Spring Final Exam Review

What is the purpose of a financial plan?

• to maximize an individual's earning potential

• to help an individual set and meet financial goals

• to decrease the debts an individual incurs each year

• to enable an individual to increase their income

What is the main purpose of a budget?

• to manage money

• to increase income

• to diversify accounts

• to decrease expenses

What is the most likely purpose for setting aside money in a financial reserve?

• making investments

• using transportation

• paying for college tuition

• using in emergencies

What is the correct definition of opportunity cost?

• the price an individual must pay to find gainful employment

• the value of the next best opportunity an individual is giving up

• the costs incurred when starting up a business

• the expenses generated when providing job opportunities

What is the correct definition of currency?

• income earned by a business

• taxes owed to the government

• the most recent stock prices

• a specific type of money

What is an example of employee incentives?

• salary, telecommuting, and weekly pay checks that make a job appealing to employees

• insurance, medical, and retirement plans that employers offer to help employees

• networking, internet, and newspapers that offer job opportunity information

• references, resumes, and cover letters that are required by the employer

Why does unemployment occur?

• A strong economy causes people to buy fewer things, so employers lay off workers.

• A weak economy causes greater spending on luxury items, so people lose low paying jobs.

• A weak economy causes less spending, so businesses shut down and people lose jobs.

• A strong economy causes greater spending and demand exceeds supply, so businesses shut down.

Which example explains how professional training may increase earnings?

• An employee attends professional training, asks for a one-day transportation reimbursement, and it is added to his pay.

• An employee receives training that increases her capital, allowing her to apply for a higher position, which results in a raise.

• An employee is recognized for her efforts after a professional training and given a completion certificate.

• An employee neglects to complete an essay for college credit that is offered by a professional training.

What must employers do to create safe workplace conditions?

• Handle complaints about safety issues promptly, particularly in industries like mining or aviation.

• Provide employees with pay that meets the national or state minimum pay rates.

• Refrain from showing a bias against workers based on factors like race, color, religion, age, or national origin.

• Allow employees to take a leave of absence for situations like child birth, adoption, or medical emergencies.

What is the best example of a positive workplace climate?

• An uninvolved boss sits in his office forcing untrained employees to run the business without guidance.

• A critical management team sends out a list of tasks each day that require employees to work unpaid overtime.

• An encouraging boss greets her staff each morning with motivational messages and shared goals.

• Employees have sent repeated requests for a meeting about working conditions which has gone unnoticed.