Personal Financial Planning Final
Personal Financial Planning Final for Spring Semester 2012. High School Course.
Questions and Answers
- 1.
Which of the following would be considered a variable cost in owning a vehicle?
- A.
Interest on your car loan
- B.
Insurance for your car
- C.
Paying the state registration fee and license fee
- D.
Oil Changes and Tire Rotations
Correct Answer
D. Oil Changes and Tire RotationsExplanation
Oil changes and tire rotations would be considered variable costs in owning a vehicle because they vary based on usage and wear and tear. The more you drive and the longer you own the car, the more frequently you will need to change the oil and rotate the tires. In contrast, interest on a car loan, insurance, and state registration and license fees are typically fixed costs that do not change based on usage or time.Rate this question:
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- 2.
What is the term that is used to describe the declining value of a new car once you drive it off of the car lot?
- A.
Depreciation
- B.
Appreciation
- C.
Variable Costs
- D.
Unique Costs
Correct Answer
A. DepreciationExplanation
Depreciation is the term used to describe the declining value of a new car once it is driven off the car lot. This occurs because as soon as the car is sold, it is considered a used car and its value decreases. Depreciation is a common factor that affects the resale value of vehicles and is an important consideration for car owners and buyers.Rate this question:
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- 3.
What percentage should you never borrow more than of your yearly net income? In other words, what percentage should you never rise above in order to buy something?
- A.
50% of your yearly net income
- B.
20% of your yearly net income
- C.
70% of your yearly net income
- D.
5% of your yearly net income
Correct Answer
B. 20% of your yearly net incomeExplanation
You should never borrow more than 20% of your yearly net income in order to buy something. This percentage ensures that you have enough income left to cover your other expenses and save for the future. Borrowing more than this can lead to financial strain and difficulty in repaying the debt.Rate this question:
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- 4.
What does A.P.R. stand for in terms of financing?
- A.
Annual Percentage Rate
- B.
Annual Partnership Reduction
- C.
Auxiliary Payments Retention
- D.
Annual Participatory Rate
Correct Answer
A. Annual Percentage RateExplanation
The correct answer is Annual Percentage Rate. The term A.P.R. stands for Annual Percentage Rate in terms of financing. The A.P.R. is a measure of the cost of borrowing, expressed as a yearly interest rate. It includes not only the interest rate on the loan but also any additional fees or charges that may be associated with the loan. The A.P.R. allows borrowers to compare different loan options and understand the true cost of borrowing.Rate this question:
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- 5.
What is the best explanation of an as-is warranty?
- A.
Represents no warranty on your car
- B.
Is a dealer warranty
- C.
Is considered one of the safest warranty's with regards to cars
Correct Answer
A. Represents no warranty on your carExplanation
An "as-is" warranty means that there is no warranty provided for your car. This means that the seller does not guarantee the condition or performance of the car, and any issues or repairs that may arise after the purchase are solely the responsibility of the buyer. It is important for buyers to thoroughly inspect the car and consider getting a third-party inspection before purchasing a vehicle with an "as-is" warranty, as they will have no recourse if any problems arise.Rate this question:
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- 6.
What does comprehensive insurance cover when buying car insurance?
- A.
Pays for damage caused by vandalism, hailstorms, floods, theft
- B.
Pays for damage when you hit another person's car
- C.
Pays for nothing
- D.
Pays for speeding tickets
Correct Answer
A. Pays for damage caused by vandalism, hailstorms, floods, theftExplanation
Comprehensive insurance provides coverage for various damages to your car that are not caused by a collision. This includes damages caused by vandalism, hailstorms, floods, and theft. It is important to have comprehensive insurance to protect your vehicle from these types of non-collision related damages.Rate this question:
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- 7.
Which of the following does not determine your car insurance rates?
- A.
Marital Status
- B.
Geographic Location
- C.
Vehicle Characteristics
- D.
Driving Record
- E.
