Financial Responsibility Quiz

Devonta usually makes smart spending choices, but he never has enough money to make large purchases, such as a new computer. How can Devonta responsibly get enough money to buy a computer and avoid additional costs?

• apply for a bank loan

• apply for a line of credit

• stop paying his bills

• save money each week

Victor unexpectedly lost his job as a chef at a local restaurant. What would be the MOST responsible way for him to revise his budget until he finds a new job?

• only paying a few of his monthly bills

• increase his spending on entertainment

• identify nonessential expenses he can eliminate

• stop saving money that he does not need to spend

For your school’s homecoming dance, your parents have agreed to give you $75 for your outfit. You know this is enough money to provide what you need, but not what you want. You decide to use your credit card to purchase everything you want, and the total bill is $187.00. It will take you at least four months to pay off the bill. Why would it have been a better finance decision to stay within your parents’ budget?

• Very often, cash can be lost or stolen.

• You can build a good credit history using a credit card.

• You have gone into debt and will have to pay interest.

• A credit card is easy to carry and accepted at most stores.

Which is an example of income?

• a loan a struggling business owner receives

• a paycheck a retail store employee receives

• interest charged on purchases made with a credit card

• credit extended to a consumer looking to buy a computer

Which answer choice BEST describes credit?

• money received in exchange for labor

• money loaned to a person to make purchases

• money earned as income on a savings account

• money set aside in case of emergencies

Why is it important to create and follow a personal budget?

• Budgets help reduce the prices of goods.

• Budgets help people earn more money.

• Budgets help reduce people's taxes.

• Budgets help people manage their money.

Trace has just gotten an unexpected promotion at work with a higher salary. What would developing a personal budget enable Trace to do?

• avoid having to save money for future expenses

• purchase all of the goods and services that he wants

• lower the amount of taxes he is required to pay on the income he receives

• determine what he must set aside for expenses and what amount he can save

Which of the following is a major drawback of buying an item with a credit card rather than with cash?

• The payment will hurt the cardholder's credit score.

• The charge will result in additional taxes.

• The payments must be made in monthly installments.

• The charge may result in interest payments.

In what way would Malia likely increase the value of her money the MOST if there were no risk involved in any option?

• by depositing her money in a bank

• by purchasing goods with her money

• by storing her money in a safe at home

• by investing her money in the stock market

A purchase made with which of the following may cost a buyer significantly more than the actual purchase price?

• cash

• check

• debit card

• credit card