Economics and Personal Finance Review

You are behind on your debt payments and you go to a responsible credit counseling service, the Consumer Credit Counseling Services. How can they help you?

• They can force those who loaned you money to forgive your debts

• They can get the federal government to apply your income taxes to pay off your debts

• They can cancel your credit cards without your permission

• They can work with those who loaned you money to set up a repayment schedule you can afford to make.

If a person makes a deposit of $100,000 or more into a bank account, the bank must notify the:

• US Treasury Department

• Federal Bureau of Investigation

• State Banking Commission

• Internal Revenue Service

What is the best example of a way to reduce fees paid for ATM transactions?

• When making supermarket purchases with a debit card, a person adds $50 in cash to the transaction instead of using an ATM machine.
• When using an ATM machine, a peA person uses any nearby bank ATM machine rather than going to a branch of the issuing bank to make ATM withdrawals.rson takes only $20 each time out of the ATM machine located in a neighborhood store.
• A person uses any nearby bank ATM machine rather than going to a branch of the issuing bank to make ATM withdrawals.
• A person uses a convenient ATM machine but only at night or weekends.

How can individuals be prepared for losing their job or having a large medical expense?

• Maintain a checking account with sufficient funds
• Pay credit card bills on time
• Prepare a budget
• Save at least three months of income

Frankie's savings account has earned a lot of interest. He wants to know if he must pay taxes on the interest earned. What would the IRS tell him?

• Interest earned on savings accounts is not taxable.
• A sales tax will be charged on the interest earned.
• Savings account interest is taxable.
• If the interest is under $50, it is not taxable.

When a person is reconciling a checking account and notices that the balance in the checkbook does not match the balance on the statement from the bank, which action is it appropriate for the person to take first?

• Adjust the balance in the checkbook so it is the same as the bank's balance.
• Determine the checks already written have cleared.
• Deposit sufficient funds to adjust the balance in the checkbook to match the bank's balance.
• Notify the bank in writing to adjust the statement.

 A person has three credit cards with very large outstanding balances and is unable to make payments on any of them. Which action should the person take?

• Notify a credit reporting agency in order to avoid a late fee.
• File for bankruptcy in order to maintain ones current credit score.
• Notify the card companies in order to negotiate a new payment plan.
• Contact the IRS in order to avoid paying income tax this year.

 A man budgeted $200 a month for clothing. This month the man spent $150 on clothing therefore that budget item is considered to have:

• An outflow deficit.
• An income overage.
• A budget variance
• A budget deficit

One of the benefits of holding an investment for over a year rather than selling it in less than a year is that the:

• Capital gains on the investment will be taxed at a lower rate
• Fees will not be charged by brokers for selling the investment.
• Money earned on the investment will be considered tax-free.
• Profits on the investments can be averaged over the length of time the investment is held.

 A person's debt ratio shows the relationship between debt and net worth. The lower the ratio the:

• Worse off financially the person is.
• Better off financially the person is.
• More liquid assets the person has.
• Less liquid assets the person has.