WSS Fin Lit | U1&U2 Key Terms

What is the definition of "asset" as used in financial contexts?

• Anything of value that is owned by an individual.

• A liability or debt that must be repaid.

• A type of financial aid for college.

• A tax that is withheld from an employee's paycheck.

What does the term "Effective Tax Rate" refer to?

• The total amount of taxes a person owes without deductions.

• The percentage of income that is not taxed.

• The actual rate you pay in taxes, as a percentage of your overall income.

• The rate at which businesses are taxed on their profits.

Which tax withholdings on your paycheck are what we call "FICA taxes"?

• Federal Income Taxes

• State and Local Taxes

• Social Security & Medicare Taxes

• Taxes on overtime earnings

What is the primary function of a "Market Economy"?

• To provide need-based aid to individuals.

• To base economic decisions on voluntary exchange in markets governed by supply and demand.

• To withhold taxes from employees' paychecks.

• To encourage consumers to buy more and save less

What does "Opportunity Cost" refer to?

• The cost of the next best alternative use of money, time, or resources when one choice is made rather than another.

• The amount of money saved after paying taxes.

• The interest rate on a federal loan.

• The total value of a person's assets minus liabilities.

What is the purpose of a Parent Plus Loan?

• To pay for personal vacations

• To fund a parent's retirement

• To cover a student's college expenses

• To invest in stocks

What do (voluntary) Paycheck Deductions typically include?

• Payroll taxes

• 401K Retirement contributions & Health Insurance premiums

• Local Taxes

• Direct Deposit fees

What is a Planned Economy?

• An economy where prices are determined by market demand

• An economy based on random allocation decisions

• An economy that relies on a centralized government to control all or most factors of production

• An economy driven solely by private companies

What is described by the term "Scarcity" in economic context?

• The abundance of economic resources

• The unlimited wants exceeding limited resources

• The efficient distribution of resources

• The government control over resources

What is a Subsidized Student Loan (Federal)?

• A loan that must be repaid with high interest

• A loan taken out by parents to help pay for a child's education

• A need-based loan with interest paid by the U.S. Department of Education while the borrower is in school

• A loan that does not need to be repaid