WorksheetsConsumer Economics Final Post-Test
Total questions: 70
Worksheet time: 38mins
Which is the BEST way to avoid running out of money?
Plan and set goals for your money.
Invest in stocks and bonds.
Avoid purchases for 30 days if running low.
Save money in a bank savings account.
Calculate your net worth by subtracting your from your.
Subtract your Liabilities from your Assets.
Add your Liabilities to your Assets.
Multiply your Liabilities by your Assets.
Divide your Assets by your Liabilities.
Jeremy is surprised to find his bank balance at $15. He thought he calculated his expenses correctly. He's upset with his parents for making him pay for a broken TV remote and worries about borrowing money to go to the movies with friends.
Constantly blaming others if things don't go your way
Attributing other peoples success to luck
Assuming that you are always correct
Fear of Missing Out (FOMO)
Sunken Cost Fallacy
What is essential to know for managing personal finances?
How earning, budgeting, saving, spending, and giving affect your money.
How to make bank deposits using registers.
How investing in stocks defines your portfolio.
How consumer decisions affect your accounts.
If your assets are more than your liabilities, your net worth is ______.
Positive
Negative
Zero
Neutral
What is the first step to overcoming cognitive bias?
Make different choices than your first thought.
"Trust your gut" when deciding.
No need to overcome cognitive bias.
Acknowledge they exist and you have them.
Which of the following is a Cognitive Bias in financial decisions?
It Won't Be That Bad (IWTBT)
No Fun, Only Save (NFOS)
Fear of Missing Out (FOMO)
Cross Your Fingers and Hope (CYFH)
Select all statements necessary to control your personal finances.
Your financial goals.
Your income.
Your financial advisor's phone number.
A plan to reach your goals.
Your expenses.
What are the best reasons to save money?
To Invest, indulge, and influence others.
Afford your dream home, car, and vacation.
For emergencies, large purchases, and building wealth.
Buy gifts, donate, and save for kids' college.
Michael Page is 22 and a recent college graduate. He just got his first job as an accountant with an income of 35,000. He plans to buy a 3-year-old Honda Accord and share an apartment, paying 595 in rent per month. He also has student loans to pay off in five years. Michael wants to start off “right” financially.
The first thing that Michael should do is set up a monthly______________.
Budget
Income Statement
Balance Sheet
Income Evaluation
Michael needs an emergency fund that covers at least _______________ of his income.
1 Year or more
3-6 months
7-12 Months
1-2 Months
Why is tracking your expenses important?
It isn’t important in the long run.
It helps you pull money from savings to spend in other categories when you run out.
It shows if you’re sticking to your budget.
It allows you to delete budget categories you don’t like.
Why is budgeting so important?
To ensure all your money is spent by month-end.
To control your money and ensure future financial success.
To justify unnecessary purchases.
To improve math skills.
Which is NOT part of a budget?
Expenses
Saving
Income
Credit Score
Withholdings and deductions are _________
Money that the government gives back to you
Examples of deficit spending
Expenses taken out of your paycheck
Categories of a good budget
What is the tax on buying goods or services called?
Goods and Services tax
Purchase tax
Income tax
Consumption tax
What is a fixed, annual rate of pay that doesn't change with hours worked?
Salary
Side Hustle
Hourly Wages
Commission
Match the item with the correct type of tax: Your paycheck: __________
Income Tax
Sales Tax
Property Tax
Excise Tax
Match the item with the correct type of tax: The house you own: __________
Property Tax
Income Tax
Sales Tax
Excise Tax
What type of tax do you pay on groceries?
Sales Tax
Income Tax
Property Tax
Excise Tax
Match the item with the correct type of tax: The clothes you buy: __________
Sales Tax
Property Tax
Income Tax
Excise Tax
Match the following item with the correct type of tax: Money inherited from parents: __________
Inheritance Tax
Sales Tax
Property Tax
Income Tax
Match the item with the correct type of tax: Gas for your car: __________
Excise Tax
Income Tax
Property Tax
Sales Tax
There are two types of taxes: on money you ______ and on money you ______.
1. spend, 2. earn
1. borrow, 2. save
1. invest, 2. donate
1. lend, 2. receive
Juanita earns $12/hour and works 50 hours a month. Her withholdings are Social Security (6.2%), Medicare (1.45%), and federal income tax (10%). What is her approximate net pay?
