Study Guide for Upcoming Test

What is the definition of needs?

• Basic requirements for survival and well-being.

• Desires for luxury and comfort.

• Wants that are not essential.

• Preferences for specific brands.

Which of the following is an example of a need?

• Luxury car

• Designer clothes

• Water

• Smartphone

• Vacation

4. Define wants.

• Wants are basic needs essential for survival.

• Wants are desires for goods and services that are not necessary but that we wish for.

• Wants are the same as needs.

• Wants are only related to luxury items.

Which of the following is an example of a want?

• Food

• Water

• Shelter

• Luxury car

• Clothing

A budget is a:

• Plan for managing income and expenses

• List of all debts

• Record of past expenditures

• Summary of financial goals

Expenses is defined as:

• The cost required for something; the money spent on something.

• The income generated from business activities.

• The total assets owned by a company.

• The profit earned after all deductions.

Income is described as:

• The total amount of money earned before any deductions.

• The amount of money left after all expenses are paid.

• The money received from investments only.

• The total value of assets owned.

A deposit is:

• A withdrawal of funds from a bank account

• A transfer of funds between accounts

• A sum of money placed into a bank account

• A loan taken from a bank

Which of the following is an advantage of using a credit card?

• Convenience in transactions

• High interest rates

• Limited acceptance

• Increased debt risk

Which of the following is a disadvantage of using a credit card?

• High interest rates

• Improved credit score

• Cashback rewards

• Convenience in transactions