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WorksheetsIndependent Living Final Exam Review
Total questions: 66
Worksheet time: 33mins
Which of the following is NOT considered a natural resource used in the production of goods and services?
Water
Trees
Money
Oil
What is described as the mismatch of unlimited wants and needs against limited economic resources?
Economic disparity
Basic economic problem
Market fluctuation
Resource allocation
Which type of economy is characterized by consumer-driven decisions on what goods to produce?
Command economy
Traditional economy
Market economy
Mixed economy
What tends to happen to a product's price when there is heavy competition in the market?
The price increases
The price remains stable
The price decreases
The price is regulated by the government
Which of the following is considered a capital resource?
A pickup truck
A factory
Lumber
Employees
The value of the next-best alternative that you did not choose is called:
Tradeoff
Scarcity
Opportunity cost
Economic cost
When a country decides to focus on advanced technology and a skilled labor force, it is primarily answering which of the basic economic questions?
What to produce?
How to produce?
Which needs to satisfy?
Which wants to satisfy?
Personal economic freedom is most limited in a:
Command economy
Market economy
Mixed economy
Traditional economy
Which of the following is NOT a characteristic of a capitalistic economy?
Freedom of choice
Government ownership of resources
The profit motive
Competition among businesses
Which of the following is a consumer?
A business
An individual
The government
All of the above are consumers
The quantity of a good or service that consumers are willing and able to buy is called:
Supply
An economic want
Demand
An economic amount
In which of the following situations is demand MOST likely to be reduced?
Customers see a number of products they believe will satisfy a need
Customers cannot find a good substitute for a product they want
When prices for a popular product are reduced
All of the above tend to reduce demand
Which of the following would NOT be included in a measure of GDP?
Ivanhoe Publications exports $25 million of books to Ireland.
The U.S. government buys office supplies worth $30 million from The Supply Closet.
You give your car a tune-up and change the oil yourself.
You hire Larry’s Lawn Care to cut your grass once per week during the summer for $500/week.
An increase in GDP per capita means that
an economy is growing
an economy is in a recession
unemployment is too high
Individuals are not saving enough.
In the U.S., the labor force consists of all people above age ___ who are actively working or seeking work.
21
18
16
14
A period of economic recovery
is considered the high point of the business cycle
is characterized by a rise in GDP
usually causes businesses to lower production
is marked by widespread unemployment.
Where does the funding for capital projects typically come from?
Personal savings
Stock investments
Bonds
All of the above
Which type of business entity is known for selling stock?
Partnership
Corporation
Proprietorship
All businesses sell stock
What term is used to describe individuals who purchase bonds?
Debtors
Owners
Creditors
Consumers
What is the term for the total amount of money owed by the federal government?
Budget surplus
Budget deficit
Balanced budget
National debt
What is referred to as the amount owed to others?
Assets
Liabilities
Wage
Equity
What is the term for the money you have available to use from work or other income sources?
Cash inflows
Cash outflows
Net worth
Revenue
What does 'take-home pay' refer to?
Your wage times the hours you work
A report of wages earned during your job training
The amount of a paycheck after taxes and other payroll deductions
Gross income
What are considered as cash outflows in personal finance?
Amounts spent on food, clothing, transportation, and other living expenses
Cash inflows
Taxes
Estate planning
What is an IRA primarily designed for?
A tax-deferred student loan
A tax-sheltered retirement plan
An insurance payout scheme
A government grant program
What does the acronym 'SS' stand for in the context of government programs?
Social Security
Sea lions and drivers insurance
Special Services
State Security
Which of the following is NOT found on a personal balance sheet?
Rent
Telephone
Net income
Freeburg High School property taxes
Which of the following is NOT a step in the Budget Process?
Set Financial Goals
Plan Budget Categories
Maintain Financial records
Spend as little money as you can
Evaluate your budget
In which file of a filing system would you typically find birth certificates?
Personal records
Housing records
Tax records
Insurance records
Where should mortgage papers be filed in a filing system?
Housing records
Consumer purchase records
Insurance records
Money management records
Which file should contain warranties in a filing system?
Personal records
Housing records
Consumer purchase records
Investment, retirement, and estate records
What does a budget variance indicate?
A difference between budgeted and actual spending
May be a deficit
May be a surplus
All of the above
What percentage of your salary will most disability income insurance typically cover?
90 percent
60 to 70 percent
100 percent
50 percent
From where does the bulk of an average family’s net worth typically come?
Their home
Their automobile
Their jewelry
Their household items and furniture
Which of the following is an effective strategy for personal saving?
Wait until the end of the month and save whatever is left in your checking account
Save a certain percentage of each paycheck and deposit it directly into a savings account
Cover all of your wants and needs and save whatever is left over
Take out a payday loan so you can save before you receive your paycheck
All of the following statements about bank accounts are true, EXCEPT:
If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
Many banks pay interest on the money you deposit into your savings account
Historically, savings accounts earn higher returns than investments in the stock market
Money in a checking account is usually easy to access via ATM, debit card or check
What is the primary purpose of setting short-, medium-, and long-term goals in a savings plan?
To ensure you spend all your money
To motivate and guide your financial planning
To complicate your financial decisions
To avoid saving money altogether
According to the 50-30-20 rule of budgeting, what percentage of your monthly income should be allocated to savings?
50%
30%
20%
10%
Which feature is typical of a savings account?
Unlimited transactions per month
Automatic debiting with debit card use
Provides cash advances
Pays interest on the money saved
If you use your debit card at a supermarket, how is the payment typically processed?
