(ML) Test Review Chap 4-6

In the short-run, fixed costs are easier to change than variable costs

• True
• False

In a balanced budget,

• expenses = savings.
• expenses + savings = earnings + borrowing

Most financial experts recommend that a family have fixed expenses of no more than

• 50 to 60 percent of net pay.
• 50 to 60 percent of variable expenses.

The IRS has the legal right to audit your tax returns and supporting records for ___ years from the date of filing.

• 2
• 5
• 10
• 3

Assets - Liabilities = _____________

• Discretionary income
• Net Worth
• Variable expenses

Darren writes a check to the phone company for $45.60. He should record this amount in his checkbook register in the

• Deposit/Credit column.
• Payment/Withdrawal/Debit column.
• Balance column.

The best reason to save money is to provide for future needs.

• True
• False

A typical down payment for a house is about ___ percent of the purchase price.

• 10 to 20
• 20 to 30
• 30 to 40
• 5 to 10

Financial experts say you should save _______ of your income.

• 10%
• 15%
• 20%
• 25%

Interest paid on the original principal plus accumulated interest is called

• compound interest.
• yield.
• adjustable interest.
• value-added interest.