WorksheetsUnit 2 Review
Total questions: 29
Worksheet time: 58mins
Which of the following best describes discretionary spending?
Discretionary spending is the same as net income.
Discretionary spending is the money that must be paid.
Discretionary spending is what is left after taxes, other deductions, and mandatory obligations are subtracted from your gross pay.
Discretionary spending refers to the money spent at a person’s own discretion, specifically on food or entertainment.
Which of the following is the best explanation for the ultimate purpose of money?
Money exists to simplify exchanges.
Money exists because people want to accumulate it, thus creating a demand.
Money is nothing more than an IOU from the government.
Money has intrinsic value and worth.
Money has value based on what can be purchased with it.
Hunter was very interested when his friend, Leo, was trying to sell his Xbox. Leo was only asking $75 for the console and two controllers. If Hunter closes the deal, according to the nature of exchange, what is the agreed value of the items?
They are worth around $200, and Hunter got a great deal.
The exact price can’t be determined because it is relative. They are worth more than $75 for Hunter, but at the time, they were worth less than $75 for Leo.
Hunter and Leo can’t determine the worth of the used items because they didn’t compare the costs of the used items and new items.
The market determines the value of the items based on supply and demand, so it doesn’t matter what value Hunter or Leo give them.
What is the key to long-term budgeting success?
You have to form the habit of budgeting then adjust your spending habits
Adjust spending habits then set a budget based on the adjustments
Include bills in budgeting plans
Make dramatic changes
Sasha is utilizing the envelope budget in an effort to build better habits. Her next paycheck doesn’t come for another three days, but she has already spent all of her grocery money. On her way home, she noticed that the local grocery store had spare ribs on sale for $0.50 a pound. Sasha could not pass that up. Which of the following options does she have if she is going to stick to the envelope budget?
Withdraw cash from her savings account
Pass on the sale and stop spending money on groceries
Use her debit card and just take less money out of her account next time
Use her credit card and pay it off later
Which of the following best describes intrinsic value?
The price at which an item is bought or sold for
The value an individual gives an item for personal reasons
An item’s worth in comparison to something else
The extent to which a person wants or needs an item
Which of the following is a fixed expense?
Netflix subscription
Groceries
Gasoline
Entertainment
Which of the following is a major advantage that comes from paying for things with cash?
You can only spend what you have.
Excessive spending is more likely to occur if a larger bill must be broken for a minor purchase.
People tend to buy more things when using cash.
If a person runs out of cash, she can easily make a withdrawal at an ATM.
Which of the following best describes relative value?
The price at which an item is bought or sold for
The value an individual gives an item for personal reasons
An item’s worth in comparison to something else
The extent to which a person wants or needs an item
Which of the following best describes a living wage?
The amount of money a person must earn to live above the poverty line
A wage that supports an average standard of living
The median income across the country
The wages a person needs to pay for housing in his state
True or False: When a monthly budget is based on a percentage of income, categorical spending amounts fluctuate with the income.
True
False
When making a budget, how should a person treat monthly bills he is obligated to pay?
Each individual bill should have its own category.
It is best to combine all of the bills into one category for a budget.
Bills should not be included in a budget. A budget should manage the money available after bills are paid.
Money can be spent at his discretion, then whatever is left over is used to pay bills.
Which of the following is a factor the United Nations uses to determine a country’s standard of living?
Male to female ratio
Average weight
Climate
Expected education level
True or False: Gradual change is typically more effective in the long run compared to dramatic changes.
True
False
Which of the following best describes monetary value?
The price at which an item is bought or sold for
The value an individual gives an item for personal reasons
An item's worth in comparison to something else
The extent to which a person wants or need an item
Budgeting is not just about monitoring spending. More than anything else, effective budgeting involves ________.
Building savings
Managing credit
Breaking old habits
Behavior modification
Sven spends money recklessly, and he has reached a point at which he wants to make a budget. He has never budgeted and wants to do it right, so the changes are long lasting. Sven's very first budget should be based on ________.
A percentage of his gross income
His current spending habits
Whatever he feels the right amounts are
80 percent of his discretionary income
Dramatic change typically leads to permanent change.
True
False
Kendra works as a salesperson at a seasonal market. During the Christmas season, she gets a 10 percent commission on every tree she sells. If she sold 5 trees today, with an average sale price of $30 per tree, what amount of commission will she make?
She'll get a free tree
$12
$15
$20
Cassandra is in the market for a new bicycle. She has found two on sale. The first is $125 with a 20 percent discount but must be assembled. The second is $150 with a 30 percent discount and is already assembled. Which of the following describes the best decision for Cassandra?
Cassandra buys the second bicycle because she thinks the extra $5 is worth not having to do the assembly.
Cassandra buys the first bicycle because it is significantly cheaper.
Cassandra buys the second bicycle because it is cheaper due to the better sale, and she doesn’t want to assemble a bicycle.
Cassandra buys the first bicycle because she likes the way it looks.
Lauren decided as a freshman that she wanted to go on a really cool trip after graduation. She invested her savings in her dad’s mutual fund. Her initial deposit was $300, and she has earned 8 percent interest over the last four years. What amount of interest did Lauren earn while in high school? (use simple interest formula)
$24
$52
$96
$103
The trick to making smart financial decisions is removing emotion and looking at the numbers first.
True
False
A student's academic performance can impact their in-class paychecks
True
False
Mimic Personal Finance pauses when students are not in school. Consequently, they do not have to worry about paying bills.
True
False
How do you calculate interest?
Loan amount x Interest rate
Interest rate x Loan Term
Loan Term x Interest Rate x Number of Years
Loan Amount x Interest Rate x Loan Term
Which of the following is correct regarding the 50/30/20 method?
50% of your after tax money goes to savings, 30% to luxuries/wants, 20% to living expenses
50% of your after tax money goes to living expenses, 30% to luxuries/wants, 20% to savings
50% of your after tax money goes to luxuries/wants, 30% to savings, 20% to living expenses
50% of your after tax money goes to living expenses, 30% to savings, 20% to luxuries/wants
In which budgeting method do you set aside money for personal long-term financial goals before allocating any funds to obligations or living expenses?
Envelope system
50/30/20 method
Pay-yourself first method
Zero-balance budget method
Which budgeting method eliminates free spending which reinforces non-budget habits?
Envelope system
50/30/20 method
Pay-yourself first method
Zero-balance budget method
Which budgeting method makes spending money a physical action instead of an electronic action?
Envelope system
50/30/20 method
Pay-yourself first method
Zero-balance budget method