$600
$500
$120
$700
What was John Smith's net pay for this pay period?
A. 2680.80
B. 3,200.00
C. 400.00
D. 335.10
Which cost is hardest to reduce?
Car loan payment
New clothes
Dining out
Big-screen TV purchase
You earn a salary of 40,000peryearandsave20 16,000 emergency fund. How long will it take?
6 Months
1 Year
2 Years
3 Years
Your monthly net pay is $2,500, and your expenses are $2,625. Which is TRUE?
You can invest in a retirement fund, as your expenses are within budget
You have an extra $125 each month for leisure
You need to cut spending or find more income to balance your budget
You can donate to charity
Danaisha spends 325 monthly on organic groceries. Charles spends 195 by buying in bulk and using coupons. Who is budgeting correctly?
Danaisha, because she is focusing on her health, which will have a guaranteed payoff in the long run
Charles, because he's taking efforts to save money by focusing on his needs only
Both, because needs vs wants are determined on an individual basis
Neither, because they should meet in the middle somewhere. Charles should focus more on health, and Danaisha should cut her spending.
Juan has $1,000 and wants to earn the highest interest rate without needing access to the money for years. Which account type is best?
Certificate of Deposit
Regular savings account
Money Market account
Checking account
According to the 50-30-20 budgeting rule, allocate 50% of your income to ______, 30% to ______, and 20% to ______.
needs, wants, savings
wants, needs, savings
savings, needs, wants
needs, savings, wants
When is the BEST time to start saving for retirement?
At age 45, with 20 years until retirement
After paying off student loans
When you have your first full-time job
Once all debts, including credit cards, auto loans, and mortgage, are paid off
Accumulate enough to cover 3 to 6 ________________ of expenses in your emergency fund.
Days
Weeks
Months
Years
How does investing in stocks differ from saving in a bank account?
Investing is always less risky than saving
Investing helps build retirement wealth; saving is for short-term needs
Investing earns 1-2%; saving earns 5-7%
Investing is for emergencies; saving is for long-term
Which statement is TRUE about compound interest?
A. Compound interest is difficult to calculate, so those who use it earn higher profits
B. Compound interest directly impacts fees
C. Compound interest means a fund manager compounds returns without a fee
D. Compound interest lets you earn interest on your savings and on the interest earned
You bought 10 shares of stock in StreamingVideoCo for 45 per share. Two months later you sold the 10 shares of stock for 80 per share. What was your profit or loss?
Profit of $350
Profit of $800
Loss of $800
Loss of $450
Which statement BEST describes the relationship between risk and return in investments?
A. Investors expect higher returns from high risk assets
B. Investors expect lower returns from high risk assets
C. Investors expect zero return from low risk assets
D. Investors expect higher returns from low risk assets
How can someone make money from a stock?
Sell the stock for the same price
Sell the stock for a lower price
Stock loses value but market gains
Receive dividends or sell at a higher price
Why is diversification recommended in investing?
Diversification guarantees no loss
Fund managers charge lower fees for diversification
Diversification ensures high returns
Diversification reduces risk
Which statement is true about debit cards, prepaid debit cards, and credit cards?
All 3 cards are completely different
Debit cards and prepaid debit cards are the same
Debit cards and credit cards are the same
All 3 cards are completely the same
When loans are amortized, monthly payments are ________, while the amount of your monthly payment applied to interest ________ and the amount of your monthly payment applied to the principal ________ over time.
Taylor has $5000 for a down payment on a car costing $35,000. To have the lowest monthly payments, what should she do?
Put $0 down and choose a short-term loan
Put $2500 down and choose a short-term loan
Put $3500 down and choose a long-term loan
Put $5000 down and choose a long-term loan
What is an advantage of using a credit card?
Credit cards usually have low interest rates (less than 5%)
Using a credit card does not affect your credit score
It prevents overspending by linking to your checking account
You can make emergency purchases without immediate funds
A shorter loan term results in ______ monthly payments and ______ total interest.
higher, less
lower, more
higher, more
lower, less
Which of the following is NOT a good strategy for building credit as a young adult?
Open and use a secured credit card
Become an authorized user on a credit card used by your parent or guardian
Open a credit card, with your parent or guardian as a cosigner
Take out a payday loan
Amy and Chuck each buy a house for 250,000. Amy's mortgage is $400 more per month than Chuck's. Which statement COULD explain this?
