Theme 2 Review

If you start investing at a younger age rather than an older age, what is the result?

• You will be broke.

• You will have a higher amount of money than if you started later.

• You will have a higher amount of money if you start later.

• You will lose all of your money since you don't know how to invest.

What is the difference between a checking account and a savings account?

• Checking accounts have higher interest rates than savings accounts

• Checking accounts are used for long-term savings while savings accounts are used for daily transactions

• In general, you can earn interest on the money you have saved in a savings account. Also, there may be a minimum deposit required for a savings account.

• Checking accounts require a minimum balance while savings accounts do not

What is cash flow and why is it important to achieve positive cash flow?

• Cash flow is the total amount of money a person has; Positive cash flow is important so you can save money

• Cash flow is the movement of money in and out of a person's finances; Positive cash flow is important so you can save money and NOT go broke

• Cash flow is the amount of money a person earns from investments; Positive cash flow is actually not important

• Cash flow is the amount of money a person spends on daily expenses; You want a positive cash flow so you can continue vibing.

What are ways you can make the most out of your money?

• Buy in bulk

• Use coupons

• Create a budget and track expenses

• Take on more debt

What is the primary purpose of a budget?

• To track daily expenses

• To plan for future expenses and savings

• To calculate income tax

• To determine credit score

What is the difference between gross income and net income?

• Gross income is before taxes and deductions, net income is after

• Gross income is after taxes and deductions, net income is before

• Gross income includes investment earnings, net income does not

• There is no difference, they are the same

What is the main difference between a bank and a credit union?

• a) Banks exist to make a profit; credit unions re-invest profit to benefit members.

• b)     Banks offer higher-yield interest rates than credit unions.

• c) Unlike banks, credit unions do not have online banking.

• d) More services are offered by banks than by credit unions.

The highest-value alternative given up when a choice is made due to scarcity is:

• a) Opportunity cost.

• b) Scarcity cost.

• c) Discretionary cost.

• d) Second best.

Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called:

• a) Emergency money.

• b) Pay yourself first.

• a)     Slush fund.

• a)     None of the above.

How is a person’s net worth determined?

• a)     It is a projection of their lifetime earnings

• b)     It is their net income multiplied by their annual percentage rate

• c) It is their total assets combined with the amount in their bank accounts, minus debts

• d) It is their monetary net worth divided by their debts