Econ U2 Study Guide

Which of the following is NOT considered a fixed cost in a personal budget?

• Monthly Rent

• Health Insurance Premium

• Student Loan Payment

• Spending on a Vacation

When someone accepts a consistent, predetermined payment for their work over a set period, what are they earning?

• Wage

• Benefit

• Bonus

• Salary

What does a budget represent?

• money that is put aside

• a written agreement to pay

• a required payment

• a strategy for managing earnings

Which factors have the greatest influence on how much workers are paid?

• High supply of workers and low demand for jobs

• Employee productivity and the market price of goods

• Low demand for jobs and low product prices

• Low supply of workers and high productivity

All of the following generally lead to higher worker earnings EXCEPT

• improved production efficiency

• an increasing number of available workers

• greater company profits

• higher prices for produced goods

Maria wants to buy a new book every month, but her current budget doesn't allow for it. Which part of Maria's budget could she increase to afford a new book each month?

• Saving

• Taxes

• emergency fund

• income

Consider the reasons why banks impose overdraft fees on customers. Which of the following actions can help individuals prevent being charged overdraft fees?

• make timely car loan payments through your bank

• pay off your credit card statement balance each month

• make sure your checking account has enough funds before making withdrawals

• withdraw cash only from your bank's ATMs

After retirement, individuals may receive income from various sources such as Social Security, pensions, interest, and dividends. Which statement most accurately explains what dividend payments are?

• They are portions of a company's earnings distributed to shareholders, usually on a regular basis such as quarterly or annually.

• They are monthly payments of interest given to retirees based on their pension plan balance.

• They are withdrawals made by retirees from their retirement savings accounts accumulated during their working years.

• They are profits earned when an investor sells a stock for more than its purchase price.

After retirement, individuals may receive income from various sources such as Social Security, retirement accounts, dividends, and capital gains. Which statement most accurately explains what capital gains are?

• They are regular payments made to shareholders from a company's earnings.

• They are the earnings realized when an investor sells an asset, like stocks, for more than the purchase price.

• They are distributions from a retirement account accumulated during a person's working years.

• They are monthly interest earnings from funds held in a retirement savings plan.

What is the main function of Form 1040?

• It is used to report annual income for individuals who want to claim tax credits and deductions.

• It is used to report annual income for individuals without any dependents.

• It is used to show the difference between a person's gross and net pay for the year.

• It is used to determine deductions for people preparing to file their taxes.