None of the Above
Correct Answer
E. None of the AboveExplanation
The correct answer is "None of the Above." This means that all of the options listed (Marital Status, Geographic Location, Vehicle Characteristics, and Driving Record) can potentially determine your car insurance rates.Rate this question:
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- 8.
Which governmental entity is in charge of handling and processing your income taxes?
- A.
Department of Homeland Security
- B.
Internal Revenue Service
- C.
Wall Street Banks
- D.
Department of Health and Human Sciences
Correct Answer
B. Internal Revenue ServiceExplanation
The correct answer is the Internal Revenue Service (IRS). The IRS is the governmental entity responsible for handling and processing income taxes. They enforce tax laws, collect taxes, and provide taxpayer assistance and education. They play a crucial role in ensuring that individuals and businesses comply with tax regulations and contribute to funding government programs and services.Rate this question:
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- 9.
What is a property tax?
- A.
A tax on something you own such as a home or boat
- B.
An income tax meant to boost sales taxes
- C.
A federal government tax
Correct Answer
A. A tax on something you own such as a home or boatExplanation
Property tax is a tax levied on the ownership of certain properties, such as homes or boats. It is a form of taxation that is based on the assessed value of the property and is typically collected by local governments. The purpose of property tax is to generate revenue for local municipalities to fund public services and infrastructure. It is not an income tax or a federal government tax, but rather a specific tax on the ownership of tangible assets.Rate this question:
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- 10.
What tax is also known as the "death tax" and is placed on wills of $2,000,000 and higher?
- A.
Proportional Income Tax
- B.
Regressive Income Tax
- C.
Sales Tax
- D.
Estate Tax
Correct Answer
D. Estate TaxExplanation
The correct answer is Estate Tax. Estate tax, also known as the "death tax," is a tax that is imposed on the transfer of the estate of a deceased person. It is applicable to estates with a value of $2,000,000 and higher. This tax is levied on the total value of the estate before it is distributed to the beneficiaries.Rate this question:
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- 11.
What type of income tax system is used in the United States of America today?
- A.
Regressive Tax System
- B.
Progressive Tax System
- C.
Proportional Tax System
Correct Answer
B. Progressive Tax SystemExplanation
The United States of America currently uses a progressive tax system. In this system, the tax rate increases as the individual's income increases. This means that individuals with higher incomes pay a higher percentage of their income in taxes compared to those with lower incomes. This system is designed to be more equitable, as it places a greater burden on those who can afford to pay more.Rate this question:
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- 12.
A proportional tax system is also known as a "flat tax system."
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A proportional tax system is also known as a "flat tax system" because it applies the same tax rate to all taxpayers regardless of their income level. This means that everyone pays the same percentage of their income in taxes. This type of tax system is considered fair because it treats all individuals equally. However, critics argue that it can be regressive, meaning that it may place a heavier burden on low-income individuals compared to high-income individuals.Rate this question:
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- 13.
What is the name of the tax that you will pay if you win the PowerBall or Mega Millions?
- A.
Sales Tax
- B.
Supranational Tax
- C.
Annotated Tax
- D.
Gift Tax
Correct Answer
D. Gift TaxExplanation
If you win the PowerBall or Mega Millions, you will have to pay the Gift Tax. This tax is imposed on the transfer of property or money to another person without receiving anything in return. Winning a lottery is considered a gift, and therefore, it is subject to this tax.Rate this question:
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- 14.
Which of the following states impose no income taxes on their citizens?
- A.
Nevada
- B.
California
- C.
Maine
- D.
Washington D.C.
Correct Answer
A. NevadaExplanation
Nevada is the correct answer because it is one of the few states in the United States that does not impose any income taxes on its citizens. This means that residents of Nevada do not have to pay a percentage of their income to the state government. This can be beneficial for individuals and businesses as it allows them to keep more of their earnings.Rate this question:
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- 15.
Which of the following taxes is responsible for funding local schools in the state of Colorado?
- A.
Sales Taxes
- B.
Regressive Income Taxes
- C.
Progressive Income Taxes
- D.
