshops, payday lenders, tax refund lenders

What is overdraft protection?

• featured offered by stock companies to ensure you do not lose your initial deposit

• feature offered by banks that will take money from your savings account when you don't have enough in the checking account to pay for whatever it is you're paying for.

• featured offered by banks that will take money from your savings account to pay for interest on your checking account.