Financial Literacy Test! MCQ Quiz: Trivia

The correct answer is withdrawal. The question is asking about the money that is taken from your account, which refers to the action of withdrawing funds. The other options mentioned, such as FWT-Federal Withholding Tax, Medicare Tax, and Gross Pay, are not directly related to the act of taking money out of your account.

The term "income" refers to money received on a regular basis, either from work or through investments. It encompasses all earnings and profits that an individual or entity receives, including wages, salaries, dividends, interest, and rental income. In the given options, Medicare Tax, Social Security Tax, and Sales Tax are specific types of taxes, whereas "income" is a broader term that encompasses all sources of earnings or profits. Therefore, "income" is the correct answer in this context.

The correct answer is "Balance" because it refers to the total amount of money in your account after all transactions, including deposits and withdrawals, have been accounted for. It represents the remaining funds that are available for use or investment.

A budget is a plan for saving and spending money based on your income and expenses. It helps you allocate your income towards different categories such as rent, groceries, savings, and entertainment. By creating a budget, you can track your spending, prioritize your expenses, and ensure that you are not overspending or living beyond your means. It allows you to have better control over your finances and work towards achieving your financial goals.

If you are a victim of identity theft, it is important to file a police report and alert the Credit bureaus. Filing a police report helps to document the crime and can be used as evidence when disputing fraudulent charges. It also alerts law enforcement to the situation. Alerting the Credit bureaus, on the other hand, allows them to place a fraud alert on your credit report, which can help prevent further unauthorized activity. This step is crucial in protecting your financial and personal information.

A credit card is a card issued by a bank or business that allows the holder to make purchases on credit. Unlike a debit card, which deducts money directly from a bank account, a credit card allows the holder to borrow money from the card issuer up to a certain limit. The holder can then repay the borrowed amount either in full or in installments, along with any applicable interest charges. This flexibility in payment makes credit cards a popular choice for purchasing goods and services.

If you are a victim of identity theft, it is important to take certain steps to protect yourself. Placing a fraud alert on your credit report is crucial as it notifies creditors to take extra precautions before approving any credit applications made in your name. Closing accounts that were tampered with or opened fraudulently is also necessary to prevent further unauthorized activity. Therefore, both these steps are important and should be taken if you are a victim of identity theft.

A debit card is a payment card that allows consumers to make purchases by deducting money directly from their checking account. Unlike a credit card, which allows users to borrow money and pay it back later, a debit card uses the funds that are already available in the consumer's account. This makes it a convenient and efficient way to make purchases without the need for cash or checks.

Interest refers to the additional amount of money that borrowers have to pay when they borrow funds. It is the cost of using credit and represents the extra amount charged by lenders for providing the loan. Interest is calculated as a percentage of the principal amount borrowed and is typically paid back over a specific period of time. Therefore, interest is the correct answer to the question as it accurately describes what individuals pay extra for borrowing.

Identity thieves are willing to go to great lengths to steal your identity. They may rummage through your trash or dumpster dive in order to find personal information such as bank statements or credit card offers. They may also steal your mail, which can contain sensitive information like credit card statements or Social Security numbers. Additionally, identity thieves may steal your wallet or purse, which can provide them with access to your identification documents and financial information. Therefore, all of the options listed - going through your trash, stealing your mail, and stealing your wallet or purse - are tactics that identity thieves are willing to employ to steal your identity.

A fixed expense refers to an expense that remains constant or unchanged each month, regardless of any other factors. This can include regular payments such as rent or a car payment, which are predetermined and do not fluctuate. Fixed expenses are important to consider when budgeting and planning finances as they are predictable and can help individuals manage their expenses effectively.

The cost of living, such as rent or groceries, is considered an expense for individuals. It refers to the money spent on necessary items or services to maintain a certain standard of living. Expenses are the outflows of money or resources incurred to generate revenue or support daily living. In this case, the cost of living is a regular expense that individuals need to budget for and manage in order to meet their basic needs.

The Social Security Card should be protected the most and only given out when absolutely necessary because it contains sensitive personal information, such as the individual's Social Security number. This number is crucial for various financial and government-related activities, and if it falls into the wrong hands, it can lead to identity theft and other fraudulent activities. Therefore, it is essential to safeguard the Social Security Card to prevent any potential misuse or unauthorized access to this sensitive information.

Net Pay refers to the amount of money an individual receives after taxes and other deductions have been taken out of their gross pay. It is the actual amount that the individual takes home and can use for personal expenses. FAFSA is not related to an individual's pay, but rather a form used to determine eligibility for financial aid for education. Gross Pay refers to the total amount of money earned before any deductions are taken out. Deductions are specific amounts of money that are subtracted from an individual's gross pay for various reasons such as taxes, insurance, and retirement contributions.

The correct answer is Gross Pay. Gross Pay refers to the total amount of money earned before any taxes or deductions are taken out. It is the initial amount received by an individual for their work or services, before any adjustments or withholdings are made.

ATM stands for Automated Teller Machine, which is a computerized device that allows customers to perform various banking transactions without the need for a human teller. It provides services such as cash withdrawals, deposits, fund transfers, balance inquiries, and account statements. The term "automated" refers to the machine's ability to perform these transactions automatically, without the need for manual intervention. The term "teller" refers to the machine's role in providing services that were traditionally performed by human bank tellers. Therefore, the correct answer is Automated Teller Machine.

When trust is given to another person for future payment of a loan or credit card balance, it implies that the person is extending credit to that individual. In this context, credit refers to the arrangement where someone is allowed to borrow money or use a credit card with the understanding that they will repay the amount in the future. Trusting someone with credit means that the person has faith in their ability to fulfill their financial obligations.

Monitoring financial accounts, billing statements, and credit reports are effective ways to detect identity theft. By regularly reviewing these documents and statements, individuals can identify any suspicious activity, unauthorized transactions, or unfamiliar accounts that may indicate someone else is using their personal information. Detecting identity theft early allows for prompt action to be taken, such as notifying the relevant authorities and financial institutions, freezing accounts, and resolving any fraudulent charges or accounts.

If your identity has been stolen, one of the necessary actions to take is to defend yourself. This involves taking steps to protect your personal information, such as contacting the appropriate authorities, notifying your bank and credit card companies, and monitoring your accounts for any suspicious activity. Defending yourself is crucial in preventing further harm and minimizing the potential damage caused by identity theft.

Deter means to discourage or prevent someone from doing something. In the context of the question, deter means to take actions that discourage thieves from stealing personal information. By implementing security measures and being cautious with sharing personal information, individuals can deter thieves and prevent their personal information from being available for theft.