Property Taxes
Correct Answer
D. Property TaxesExplanation
Property taxes are responsible for funding local schools in the state of Colorado. Property taxes are levied on the value of real estate and are a significant source of revenue for local governments. These taxes are collected from property owners and used to fund various public services, including education. In Colorado, property taxes play a crucial role in funding local schools, ensuring that they have the necessary resources to provide quality education to students in the state.Rate this question:
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- 16.
Which of the following best represents a discretionary expense?
- A.
Mortgage Payments
- B.
Rent Payments
- C.
Going to the Movies
- D.
Buying Food
Correct Answer
C. Going to the MoviesExplanation
A discretionary expense refers to an expense that is not necessary or essential for survival or basic needs. Going to the movies falls under this category as it is a non-essential expense that can be chosen based on personal preference or leisure. Mortgage payments and rent payments are considered fixed or necessary expenses as they are required for housing. Buying food is also considered a necessary expense as it is essential for sustenance.Rate this question:
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- 17.
A fixed expenditure is something that cannot be changed assuming there are no other economic options.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A fixed expenditure refers to expenses that remain constant and cannot be easily changed or eliminated. These expenses are typically necessary and recurring, such as rent, mortgage payments, or loan installments. They are considered fixed because they do not fluctuate based on changes in income or economic options. Therefore, the statement "A fixed expenditure is something that cannot be changed assuming there are no other economic options" is true.Rate this question:
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- 18.
What is the name of the bank that is considered the central bank of the United States of America?
- A.
Bank of New York
- B.
Treasury Department
- C.
The Federal Reserve Bank
- D.
All private banks are considered one bank
Correct Answer
C. The Federal Reserve BankExplanation
The Federal Reserve Bank is considered the central bank of the United States of America. It is responsible for implementing monetary policy, regulating banks, and maintaining the stability of the financial system. It controls the nation's money supply and interest rates, and plays a crucial role in promoting economic growth and stability.Rate this question:
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- 19.
Which district bank do we in Colorado report to according to the Federal Reserve system of banks?
- A.
San Francisco Branch
- B.
Atlanta Branch
- C.
Kansas City Branch
- D.
New York Branch
Correct Answer
C. Kansas City BranchExplanation
According to the Federal Reserve system of banks, the district bank that Colorado reports to is the Kansas City Branch. The Federal Reserve is divided into 12 districts, and each district has a main branch. Colorado falls under the jurisdiction of the Kansas City Branch, which is responsible for overseeing and regulating banks in this region.Rate this question:
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- 20.
Who is the current head of the Federal Reserve Bank?
- A.
Alan Greenspan
- B.
Timothy Geithner
- C.
President Barack Obama
- D.
Ben Bernanke
Correct Answer
D. Ben BernankeExplanation
Ben Bernanke is the correct answer because he served as the head of the Federal Reserve Bank from 2006 to 2014. He was appointed by President George W. Bush and reappointed by President Barack Obama. Bernanke played a crucial role in navigating the United States through the global financial crisis of 2008. His tenure was marked by implementing various monetary policies to stabilize the economy and promote growth.Rate this question:
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- 21.
What is the major function of the Federal Reserve Banks?
- A.
Controlling the Money Supply
- B.
Outlining the Risk of the American Banking System
- C.
Advising the American Public
- D.
Investing in the Housing Market
Correct Answer
A. Controlling the Money SupplyExplanation
The major function of the Federal Reserve Banks is to control the money supply. They do this by implementing monetary policy, which involves influencing interest rates and managing the availability of credit in the economy. By controlling the money supply, the Federal Reserve Banks can help stabilize prices, promote economic growth, and maintain financial stability.Rate this question:
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- 22.
What is it called when a bank has to hold a specific amount in their vault as mandated by the Federal Reserve?
- A.
Required Reserves
- B.
Federal Depositor
- C.
Excess Reserves
- D.
