Financial Literacy Quiz

Which of the following is a good example of making a financial 'trade-off'?

• skipping a few classes at school to go shopping at the mall.

• skipping a few dinners out to save for a weekend trip.

• skipping a few days of work to look for a new job.

• trading your U.S. dollars for Euros.

What is the agency responsible for collecting taxes at the federal level?

• Security and Exchange Commission (SEC).

• Internal Revenue Service (IRS).

• Federal Reserve System (FED).

• Consumer Financial Protection Bureau (CFPB).

If the inflation rate is 3%, how will it affect the purchasing power of someone typically spending $200 on consumer goods?

• Their purchasing power will increase.

• Their purchasing power will remain the same.

• Their purchasing power will decrease.

• Their purchasing power will fluctuate unpredictably.

Who in our economy is most impacted by a rising rate of inflation?

• Individuals with higher levels of savings.

• Renters in urban areas.

• People with variable-rate mortgages.

• Retirees living on fixed incomes.

If a person increases the number of withholdings on their W4 form, their paycheck will

• increase

• decrease

• remain the same

• fluctuate unpredictably

What is the potential advantage of using a direct deposit for receiving a paycheck?

• It increases the amount of deposit.

• It provides an opportunity to earn interest on the paycheck.

• It allows for quicker access to the funds compared to receiving a paper check.

• It requires a physical trip to the bank to deposit the check.

Which answer choice reflects the mandatory federal payroll deductions that are typically withheld from an employee’s paycheck?

• Social Security, Medicare, and Federal income taxes.

• Retirement, health insurance, and life insurance benefits.

• Medicaid, State, and Federal income taxes.

• Social Security, Medicare, State and Federal income taxes.

What is a payday loan?

• An interest free loan provided by a friend or family member.

• A type of loan offered by banks with low interest rates.

• A short term, high interest loan typically due on the borrower’s next payday.

• A long-term installment loan with payments made each payday.

What is one potential benefit of obtaining a college degree when it comes to job opportunities?

• It may limit career opportunities to specific fields.

• It may increase earning potential.

• It may increase the chances for entrepreneurship.

• It may hinder networking and social opportunities.

You are considering two job offers: one offers a high salary and comprehensive health insurance while the other offers a similar salary, plus comprehensive health insurance, retirement benefits, and paid time off. Which financial concept should you consider to accurately compare the value of these benefits?

• Gross income.

• Net worth.

• Total compensation.

• Disposable income.