Financial Literacy Quiz Part 1

What is an example of a source of income?

• Wages

• Expenses

• Taxes

• Loans

How does an exemption (allowance) work?

• Increases taxed income

• Reduces taxed income

• Eliminates taxed income

• Has no effect on taxed income

What does liquidity refer to?

• The ease of converting assets to cash

• The difficulty of selling assets

• The value of assets

• The risk of holding assets

What is a money order?

• A type of loan

• A payment order for a pre-specified amount

• A credit card transaction

• A bank deposit

Why does the U.S. currency have value?

• It is tied to gold

• It is tied to silver

• It is accepted and trusted

• It is backed by oil

What is opportunity cost?

• The cost of a missed opportunity

• The next best alternative given up

• The financial cost of a decision

• The benefit of a decision

Who is most hurt by inflation?

• Borrowers

• Lenders and people on fixed incomes

• Investors

• Business owners

What does "Pay Yourself First" mean?

• Spend money before saving

• Save money before spending

• Pay bills before saving

• Invest money before saving

Which institutions give loans?

• Grocery stores

• Banks, credit unions, pawnshops

• Restaurants

• Clothing stores

What is a credit union?

• A government bank

• A member-owned co-operative financial institution

• A private investment firm

• A type of insurance company