Banking Reserves
Correct Answer
A. Required ReservesExplanation
When a bank is required to hold a specific amount in their vault as mandated by the Federal Reserve, it is called "Required Reserves". This is a regulatory measure implemented by the Federal Reserve to ensure that banks maintain a minimum level of reserves to meet their customers' demands and to promote stability in the banking system.Rate this question:
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- 23.
Which of the following is a type of checking account?
- A.
Demand Deposits
- B.
Regular Checking
- C.
Special Checking
- D.
Lifeline Banking
- E.
All of the Above are types of checking accounts
Correct Answer
E. All of the Above are types of checking accountsExplanation
All of the options listed - Demand Deposits, Regular Checking, Special Checking, and Lifeline Banking - are types of checking accounts. Demand deposits refer to funds that can be withdrawn on demand, while Regular Checking is a basic type of checking account offered by banks. Special Checking may have additional features or benefits, and Lifeline Banking is a type of checking account typically offered to low-income individuals. Therefore, all of these options are valid types of checking accounts.Rate this question:
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- 24.
A checking account Allows transfer of deposited funds to merchants and service providers, as well as to accounts at other financial institutions
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
A checking account is a type of bank account that allows the account holder to transfer deposited funds to merchants, service providers, and other financial institutions. This means that the funds in a checking account can be used to make payments and purchases directly, either online or in-person. Additionally, checking accounts often come with features such as check-writing abilities and debit cards, which further facilitate the transfer of funds. Therefore, the statement that a checking account allows transfer of deposited funds to merchants and service providers, as well as to accounts at other financial institutions, is true.Rate this question:
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- 25.
What is a C.D.?
- A.
Certificate of Deposit
- B.
Center of Deposit
- C.
Consumer Deposit
- D.
Credit Draft
Correct Answer
A. Certificate of DepositExplanation
A Certificate of Deposit (C.D.) is a financial product offered by banks and financial institutions. It is a type of time deposit where individuals deposit a certain amount of money for a fixed period of time, typically ranging from a few months to several years. In return, the bank pays a fixed interest rate on the deposited amount. At the end of the fixed period, the individual can withdraw the principal amount along with the accrued interest. C.D.s are considered low-risk investments and are popular among individuals who want to earn a guaranteed return on their savings.Rate this question:
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- 26.
Suppose you own twenty shares of Coca Cola stock. You bought the stock one year ago at a price of $50.00 and sold it today with the stock price being $90.00. How much money do you pocket from selling the shares?
- A.
$100
- B.
$400
- C.
$800
- D.
$1500
Correct Answer
C. $800Explanation
You would pocket $800 from selling the shares. This can be calculated by subtracting the buying price from the selling price and then multiplying the result by the number of shares. In this case, the selling price is $90.00, the buying price is $50.00, and the number of shares is 20. So, the calculation would be: ($90.00 - $50.00) * 20 = $800.Rate this question:
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- 27.
What is overdraft protection used for with regards to checking accounts?
- A.
Used to protect against having insufficient funds in your account
- B.
Used to serve as a savings account
- C.
Used to buy C.D.'s
- D.
Used to purchase stock options
Correct Answer
C. Used to buy C.D.'s -
- 28.
What is a stock dividend?
- A.
A payout for investors in the form of stock not cash
- B.
A payout for investors in the form of cash not stock
- C.
A penalty for making money on some stocks
Correct Answer
A. A payout for investors in the form of stock not cashExplanation
A stock dividend refers to a payout made to investors in the form of additional shares of stock, rather than in cash. This means that instead of receiving a cash dividend, shareholders are given additional shares of the company's stock. This can be seen as a way for the company to reward its shareholders by increasing their ownership stake in the company.Rate this question:
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- 29.
What is considered as a low-risk low-cost investment?
- A.
Buying United States treasury bonds
- B.
Purchasing IPO stock in Facebook
- C.
High income bonds
- D.
