Personal Finance Unit Exam (GA Standards SSEPF1-4)

What is the main purpose of a budget?

• To track only income

• To ensure you spend all your money

• To manage income and expenses effectively

• To increase debt

Which of the following is considered an asset?

• A car loan

• Credit card balance

• A savings account

• Unpaid bills

What does a credit score measure?

• Your total income

• Your ability to manage debt responsibly

• Your savings account balance

• Your yearly expenses

Which type of interest is calculated only on the initial amount of money deposited or borrowed?

• Compound interest

• Simple interest

• Annual interest

• Fixed interest

What is an example of good debt?

• Credit card debt

• Payday loans

• Student loans

• Buying luxury goods on credit

Which of the following is a major factor in determining a person’s credit score?

• The number of credit cards they own

• Their monthly rent payments

• Their payment history

• Their yearly salary

What is the main advantage of a Roth IRA over a traditional IRA?

• You can withdraw money anytime without penalty

• Contributions are tax-deductible

• Withdrawals are tax-free in retirement

• It offers higher returns

What type of insurance helps protect you if you are unable to work due to injury or illness?

• Health insurance

• Life insurance

• Auto insurance

• Disability insurance

Which of the following is NOT a characteristic of a checking account?

• Earns high interest

• Allows for direct deposits

• Provides a debit card for transactions

• Can have overdraft fees

What is the best strategy to avoid high credit card debt?

• Only pay the minimum payment each month

• Use multiple credit cards for purchases

• Pay the full balance each month

• Ignore credit card statements