What is income, and why is it important in personal financial planning?

• Income is the money received, and it is important for budgeting and saving.

• Income is a type of tax, and it is important for government revenue.

• Income is a loan, and it is important for debt management.

• Income is a type of investment, and it is important for wealth growth.

Which of the following are the two primary types of income?

• Earned income and passive income

• Active income and investment income

• Salary income and business income

• Rental income and dividend income

Wages are calculated based on which of the following factors?

• Hours worked and hourly rate

• Employee's age

• Company's profit

• Employee's job title

What is a salary, and how does it differ from wages?

• A salary is a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, while wages are paid by the hour or day.

• A salary is paid by the hour or day, while wages are a fixed regular payment.

• Both salary and wages are the same and are paid on a monthly basis.

• Wages are typically paid annually, while salary is paid daily.

Overtime pay is calculated based on which of the following factors?

• Regular hourly wage

• Number of overtime hours worked

• Both regular hourly wage and number of overtime hours worked

• None of the above

Which of the following best describes self-employment?

• Working for a company as an employee

• Running your own business or working as a freelancer

• Volunteering for a non-profit organization

• Studying at a university

Which is the best example of passive or unearned income?

• Income earned from a job

• Income from investments

• Income from a business

• Income from commissions

Dividends provide income to investors by:

• Increasing the value of the stock

• Paying a portion of the company's earnings

• Offering discounts on future stock purchases

• Providing tax benefits

Retirement income is important because it:

• Provides financial security in old age

• Is not necessary for everyone

• Can be ignored if you have savings

• Is only important for wealthy individuals

What are transfer payments, and how do they differ from other types of unearned income?

• Transfer payments are government payments to individuals without any goods or services being received in return, unlike other unearned income which may include returns on investments.

• Transfer payments are payments for goods and services, while other unearned income is solely from investments.

• Transfer payments are earned income, whereas other unearned income is not.

• Transfer payments are a form of tax, unlike other unearned income.