Purchasing real estate
Correct Answer
A. Buying United States treasury bondsExplanation
Buying United States treasury bonds is considered a low-risk low-cost investment because they are backed by the US government, which is considered one of the most creditworthy entities in the world. These bonds have a low risk of default and provide a fixed interest rate, making them a safe investment option. Additionally, the cost of purchasing treasury bonds is relatively low compared to other investment options like purchasing real estate or IPO stock in a company like Facebook.Rate this question:
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- 30.
Which investment is the riskiest?
- A.
Buying United States Treasury Government Bonds
- B.
Options Trading
- C.
Credit Swaps
- D.
Buying C.D.'s
Correct Answer
C. Credit SwapsExplanation
Credit swaps are considered the riskiest investment among the given options. This is because credit swaps involve an agreement between two parties to exchange the credit risk of a particular asset or debt. In other words, one party is essentially buying insurance against the possibility of default on a specific debt instrument. The risk arises from the uncertainty of the counterparty's ability to fulfill their obligations in the event of a default. This makes credit swaps highly susceptible to the creditworthiness and financial stability of the counterparty, making it a riskier investment compared to buying government bonds, engaging in options trading, or buying certificates of deposit (C.D.'s).Rate this question:
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- 31.
What is consumer credit?
- A.
Taking a short-term loan and paying for purchases at a later date
- B.
Borrowing money for an extended period of time
- C.
Using savings account dollars
- D.
Purchasing a C.D.
Correct Answer
A. Taking a short-term loan and paying for purchases at a later dateExplanation
Consumer credit refers to the practice of taking a short-term loan and paying for purchases at a later date. This means that individuals can make purchases without having to pay for them immediately, instead opting to borrow money for a short period of time and repay it later. This allows consumers to have more flexibility in their spending and manage their cash flow effectively.Rate this question:
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- 32.
Which of the following is an example of open-end credit?
- A.
Using an automobile loans
- B.
Using a mortgage loan
- C.
Using your Visa card to pay for food
Correct Answer
C. Using your Visa card to pay for foodExplanation
Using your Visa card to pay for food is an example of open-end credit because it allows the cardholder to make purchases up to a certain credit limit and then pay off the balance over time. Open-end credit is typically associated with revolving accounts, such as credit cards, where the borrower can continuously borrow and repay funds as long as they stay within the credit limit. In this case, using a Visa card to pay for food falls under the category of open-end credit as the cardholder can make multiple purchases and repay the amount owed on a monthly basis.Rate this question:
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- 33.
Which company will be facing an I.P.O this upcoming spring?
- A.
Google
- B.
MySpace
- C.
AT&T
- D.
Facebook
Correct Answer
D. FacebookExplanation
Facebook will be facing an I.P.O this upcoming spring.Rate this question:
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- 34.
What does the GDP measure?
- A.
The value of all expenditures by the United States Government
- B.
The value of all goods and services produced by workers in the US
- C.
The value of all goods and services produced by the government and United States workers
- D.
The net value of all goods in the world
Correct Answer
B. The value of all goods and services produced by workers in the USExplanation
The GDP measures the value of all goods and services produced by workers in the US. It is a measure of the overall economic activity and productivity of a country. By calculating the GDP, economists can assess the growth and health of an economy, as well as make comparisons between different countries.Rate this question:
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- 35.
What does the acronym CPI pertain to in terms of personal finance?
- A.
Consumer Price Index
- B.
Customers Pricing Individually
- C.
Consumer Producers Index
- D.
Controlling Production Independence
Correct Answer
A. Consumer Price IndexExplanation
The acronym CPI stands for Consumer Price Index. This index is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is used to track inflation and to adjust wages, pensions, and other payments for changes in the cost of living. The CPI is an important indicator in personal finance as it helps individuals understand how prices of goods and services are changing and how it may impact their purchasing power.Rate this question:
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- 36.
What is a credit limit?
- A.
A determined set amount of money on a credit card
- B.
An overdraft protection number on your checking account
- C.
A type of personal investment strategy
- D.
