Worksheetsfinancial literacy midterm 2025
Total questions: 64
Worksheet time: 32mins
Which of these is NOT a function of money?
a store of value
a way to make trade difficult
a unit of account
a medium of exchange
What is bartering?
bargaining for the best price
borrowing to pay off a debt
an arrangement to pay over time
the exchange of goods between two people
Which of these is a want and not a need?
shelter
health care
a baseball cap
food
Which of these is a form of earning?
wages
theft
a lottery win
an inheritance
Of the following life goals, which is typically the most expensive?
paying for college tuition
raising a child
owning your own home
saving for retirement
Unit 1
6. Which would be considered an unanticipated life expense?
A sudden medical emergency
Monthly rent payment
Planned vacation
Regular grocery shopping
Which might be found at the U.S. Department of Labor website?
information about car insurance
facts about mortgages
career resources
federal guidelines for healthcare
Which of these is a true statement?
Planning for long-term goals is not as important as determining daily expenses.
Personal ambitions and goals need to align with the financial prospects of a chosen career.
Financial security is always more important than career interest and satisfaction.
Daily living expenses must be met before you can plan long-term goals.
Which of the following is true of college?
College costs money, but community college and trade schools are always free.
College is the only way to get ahead in life.
College may help you fulfill your personal and career goals.
Attending college is a guarantee of personal happiness.
What is one difference between a Bachelor's degree and an Associate's degree?
an Associate's degree is usually free
a Bachelor's degree requires more time and credits
an Associate's degree is only offered for business subjects
a Bachelor's degree is not useful for the sciences
Which of the following best describes a certification?
an award that an organization gives for attending its classes
a diploma that is awarded by an unaccredited institution
a credential demonstrating specific skills or knowledge
a representation of a two-year degree program
Which is a significant benefit of an apprenticeship?
It enables an individual to work a full-time job and receive specialized training.
It helps an employer reduce the cost of overtime.
It allows a worker to keep working while attending night school.
It reduces a student's costs by allowing them to take online classes while they work.
How can people evaluate whether their education, career, and life goals align?
examine where they want to live in the future
analyze the costs of schooling, the career potential, and return on investment
consider whether they want to go to college
investigate whether there is growth in the jobs they want
Which of the following is NOT information needed to complete the Free Application for Federal Student Aid (FAFSA) form?
The student’s marital status
Tax records from the student’s parents or legal guardians
Where the student’s parents or legal guardians work
The student’s mailing address
The BEST post-high school option for Nova, if she wants to earn the most amount of money throughout her career, is:
Attending a four-year college and earning a bachelor's degree
Starting work immediately after high school
Enrolling in a two-year vocational program
Taking a gap year to travel
Which of the following is the biggest tax you pay?
federal income tax
state income tax
FICA Medicare tax
FICA Social Security tax
Which of the following benefits has the potential to earn you the most money?
401k or other retirement program
child care benefits
free lunch program
two weeks paid vacation time
Which employee benefits are not required by law?
family leave
minimum wage
wellness
unemployment
What is the main difference between a bank and a credit union?
Banks exist to make a profit; credit unions re-invest profit to benefit members.
Banks offer higher-yield interest rates than credit unions.
Sasha needs a bank that is open 24/7 and accessible overseas. Which bank should she choose?
local credit union
internet bank
international financial institution
savings and loan
Why are higher-interest checking and savings accounts preferable?
They give you more checks.
They hold and transfer money and offer different ways to pay.
They speed up your rate of return.
They take longer to earn you additional money.
Which of the following is NOT a method of payment using a checking account?
EFT
debit card
credit card
personal check
Adding a fixed amount to your savings each month to have in case of emergency or to save for the future is called.
emergency money
paying yourself first
a slush fund
additional savings
If $500.00 is placed in a savings account paying 10 percent per year compounded annually, what will the account balance be at the end of the year?
