SSPFL1 CFA 1

What does it mean to say that income is a scarce resource?

• Everyone has an unlimited amount of income

• Income must be allocated because it is limited

• Income is only important for people with high-paying jobs

• Taxes do not affect how income is used

Which type of income is most associated with working a set number of hours per week?

• Salary

• Capital gains

• Dividends

• Hourly wages

How does an increase in education typically affect a person’s income potential?

• It has no effect on income

• It decreases income due to tuition costs

• It generally increases income potential by improving skills and job opportunities

• It only matters for people in medical or legal professions

What is the main difference between gross pay and net pay?

• Gross pay is after deductions, while net pay is before deductions

• Gross pay includes all income earned before deductions, while net pay is what is received after deductions

• Gross pay only applies to salaried employees

• Net pay does not include taxes

How do income taxes impact disposable income?

• They reduce disposable income by taking a portion of earnings

• They have no effect on disposable income

• They increase disposable income by adding tax credits

• They only affect people making over $100,000 per year

Which factors can influence a person’s income level? (Select all that apply)

• Education level

• Marital status

• Economic conditions

• Location

Which of the following forms can be used to file federal individual income taxes? (Select all that apply)

• W-2

• 1099-INT

• 1040

• 1040EZ

What are some of the economic factors that can lead to higher unemployment rates? (Select all that apply)

• Recession or economic downturn

• High birth rates

• Outsourcing jobs to other countries

• Advances in technology replacing jobs

• Increase in small business startups

Which of the following forms can be used to file federal individual income taxes? (Select all that apply)

• W2

• 1099

• 1040

• 1040EZ

What are some of the economic factors that can lead to higher unemployment rates? (Select all that apply)

• Recession economy

• high birth rate, lots of babies

• jobs leaving the country from outsourcing

• new business start ups