Fin Lit 2 Test Review

A financial advisor is explaining to a client about different types of income. All of the following are examples of earned income EXCEPT:

• net earnings from the client's small business

• dividends from the client's stock investments

• commissions from the client's property sales

• wages from the client's job

A person has various sources of income. All of the following are examples of unearned income EXCEPT:

• interest from a savings account

• government transfer payments received

• tips received from a part-time waiter job

• dividends from investments

Consider a public park in your city. Which of the following is true about this public good?

• people do not benefit in direct proportion to taxes paid for its maintenance

• everyone in the city benefits from it

• no one can be excluded from using it

• all of these are characteristics of the public park

A student is studying different types of taxes for an economics class. The term 'progressive tax' comes up. Which of the following taxes would be considered a progressive tax?

• FICA

• sales tax

• Federal income tax

• property tax

A property owner needs to pay property tax. The amount of tax to be paid is based on the property's

• market value

• assessed value

• original cost

• none of these

Consider a scenario where you are employed at a company. Which of the following statements regarding the social security tax that you and your employer pay is correct?

• Your company pays the entire amount of social security tax

• Both you and your company each pay half of the social security tax

• As an employee, you are not subject to pay social security tax

• You pay the entire amount of social security tax

An employee is reviewing their paycheck and notices several deductions. Which of the following is NOT an optional deduction that might appear?

• health insurance

• savings plan

• Medicare

• Life Insurance

An employee at XYZ Corp is considering which benefits are most valuable. Which of the following would be considered a perk?

• Access to the company's fitness center

• Ability to work flexible hours

• Receiving employee discounts on company products

• All of the following

Michael is a mechanic who worked 42 hours last week. His regular pay is $10 an hour or $400 for the regular hours.For any overtime work (over 40 hours), he is paid 1.5 times his regular pay. How much did he earn last week?

• $430

• $400

• $420

• $30

Katrina went shopping for a party. She bought a pair of stylish shoes for $55.00, a pair of trendy jeans for $29.99 and a fashionable shirt for $27.79. The sales tax in her city is 7%. Approximately how much did she end up paying in sales tax?

• $120.67

• $112.78

• $7.89

• $104.89