A limited amount of personal net worth
Correct Answer
A. A determined set amount of money on a credit cardExplanation
A credit limit refers to a predetermined maximum amount of money that a person can borrow or spend using a credit card. It is the maximum balance that can be carried on the card at any given time. This limit is set by the credit card issuer based on factors such as the individual's creditworthiness, income, and financial history. Once the credit limit is reached, the cardholder cannot make further purchases or withdrawals until the outstanding balance is paid down.Rate this question:
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- 37.
What is the one of the most popular forms of credit?
- A.
Debit Cards
- B.
Credit Cards
- C.
Cash Money
- D.
Checking Accounts
Correct Answer
B. Credit CardsExplanation
Credit cards are one of the most popular forms of credit because they allow individuals to make purchases on credit, allowing them to borrow money from the credit card issuer. With credit cards, individuals can make purchases and pay them back over time, typically with interest. Credit cards also offer various benefits such as rewards programs, cashback, and fraud protection, making them a convenient and widely used form of credit.Rate this question:
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- 38.
Long-term financial goals should last over five years.
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Long-term financial goals should last over five years because they require a significant amount of time and planning to achieve. These goals typically involve saving for major expenses such as buying a house, funding education, or retirement planning. It takes time to accumulate the necessary funds and make strategic investments to reach these goals. Short-term goals, on the other hand, can be achieved within a few months or a year. Therefore, it is important to have a long-term perspective and commitment to achieve financial stability and success.Rate this question:
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- 39.
What does I.P.O stand for in terms of financial public offerings in the stock market?
- A.
Initial Public Offering
- B.
Imagining Peaceful Offerings
- C.
Investment Public Offering
- D.
Institution Promises Olives
Correct Answer
A. Initial Public OfferingExplanation
An Initial Public Offering (IPO) refers to the first sale of shares by a privately-owned company to the public, allowing it to raise capital and become publicly traded. This is a common way for companies to expand and raise funds for various purposes such as expansion, debt repayment, or acquisitions. The other options provided in the question are not relevant or accurate in the context of financial public offerings in the stock market.Rate this question:
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- 40.
How often should you review and revise your personal financial plans?
- A.
Once a decade
- B.
Once in high school, college, and prior to having a child
- C.
Once a year
- D.
Once a year or when significant events occur
Correct Answer
D. Once a year or when significant events occurExplanation
It is important to review and revise personal financial plans once a year or when significant events occur. This ensures that your plans are up-to-date and aligned with your current financial situation and goals. Reviewing annually allows you to track your progress, make necessary adjustments, and identify any changes in your income, expenses, or financial priorities. Additionally, reviewing when significant events occur, such as getting married, having a child, or changing jobs, allows you to adapt your financial plans accordingly to accommodate these life changes. This regular review and revision helps to ensure that your personal financial plans remain relevant and effective.Rate this question:
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- 41.
What is financial literacy?
- A.
The ability to balance a check book
- B.
The ability to accurately gauge A.P.R
- C.
Understanding the rules of credit
Correct Answer
C. Understanding the rules of creditExplanation
Financial literacy refers to the knowledge and understanding of various financial concepts and practices. It includes being aware of the rules and regulations related to credit, such as how credit works, how interest rates are calculated, and how to manage and use credit responsibly. This knowledge allows individuals to make informed decisions regarding borrowing, lending, and managing their credit effectively.Rate this question:
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- 42.
Which bank is in charge of adjusting the interest rates that banks use to influence their interest rates?
- A.
The Federal Reserve Bank
- B.
Each Individual Bank
- C.
The President
- D.
None of the above
Correct Answer
A. The Federal Reserve BankExplanation
The Federal Reserve Bank is responsible for adjusting the interest rates that banks use to influence their interest rates. As the central bank of the United States, the Federal Reserve has the authority to set the benchmark interest rate, known as the federal funds rate. By adjusting this rate, the Federal Reserve can influence borrowing costs for banks and ultimately impact the interest rates offered to consumers and businesses. This role allows the Federal Reserve to manage monetary policy and promote economic stability.Rate this question:
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- 43.
