Transitions Semester Test Study Guide

When you must give something up in order to get something else, it is called _____.

• a sound investment

• b. an opportunity cost

• c. a lost opportunity

• d. a limited means

If you have limited means you may need to prioritize. This could mean crossing video games off your shopping list and replacing them with _____.

• a. groceries

• b. movie tickets

• c. designer jeans

• d. new sneakers

Tracking your spending can help you _____.

• a. spend more money

• b. make good decisions

• c. know where your money is being spent

• d. spend less money

Cutting back on expenses can help you save money, which will _____.

• a. help you afford nicer things

• b. add up fast and help you save for your goal

• c. help you spend more money

• d. help you choose the right investments

A job is something you do to earn money. A career is ____?

• a. a single job you have once

• b. the kind of job most people have

• c. the type of job you do for a long time

• d. the way you save money

If someone likes animals and then becomes a zookeeper, they have chosen a career based on _____.

• a. income

• b. skills

• c. interests

• d. abilities

Why is a credit card a type of debt?

• a. Credit cards are only used in stores and not between friends.

• b. Credit card companies charge a small fee to use them.

• c. Using a credit card is borrowing money that needs to be paid back later.

• d. Using a credit card allows you to earn points and rewards.

You should not use a credit card when _____.

• a. you want something now that you will never be able to afford

• b. you need something now but can’t pay for it yet

• c. you have made a monthly budget

• d. you have just started a new job

How can insurance help with meeting savings goals?

• a. Insurance companies can quickly use your savings to pay for emergencies.

• b. You can have a savings account with an insurance company.

• c. Insurance pays for some costs of an emergency so you can keep your savings.

• d. Financial institutions give higher interest rates for people who have insurance

How are simple interest and compound interest different?

• a. Compound interest is like having more cash, but simple interest is like having more debt

• b. Simple interest is like having more cash, but compound interest is like having more debt

• c. Compound interest stays the same over time, but simple interest grows.

• d. Simple interest stays the same over time, but compound interest grows.