Chuck chose a shorter term, so his payments are lower
Amy made a larger down payment, so her payments are larger
Chuck has a lower credit score, so his interest is lower
Amy chose a shorter term, so her payments are higher
What is a down payment?
The first year's worth of property taxes, held in reserve
A specific type of tax advantaged bank account used for saving money to buy a house
A large sum of money you pay when taking out a mortgage so that the principal of your loan is smaller
A prepayment to a real estate agent so that they will start helping you house hunt
Dan has a credit card with a $1000 credit limit. His outstanding balance is $800. What is the maximum amount he can now spend?
$200
$800
$1000
$1800
Which statement best describes a savings account?
This account pays you interest on money you have put away for later to help your money grow
This account offers a convenient way to pay bills and access cash from an ATM
This account is automatically debited when you use a debit card
This account typically allows an unlimited number of transactions per month
You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?
Checking Account
Investment Account
Credit Card Account
Savings Account
Jocelyn gets a text alert from the bank that her account balance has dropped below 100afteraseriesof 20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?
Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
Wait a week as it is fairly common for the bank to catch mistakes like this
Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry
Contact her bank immediately as it appears that her account may have been hacked
Which of the following transactions will REDUCE your checking account balance immediately?
Writing your monthly rent check which you will mail tomorrow
Depositing a check at a local bank branch
Using your credit card to pay for your school books
Using your debit card to pay for groceries at the supermarket
When signing up for a new checking account, you answer "NO" to receive overdraft protection. On this day, you have 10inyouraccountandgooutanduseyourdebitcardtobuylunchfor 12, a movie ticket for 12anddinnerfor 15. What is likely to be the outcome resulting from these transactions?
Since you requested overdraft protection, the bank will not allow you to overdraw your account so your debit card will be denied
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
The bank will provide you five days to add funds to your account to cover the overdraft and no fees will be assessed
How often do customers typically receive a bank statement for their checking account?
Daily
Weekly
Monthly
Yearly
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
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
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
Direct deposit typically refers to your ______ sending your ______ electronically to your bank account. (Fill in the blanks)
1. employer 2. paycheck
1. friend 2. gift card
1. bank 2. statement
1. landlord 2. rent
What is an insurance premium?
An added cost you pay in order to receive higher-quality services
Your monthly payment to your insurer, regardless of whether you use any services
The amount you pay out-of-pocket for a specific procedure or service
A list of the procedures covered by your insurance carrier
Which term refers to the percentage of covered medical expenses you are responsible for paying after your deductible is met?
Premium
Deductible limit
Co-insurance
Out-of-network fees
When setting your premium, your car insurance company may consider each of the following EXCEPT...
Your driving record
How many miles you drive per year
Your height
Your age
Your renter's insurance policy costs 20/monthandhasa 1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?
$0
$200
$800
$1,000
Someone broke into Sam's car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?
Comprehensive
Property liability
Collision
Bodily injury liability
You cause an accident and injure the other driver. The case goes to trial and there is a verdict to compensate the injured person with 58,000.Youhavea 75,000 coverage limit per person for Bodily Injury. How much will the insurance company pay?
$0
$17,000
$58,000
$75,000
Frank has an auto policy with a coverage limit of 30,000andadeductibleof 1,000. He gets into an accident and the damages to his car total $6,200. Fortunately, he has collision coverage. How much will Frank need to pay out-of-pocket?
$0
$1,000
$6,200
$30,000
What is the primary purpose of a budget?
To plan and manage your financial resources
To calculate your annual tax return
To track your daily activities
To determine your credit score
Which of the following is a benefit of having a high credit score?
More frequent credit card offers
Higher interest rates on loans
Increased tax liabilities
Lower insurance premiums
What is the main advantage of a Roth IRA compared to a traditional IRA?
Withdrawals are tax-free in retirement
Contributions are tax-deductible
Immediate access to funds
Higher contribution limits
What is the primary purpose of an emergency fund?
To pay off credit card debt
To invest in stocks
To save for a vacation
To cover unexpected expenses
Which of the following is a fixed expense?
Groceries
Dining out
Rent
Entertainment
What is the benefit of having a diversified investment portfolio?
It increases tax liabilities
It reduces the impact of market volatility
It eliminates all risks
It guarantees high returns
