5.2 Personal Finance 1-5 Vocab Quiz

What function is money serving when it facilitates transactions between individuals, businesses, financial institutions, and governments in an economy?

• Store of value

• Medium of exchange

• Unit of account (Standard of value)

• Spending

What function of money allows us to compare prices and determine whether we have enough in our account to make a particular purchase?

• Store of value

• Medium of exchange

• Unit of account (Standard of value)

• Spending

What function of money is the belief that money saved today will have the purchasing power to buy similar goods and services in the future?

• Store of value

• Medium of exchange

• Unit of account (Standard of value)

• Spending

What is the yearly interest rate applied to a loan or credit card?

• Credit interest rate

• Federal funds rate

• Personal credit rate

• Annual percentage rate (APR)

What type of taxes increase as the amount of your income increases?

• Progressive taxes

• Regressive taxes

• Proportional taxes

• Capital gains

What is the action or process of gradually writing off the initial cost of an asset?

• Simple interest

• Compound interest

• Variable interest rate

• Amortization

Which of the following savings accounts is meant to help families save for education expenses for their children by allowing them to put a certain amount in this tax-deferred savings account?

• Individual retirement account (IRA)

• 529 account

• 401k

• 403b

What is the term that means that a certain interest rate is guaranteed for a period of time- NOT the duration of the loan?

• Fixed interest rate

• Simple interest rate

• Compound interest rate

• Variable interest rate

Which type of account is specifically designed to help individuals save for retirement with tax advantages?

• 401k

• Individual retirement account (IRA)

• 403b

• 529 account

What is the term for the interest rate that can change over the duration of a loan or credit agreement?

• Variable interest rate

• Fixed interest rate

• Simple interest rate

• Compound interest rate