$550.00
$552.36
$505.00
$600.00
The highest-value alternative given up when a choice is made due to scarcity is.
opportunity cost
scarcity cost
discretionary cost
second best
The Rule of 72 is a method to determine.
the annual interest rate
how many months it will take to save the target amount
the time it will take an amount to double in value
the initial amount you should invest
A person's net worth is determined by:
Subtracting liabilities from assets
Adding assets and liabilities
Multiplying assets by liabilities
Dividing assets by liabilities
What is the purpose of a transaction register?
to record checks that have been written
to keep a running balance of your bank account
to keep track of all your deposits, payments, and purchases
all of the above
What is an advantage of being a careful consumer?
choosing brand names over generic
making the most of your money
always buying things on sale
all of the above
Which of the following is NOT a method used by careful consumers?
making a shopping list
comparing stores and prices on an item
buying a random item that is offered on special discount—today only
looking for bargain brands and bulk pricing
Which of the following shows negative cash flow?
Expenses exceed income
Income equals expenses
Income exceeds expenses
No cash transactions
What is the first step in budgeting?
calculating net monthly income
acquiring employment
finding a good budget app
examining cash flow
Which of the following would be considered a short-term savings goal?
saving for college
buying a used car
paying to attend the regional championships
buying a house
To balance a budget, it is important that ________.
fixed expenses are greater than variable expenses
income exceeds expenses
expenses are sorted into categories
transportation costs are approximately 12 percent
15. Credit is:
the ability to borrow money and pay it back later
a form of physical currency
an immediate payment for goods
a type of investment account
Which of the following do NOT involve interest payments on purchases?
personal loans
credit cards
debit cards
title loans
Spending money on items that are seen as trendy or expensive can project a certain image but .
can lead to unwanted debt
can break your budget
is always a bad idea
can make people jealous at
The root cause for a student spending more than she has is that she .
does not keep track of her spending
occasionally makes impulse buys
purchases things online
has no emergency fund
What is NOT an effect of long-term overspending?
Expenses exceed income.
Use of debt and credit increases.
Credit counseling becomes necessary.
Impulse buying occurs on a regular basis.
The NMI is used for:
it is the amount of income used to determine your monthly spending budget
is the amount of your variable expenses
it determines your fixed expenses
is your discretionary allowence
What is the amount of income remaining after all bills and obligations are paid that can be used to purchase wanted goods and services?
discretionary income
variable expenses
overconsumption
luxury spending
Which of the following is NOT addressed by consumer credit laws?
how a consumer’s credit is collected and used
information given to consumers upon agreement of loan
when and where debt collectors can contact consumers
how much a credit card company can charge in
One way to protect private information online is:
Using strong and unique passwords
Sharing passwords with friends
Posting personal details on social media
Ignoring software updates
Which of the following is a good practice for protecting your personal information online?
Switch between different internet browsers frequently.
Only share personal details with friends and family members.
Use strong passwords and change them regularly.
Always delete emails and other communications after six months.
How can a credit report help you identify suspicious activity related to your finances?
A credit report will name identity thieves who have targeted you.
A credit report will show fraudulent credit accounts opened in your name.
A credit report will indicate how you accidentally shared your private information.
A credit report will reverse unwanted or illegal charges made by others.
What is one risk involved with sharing finances with another person?
When bank accounts are jointly held, banks charge account holders higher fees and interest when it comes to borrowing money.
When bank accounts are jointly held, the names and private personal information of each account holder is shared online, which increases the risk of identity theft.
When bank accounts are jointly held, one account holder can access, spend, or transfer funds without the other account holder(s) knowledge.
When bank accounts are jointly held,
Ronaldo's mother sent him to the grocery store to buy olive oil. What should he do to ensure that he makes the smartest purchase decision?
Look for—and buy—the olive oil whose price is marked down the most.
Instead of buying olive oil, determine whether butter is a cheaper option and, if so, buy butter instead.
Compare the price (and price per volume) of several different brands of olive oil to make sure he gets the most for his money.
Select and buy the smallest bottle of olive oil that is on the shelf.
At the grocery store, Ursula decides to buy a 64-ounce carton of orange juice for 4ratherthana32−ouncecartonfor 3.20. On a cost-per-ounce basis, how much money does Ursula save?
She saves $.80 per ounce.
She saves $.06 per ounce.
She saves $.32 per ounce.
She does not save any money per ounce because the larger carton costs more.
Nico owns a large restaurant, and he is looking to buy several dozen lightbulbs. What is one way that he can maximize his buying power?
