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WorksheetsModule 1 Test
Total questions: 20
Worksheet time: 10mins
Name
Class
Date
1.
You choose to complete your homework rather than watch television so that you can earn a good grade. You made the choice with the lowest
a)
opportunity cost
b)
Demand
c)
Scarcity
d)
Benefit
2.
Austin earns $18,000 per year. His earnings put him in the 15% tax rate. What is his tax owed?
a)
$2,700
b)
$15,300
c)
$18,700
d)
$22,000
3.
Which tax uses the same rate for all income levels?
a)
Corporate
b)
Proportional
c)
Progressive
d)
Regressive
4.
Which label is appropriate for Column B?
a)
Cost
b)
Benefit
c)
Need
d)
Want
5.
Which tax is paid to a third party?
a)
Direct
b)
Flat
c)
Income
d)
Indirect
6.
Who would pay the most as a percentage of income under a progressive tax?
a)
Lawyer earning $110,000 per year
b)
Teacher earning $45,000 per year
c)
CEO earning $2.5 million per year
d)
Roofer earning $18,000 per year
7.
What happens as your level of education increases?*
a)
Potential wants decrease
b)
Earnings potential increases
c)
Potential expenses decrease
d)
Earnings potential decreases
8.
If an investor possesses a portfolio heavily concentrated in futures, a financial advisor would most likely suggest adding which conservative investment to diversify the portfolio?
a)
Certificates of deposit
b)
Futures
c)
Mutual Fund
d)
Stocks
9.
If an investor possesses a portfolio heavily concentrated in bank checking accounts, a financial advisor would most likely suggest which of the following aggressive investments to diversify the portfolio?
a)
A money market account
b)
An Individual Retirement Account
c)
Certificates of Deposit
d)
Stocks
10.
Which of these are loans to businesses or governments?
a)
Bonds
b)
IRAs
c)
Mutual funds
d)
Stocks
11.
One cost of going to work instead of college after graduation is
a)
the cost of tuition
b)
earning money now
c)
lower income potential
d)
on-the-job training
12.
Making a down payment on a loan often
a)
decreases monthly payments
b)
increases the loan's interest rate
c)
makes borrowers financially unappealing
d)
makes lenders uneasy
13.
Which type of credit is usually used for cars, mortgages, and student loans?
a)
Consumption credit
b)
Installment credit
c)
Secured credit cards
d)
Service credit
14.
It is important to diversify your investments
a)
because money saved in a bank is not protected
b)
in order to minimize risk and maximize return
c)
to keep your financial documents
d)
so you do not pay more taxes to the government
15.
Edward paid an annual premium of $2,000 in total coverage for his homeowner's insurance, including $250,000 in damage coverage and $250,000 in liability coverage. Six years into his policy, a tree fell on Edward's home and caused $50,000 worth of damage. Edward's insurance company paid the claim.Did the cost of the annual premiums outweigh the benefit of transferring the risk to the insurance company?
a)
No, the cost of the annual premium for six years was more than the accident claims
b)
Yes, the cost of the annual premium for six years was the same as the accident claims
c)
Yes, the cost of the annual premium for six years was more than the accident claims
d)
No, the cost of the annual premium for six years was less than the accident claims
16.
A credit card balance represents
a)
interest payments on a purchase
b)
a debt owed to a creditor
c)
cost of living
d)
a low-interest loan
17.
In a well-designed budget your
a)
expenses cover your income
b)
income is distributed equally
c)
income exceeds your expenses
d)
expenses exceed your income
18.
Which of these are fixed expenses?
a)
Mortgage, household items, clothing
b)
Health insurance, pet needs, entertainment
c)
Car insurance, rent, student loan payments
d)
Public transportation costs, gifts, medical bills
19.
The chart below compares credit card offers. What is the most significant benefit offered by Credit Card 2, relative to the other cards?
a)
No rewards
b)
Lowest fixed interest rate
c)
Unsecured credit
d)
Lowest credit limit
20.
You earn $30,000 per year, and the federal tax rate is 10 percent. Your net income is
a)
$27,000
b)
$17,000
c)
$30,000
d)
$3,000
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