W!SE Pre-Test

Which of the following is a good example of making a financial “trade-off”?

• skipping a few classes at school to go shopping at the mall.

• skipping a few dinners out to save for a weekend trip.

• skipping a few days of work to look for a new job.

• trading your U.S. dollars for Euros.

Your take-home pay, or net income, is __________.

• the amount you receive after benefits, such as vacation pay and health insurance, have been added.

• the amount you receive after taxes, insurance, or other costs have been subtracted.

• the total amount you earn.

• the amount of cash needed to fill one basketball net.

If the inflation rate is 3%, how will it affect the purchasing power of someone typically spending $200 on consumer goods?

• Their purchasing power will increase.

• Their purchasing power will remain the same.

• Their purchasing power will decrease.

• Their purchasing power will fluctuate unpredictably.

A person makes $500 a week and receives a paycheck of $447. The amounts of $500 and $447 represent the person’s __________ and __________, respectively.

• Gross pay; net pay.

• Net Pay; commission.

• Hourly rate; wages.

• Bonus; take home pay.

If a person increases the number of withholdings on their W4 form, their paycheck will __________.

• increase.

• decrease.

• remain the same.

• fluctuate unpredictably.

What is the potential advantage of using a direct deposit for receiving a paycheck?

• It increases the amount of deposit.

• It provides an opportunity to earn interest on the paycheck.

• It allows for quicker access to the funds compared to receiving a paper check.

• It requires a physical trip to the bank to deposit the check.

Which answer choice reflects the mandatory federal payroll deductions that are typically withheld from an employee’s paycheck?

• Social Security, Medicare, and Federal income taxes.

• Retirement, health insurance, and life insurance benefits.

• Medicaid, State, and Federal income taxes.

• Social Security, Medicare, State and Federal income taxes.

What is one potential benefit of obtaining a college degree when it comes to job opportunities?

• It may limit career opportunities to specific fields.

• It may increase earning potential.

• It may increase the chances for entrepreneurship.

• It may hinder networking and social opportunities.

You are considering two job offers: one offers a high salary and comprehensive health insurance while the other offers a similar salary, plus comprehensive health insurance, retirement benefits, and paid time off. Which financial concept should you consider to accurately compare the value of these benefits?

• Gross income.

• Net worth.

• Total compensation.

• Disposable income.

Which of the following financial objectives is an example of a SMART goal?

• I want to save money.

• I plan to buy a new car next year.

• I will save $500 each month for the next 12 months to build an emergency fund.

• I hope to become a millionaire someday.