He can purchase lightbulbs that are lower in brightness from various sellers in order to limit the amount he must buy.
He can conduct research and purchase lightbulbs from a vendor that gives him a favorable price for buying in bulk.
He can find out where different vendors make their lightbulbs and move his restaurant to be closer to their factories.
He can determine which lightbulbs will look nicest with the decor of his restaurant and only work with vendors who carry that particular style of bulb.
Which of the following is an unhealthy behavior related to purchasing a good or service?
buying something to meet a want rather than a need
buying something due to peer pressure or to keep up appearances
buying something based on the recommendation or the review of another person
buying something that does not work well or that breaks quickly
Melissa wants to live in the city, where they both work, to make their commutes shorter and easier. How might Eric and Melissa handle their differences in a healthy way?
Compromise by buying a home in the city that is close to a large public park where their children can play
Do what Eric wants since the needs of children should trump the wants of adults
Do what Melissa wants since shorter commutes will allow both her and Eric to have more time with their kids
Compromise by buying a home in a distant rural area so that neither Eric nor Melissa gets his or her way
What is one way to help ensure that the financial decisions you make are informed ones?
Save enough money to be able to afford any of the options available
Focus on how products and services are portrayed in advertisements and commercials
Gather as much information as possible via research
Buy goods and services based on what you want rather than what you need.
Arianna wanted to buy a $500 prom dress, but didn't have the money. She decided to buy the dress anyway, using a credit card. She told a friend, "I'll just pay it off a little at a time." Her friend, who knew more about credit cards than Arianna, gave her a warning. Select the warning that is most accurate.
You shouldn't buy clothing on credit because clothing companies prefer cash.
If you pay off the debt over time you'll wind up spending much more than $500 because of the interest you'll owe.
If you use a credit card to buy a prom dress your credit rating will drop.
Once you use a credit card to buy a prom dress you won't be able to stop buying things.
How much should you pay on your credit card?
You should pay only the minimum payment.
You should pay as much as you can, striving to pay more than the minimum payment.
You are legally required to pay the balance in full before your grace period ends.
You should pay interest and fees plus 10% of the principle.
12. Which of the following is a type of credit card to avoid?
Credit cards with high annual fees
Credit cards with low interest rates
Credit cards with cashback rewards
Credit cards with no foreign transaction fees
Money given with the understanding that it will be paid back, typically with interest, is a.
gift
windfall
debt
loan
The following is true about loans except
sometimes you'll pay in installments
you are required to pay the money back as agreed
Some lenders allow you to default on a loan without penalty
You can get into legal trouble if you fail to pay
Which of the following is an example of desirable debt?
Nidia used a credit card to buy herself a brand name purse that she always wanted.
Leslie took out a payday loan so she could pay bills that were overdue.
Ninoska borrowed $500 from her parents to take a cruise with her girlfriends.
Silvia took out a loan to pay for tuition at her local technical college.
Which of the following is a type of credit card to avoid
a regular or "plain vanilla" card
a rewards card
a low-interest card
a subprime card
Which of the following best describes a positive contribution to net worth?
solely selling assets
solely a positive contribution to savings
an increase in debt
contributing to savings and/or an increase in asset values
Guadalupe owns a car that is worth 14,700.Shehasasavingsaccountof 4,750 and a credit card balance of $825. What is her net worth?
$19450
-$16320
$18625
$1825
Oona has a great job that pays her 110,000peryear.She′dlovetostoprentinganapartmentandbuyahouse.Shecalculatesthatshe′llneed 40,000 for a downpayment, and she already has $20,000 in her savings account. What is a SMART financial goal that Oona might set for herself?
Save another $20,000.
Borrow $20,000 so she can put a downpayment on a house that's on the market right away.
Save $500 each month to help her save enough for a downpayment in less than two years.
Save money to buy a home.
What allows money invested over the long term to grow at a faster rate than simply stashing an equal sum of money in a safe?
compound interest
tax deductions
annual fees
savers' rewards
What is one "pro" of a shared investment?
Investors can pool their resources and expertise to potentially generate greater returns.
Investors may have differing risk tolerances or long-term goals.
Investors can guarantee that their investment goals will be met.
Investors may be forced to put their money into investments that they would have otherwise avoided.