All of the following are reasons for using credit: convenience, identification, emergencies, and consolidating debt
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
Using credit can provide convenience as it allows individuals to make purchases without carrying cash. It also serves as a form of identification when making transactions. Credit can be useful in emergencies when immediate funds are needed. Additionally, credit can be used to consolidate debt by combining multiple debts into one payment, potentially making it easier to manage and pay off. Therefore, all of the mentioned reasons are valid for using credit, making the statement true.Rate this question:
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- 44.
What is one disadvantage of credit?
- A.
Purchases are more expensive
- B.
A temptation to overspend exists
- C.
Ties up future income
- D.
Possible financial difficulties
- E.
All of the above are disadvantages
Correct Answer
E. All of the above are disadvantagesExplanation
All of the options mentioned are disadvantages of credit. Purchases are more expensive because of interest charges and fees. Credit can also create a temptation to overspend, leading to financial difficulties. Additionally, credit ties up future income as it requires regular payments, limiting the available funds for other expenses or investments. Therefore, all of the options listed are valid disadvantages of credit.Rate this question:
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- 45.
Microeconomics is best described as...
- A.
The branch of economics that deals with human behavior and choices
- B.
The branch of economics that deals with big picture thinking
- C.
The branch of economics that specifies what businesses should buy
Correct Answer
A. The branch of economics that deals with human behavior and choicesExplanation
Microeconomics is best described as the branch of economics that deals with human behavior and choices. It focuses on analyzing the individual economic agents such as consumers, households, and firms, and how they make decisions regarding the allocation of scarce resources. Microeconomics examines how these economic agents interact in markets to determine prices and quantities of goods and services. It also studies factors that influence individual decision-making, such as preferences, constraints, and incentives. Overall, microeconomics provides insights into the behavior and choices of individuals and how they impact the overall economy.Rate this question:
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- 46.
Which of the following is the best example of opportunity cost?
- A.
Studying for a test and getting the answers correct on the test
- B.
Moving to Denver for a new job
Explanation
Moving to Denver for a new job is the best example of opportunity cost. Opportunity cost refers to the value of the next best alternative that is foregone when making a decision. By choosing to move to Denver for a new job, one is giving up the opportunity to pursue other job opportunities or stay in their current location. This decision involves weighing the benefits and drawbacks of the new job against the potential benefits of other options, making it a clear example of opportunity cost.Rate this question:
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- 47.
S.O.L is an abbreviation for what.
- A.
Standard of Living
- B.
Standard of Losing
- C.
Standard of Limitations
- D.
Standard of Limited Liabilities
Correct Answer
A. Standard of LivingExplanation
S.O.L is an abbreviation commonly used to refer to "Standard of Living." This term represents the level of comfort, material goods, and necessities that an individual or group of people have access to. It encompasses factors such as income, housing, healthcare, education, and overall well-being. Standard of Living is an important measure when assessing the quality of life and economic prosperity in a particular area or country.Rate this question:
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- 48.
What is a preference?
- A.
A service business first sale of the year
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- 49.
What is the major goal of economics?
- A.
To make businesses more money
- B.
To make additional financial compensation for government
- C.
To make people better-off through the use of choices
Correct Answer
C. To make people better-off through the use of choicesExplanation
The major goal of economics is to make people better-off through the use of choices. Economics studies how individuals, businesses, and governments make decisions about allocating resources to satisfy their needs and wants. By understanding the principles of economics, individuals can make informed choices that can lead to improved well-being. Economics seeks to improve people's lives by promoting efficiency, equity, and sustainability in the allocation of resources and the distribution of goods and services. It focuses on maximizing overall welfare and improving the standard of living for individuals and society as a whole.Rate this question:
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- 50.
The United States utilizes a free enterprise economy.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The United States does not utilize a free enterprise economy. While it does have elements of a free market system, it also has government regulations and interventions in various sectors of the economy. This mixed economy combines elements of both free market capitalism and government intervention, making the statement false.Rate this question:
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