FINAL REVIEW ECONOMICS

The table below lists characteristics of money market savings accounts and traditional savings accounts. Indicate whether the characteristic describes money market savings accounts, traditional savings accounts, or both. Select ONE correct answer in each row.

• Money Market Savings Accounts

• Traditional Savings Accounts

• Both

A parent is researching loan options to pay their child’s college tuition and is considering applying for a PLUS loan. Under which circumstance might the parent’s PLUS loan application be denied?

• Lack of home ownership

• A recent bankruptcy or foreclosure

• Annual salary or wages below the median income level

• Outstanding loans totaling more than fifteen percent of annual income

An undergraduate student is applying for a student loan to pay for tuition. What benefit makes a subsidized loan more attractive compared to an unsubsidized loan?

• Subsidized loans offer higher annual borrowing limits than unsubsidized loans.

• Subsidized loans allow the student to avoid interest payments during his time in college.

• Subsidized loans require a higher credit score than unsubsidized loans, ensuring a lower interest rate.

• Subsidized loans are more appropriate for undergraduate loans than graduate loans.

Which status would immediately make a student ineligible for a FAFSA application?

• The student’s parents have already paid the cost of tuition.

• The student has received a GED rather than a high school diploma.

• The student is a permanent resident of the US, rather than a citizen.

• The student’s parents’ income is greater than the US median annual income.

What are TWO important steps to complete when first beginning to budget for purchasing a house? Think about the question carefully. Then record your answer in the space provided.

What are the benefits of renting a home instead of buying a home? Select TWO correct answers.

• Renting protects consumers from poor credit.

• Renting ensures state and federal assistance for tenants.

• Renting requires that less money be paid in the short term.

• Renting allows consumers to have much greater tax benefits.

• Renting enables consumers to move between homes more easily.

Select ONE correct answer in each box to complete each sentence. Expansion of the housing market requires both an increase in available housing and the involvement of ______ to protect buyers’ rights in the long term from market fluctuations.

Select ONE correct answer in each box to complete each sentence. Homeownership can lead to wealth accumulation over time, but would-be buyers must first have both personal savings and an understanding of what ______ are available in the event of a financial emergency.

Huyen is 30 years old and works as a software engineer. Huyen has no current health problems and earns $200,000 annually. In which scenario would she benefit from MOST by paying for long-term care insurance?

• If she got sick and had to miss three weeks of work.

• If she broke her hip falling in the parking lot at work next year.

• If she injured her back in a car accident and had to work from home for several months.

• If she suffered an illness that made it impossible for her to work for several years.

Two drivers are about to sign up for a new insurance policy. Each driver is attempting to lower their insurance premiums. Which driver has the advantage in each criterion shown in the table below? Select ONE correct answer in each row.

• Driver A

• Driver B