Chapter 20 Quiz

Match the following

• Variable Expense

• Expenses within your budget that change from month to month.

• Fixed Expense

• Expenses in your budget that you can expect to stay the same over time

• Income

•  The money you earn.

• Debt

• The state of owing money.

Match the following

• Premium

•  The amount of money you pay regularly (usually monthly or annually) to your insurance company to maintain your insurance coverage.

• Insurance

• An agreement where an individual pays a sum of money in exchange for financial compensation in the event of a loss, damage, illness, or death

• Deductible

• The specific amount of money you must pay out of your pocket before your insurance starts covering the remaining costs.

• Budget

•  A tool an individual uses to determine the state of their finances and help them plan spending over a period of time

Which of the following is an example of a fixed expense?

• Rent payment

• Entertainment costs

• Impulse purchases

Which of the following is an example of a NEED (essential) purchase?

• Fast food

• Prescription medications.

• 1. The newest cell phone.

When following the 50/30/20 rule, which category is recommended for dedicating 20% of your income?

• Needs

• Wants

• Savings

Isabella was involved in a minor car accident. Nobody was hurt, but the other driver’s car was slightly damaged. The full cost of the damage was $350. After communicating with her auto insurance company, Isabella had to pay $100 for the damage. What is the name for the payment that Isabella had to make?

• Premium

• Deductible

• Debt

Brian recently started a job in construction, and was informed about the potential dangers of the job. Although it’s unlikely, Brian wants to make sure that his family can take care of themselves financially if something tragic happens to him at work. Which insurance should Brian seek out to cover himself in this scenario?

• Renter’s/Homeowner’s Insurance

• Health Insurance

• Life Insurance