WISE Financial Literacy Certification Test - Topic Check List

What are some sources of income?

• Wages, rentals, interest, capital, profits, investments, entrepreneurship

• Only spending and saving

• Borrowing and lending only

• Donations and gifts only

What is an exemption (aka an allowance) and how does it work?

What does liquidity mean and what products are considered liquid?

• Liquidity is the degree of ease in which assets can be sold.

• Liquidity is the process of increasing the value of an asset.

• Liquidity refers to the ability to create new assets from old ones.

• Liquidity is the measure of how much profit an asset generates.

How do gift cards work and what may happen after 12 months of inactivity?

What is discretionary income or a budget surplus?

What is a money order and why are they considered high risk for counterfeits?

Why does the U.S. currency have value even though it is not tied to a commodity?

• There is a belief that money has value and therefore is accepted.

• It is backed by gold reserves in Fort Knox.

• It is directly exchangeable for oil.

• It is made from precious metals.

What is opportunity cost?

• Opportunity cost is the next best alternative – it is what is given up when a choice is made.

• Opportunity cost is the total amount of money spent on a project.

• Opportunity cost is the profit earned from an investment.

• Opportunity cost is the amount of resources available for use.

Who is hurt the most and the least with inflation?

What is the role of the Treasury Department?

• The Treasury Department collects taxes, prints money, and issues treasury bonds.

• The Treasury Department enforces federal laws and prosecutes cases.

• The Treasury Department manages the country's armed forces.

• The Treasury Department oversees the nation's public education system.