Grade 12 Financial Literacy Quiz

What is the first step in creating a budget?

• Estimating monthly expenses

• Tracking daily spending

• Setting financial goals

• Calculating net income

Which of the following is considered a good debt?

• Credit card debt

• Mortgage

• Payday loan

• Car title loan

What is the primary purpose of investing?

• To save for retirement

• To beat inflation

• To generate income

• All of the above

Which of the following is NOT a common type of tax in the United States?

• Sales tax

• Income tax

• Luxury tax

• Estate tax

What is the main reason for government spending?

• To make profits

• To provide public goods and services

• To pay off national debt

• To invest in the stock market

Which of the following best describes "net income"?

• Total earnings before taxes

• Total earnings after taxes and deductions

• Gross income minus expenses

• Salary before overtime

What is a credit score primarily used for?

• Determining your eligibility for a job

• Calculating your tax rate

• Assessing your ability to repay borrowed money

• Measuring your financial knowledge

Which of the following is a characteristic of a savings account?

• High interest rate

• Limited access to funds

• Risk of losing money

• Liquidity and safety

What is the main advantage of compound interest?

• It decreases over time

• It is tax-free

• It allows you to earn interest on interest

• It is fixed and does not change

Which of the following is NOT a factor that affects your credit score?

• Your age

• Your payment history

• Amounts owed

• Length of credit history