Your credit card company covers the cost
It is deducted directly from your checking account
Your credit card provides a cash advance
It is deducted directly from your savings account
What should Jocelyn do if she notices unauthorized withdrawals and her account balance is below $100?
Wait for her monthly statement to verify the transactions
Wait a week for the bank to correct any mistakes
Check if her debit card is stolen
Contact her bank immediately as her account may have been hacked
Which transaction will immediately reduce your checking account balance?
Writing your monthly rent check
Using your debit card at the supermarket
Using your credit card for school books
Depositing a check at a bank
Which of the following statements is an advantage of online banking?
Once you set up online banking, your bank will waive overdraft, ATM, and monthly fees
Using online banking allows you to earn a higher interest rate
Using online banking, you can request transfers, pay bills and automate your savings without visiting the bank branch
You can only shop online if your bank account has online banking features
What is FDIC Insurance?
Optional coverage consumers can purchase so that their bank deposits remain safe
Insurance bank branches can buy to protect their business against fraud and scams
Required if you want to do online or mobile banking
Protection for bank customers’ deposits up to $250,000, guaranteeing their money is still available if the bank goes out of business
When signing up for a new checking account, you answer "Yes" to receive overdraft protection. On this day, you have $10 in your account and go out and use your debit card to buy lunch for $12, a movie ticket for $12 and dinner for $15. What is likely to be the outcome resulting from these transactions?
Your account will be closed
You will likely be charged an overdraft fee for one or more of the transactions and also will need to repay the bank for the amount overdrawn
Since you requested overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
Which of the following is a reason to use a savings account rather than a checking account?
Easy access to funds for daily transactions
Unlimited check writing privileges
Higher interest rates on deposits
Lower minimum balance requirements
A person-to-person payment app could be used in each of the following scenarios, EXCEPT...
Tina pays her neighbor $200 for breaking his window with a softball
Rafael writes a check to cover the entire month’s rent, and his roommates Valerie and Carlos pay Rafael for their share of the monthly rent
Ahmed's soccer coach pays the team's registration fee for a big tournament, and each player then owes him $35 for their share of the registration fee
Mia pays Cheesy Pizza Co. for a pizza she orders on their website
All of the following are benefits of using a checking account EXCEPT...
Multiple options for using funds to make payments
Checking accounts act as a good savings vehicle
Access to cash via ATMs
Your money is protected by FDIC insurance
When do you start paying income taxes?
When you turn 18
When you get a full-time job (part-time does not count)
When you make more than the minimum income requirement
When you are notified by the IRS that you are required to pay federal income taxes
Why is it important to be extremely careful when completing your 1040 form?
Making a mistake will disqualify you from receiving future refunds
The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government
Completing the 1040 incorrectly will mean the wrong amount of taxes will be withheld from your paychecks going forward
Mistakes on your 1040 form make you ineligible for employment during the next year
Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?
Social Security
Medicare
401(k) contribution
Federal income taxes
When determining whether you NEED to file a federal tax return, which of the following does NOT matter?
How much income did you earn this year?
What type of income did you earn this year?
What state do you live in?
Are you claimed as a dependent on anyone else's tax return?
Elaine just accepted a new job and is working with the company’s HR department to fill out paperwork. Which of the following steps is she responsible for?
Determine how much tax to withhold from her paychecks based on W-4 information
Complete a W-4 form
Send withholding amounts to the federal government
Complete a W-2 form
What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?
I-9
1099
1040
W-4
Which of the following statements about this W-2 form is true? Avia Consulting will use this W-2 to file their 1040 form.
James earned about $117,000 over the year based on the total of her Wages, Social Security wages, and Medicare wages
James paid state income taxes of $1,189.90
James works in the same city that Avia Consulting is based in
What is the purpose of the W-2 form as shown in the image?
To record personal health information
To provide a summary of wages and taxes withheld for an employee
To track employee attendance
To report company profits
Which box on the W-2 form indicates the total amount of federal income tax withheld?
Box 1
Box 2
Box 5
Box 12
What information is provided in Box 1 of the W-2 form?
Social Security wages
Medicare wages and tips
Wages, tips, other compensation
Nonqualified plans
When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a ________.
Withholding
Direct deposit
Deduction
Refund
What was the net (or take-home) pay for this employee for this pay period?
$335.10
$400.00
$2,680.80
$3,200
How much did this person pay towards Medicare in this pay period only?
$5.80
$24.80
$44.50
$52.20
Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?
Filing your taxes using a website is always free of charge
You are guaranteed a higher refund than if you were to use a paper form or hire a professional
If you owe money to the IRS, you receive a discount if you e-file use a tax filing website
You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online
Which of the following describes what a "dependent" is for tax purposes?
A child or adult that you support financially
Someone who is temporarily disabled
An adult who financially supports you
Someone who is a full-time student under the age of 30
If a taxpayer fills out their W-4 form incorrectly and does not withhold enough tax, what is the most likely outcome after they file their taxes?
They will receive a refund
They will owe a payment to the IRS
They will be audited
They will be charged with tax evasion
Which statement about the W-2 form is true?
A W-2 lists all the money you earned in cash over the last year
The total wages you earned from all jobs you worked in the previous year appear on one W-2 form
You need a separate W-2 form from each of your employers to file your taxes
The W-2 includes information about the interest you earned from your investments
Who among the following would NOT be required to file a tax return?
Janet, who earned $28,200 but was paid entirely in cash
Max, whose total income from three separate part-time jobs was $9,500
Isaiah, who owns his own business and generated an income of $7,000
Dani, who is a cafe barista and earned $13,000 in wages and $1,250 in tips
