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FINLIT Final B Flashcards | StudBud
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FINLIT Final B
FINLIT Final B
51 terms
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Budgeting Taxes/Pay Consumer Skills Behavior Economics
Flashcards
51 cards
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Questions
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Answers
1
How does the 50/30/20 rule of thumb for budgeting allocate your income?
50% Needs, 30% Savings & Debt Repayment, 20% Wants
50% Needs, 30% Wants, 20% Savings & Debt Repayment
50% Savings & Debt Repayment, 30% Wants, 20% Needs
50% Wants, 30% Needs, 20% Savings & Debt Repayment
2
Guy bought tickets to a concert but there is a bad snow storm. He decides to go anyway because he paid for it. This is
Herd Mentality
Endowment Effect
Overconfidence
Sunk Cost Fallacy
3
Marie's car has needed over $2000 in repairs. She resists selling it because she has spent so much money. This is...
Overconfidence Bias
Confirmation Bias
Sunk Cost Fallacy
The Endowment Effect
4
Jabar broke his leg while riding his bike. How does having health insurance help him?
Jabar will likely owe a portion of his medical costs
Jabar will likely have to pay $0 towards his medical costs
Jabar will likely have to cover 100% of his medical costs
Having health insurance makes no difference
5
Which of the following would typically NOT be covered under renter's insurance?
A friend slips and twists his ankle in your living room
A fire destroys 80% of your belongings
Your apartment is flooded, destroying your furniture
Your apartment is broken into and your laptop is stolen
6
Which of the following taxes is applied to wages, salaries, dividends, and interest earned?
Income Tax
Corporate Income Tax
Excise Tax
Estate Tax
7
6 cans of tomato soup cost $14.99. What is the unit price?
About $1.50
About $3.50
About $3
About $2.50
8
A 18oz box of cereal costs $4.99. How would you calculate the unit price?
(18oz) x ($4.99)
18 oz + $4.99
18oz / $4.99
$4.99 / 18oz
9
Which of the following is an example of loss aversion?
Only looking at sources that reinforce a higher selling value for your home
Selling your house at a loss to find a better investment opportunity
Believing that your house is worth more than it is because you own it
Deciding against selling your house below what you purchased it for
10
How do wages and salary differ?
Salaried employees are likely to be paid for overtime
Salary describes what you earn on an annual basis
Wages describe what you earn on an annual basis
Wages mean you have a standard amount in each paycheck
11
What is a deductible?
The discount you get on your health insurance every year
The amount your insurance pays before you pay
The amount you pay before your insurance begins to pay
The cost you and your insurance share
12
Jabar broke his leg while riding his bike. How does having health insurance help him?
Jabar will likely owe a portion of his medical costs
Jabar will likely have to cover 100% of his medical costs
Having health insurance makes no difference
Jabar will likely have to pay $0 towards his medical costs
13
Overprecision is …
The overvaluing of our own abilities relative to everyone else
The exaggerated certainty that our beliefs are correct
The expectation that other people place upon us to be accurate all the time
The belief that we are above average without supporting evidence
14
Which of the following reasons would explain why Justin has decided not to own a car?
Driving would reduce the time it takes to get to work by 30 minutes
There are numerous car dealerships in his area
The walking score in his city is high
He doesn't have access to public transportation
15
Which step can help mitigate the risk of buying a used car?
Get a Vehicle History Report
Skip the test drive; you have time after buying to drive it
Have a mechanic inspect the car after you buy it
Buy a more expensive vehicle to ensure quality
16
Jason filed his 2023 tax return and owes money. If he doesn't want to pay a fee, when should he pay this amount by?
December 31st
April 15th
January 1st of the next year
October 15th
17
Which of the following is NOT a cost of owning a car?
Utilities
License and Registration Fees
Gasoline
Insurance
18
You are new to a city and find two restaurants near each other that offer a similar menu. You pick the more crowded one.
This is an example of Overvaluing
This is an example of Herd Mentality
This is an example of Sunk Cost Fallacy
This is an example of Fear of Missing Out (FOMO)
19
What item would you DEFINITELY see on a paystub?
Your occupation/role
Healthcare
Retirement
Gross Pay
20
This way of influence claims someone is an expert even if they may not be
Reciprocity
Scarcity
Authority
Social Proof
21
Which of the following would typically NOT be covered under renter's insurance?
Your apartment is flooded, destroying your furniture
Your apartment is broken into and your laptop is stolen
A fire destroys 80% of your belongings
A friend slips and twists his ankle in your living room
22
You see an advertisement promoting a sale “for a limited time only!” with a countdown clock. Which bias is being used?
Hedonic Adaptation
Loss Aversion
Fear of Missing Out (FOMO)
Herd Mentality
23
Each of the following things is true about the W-2 form EXCEPT...
It lets you know how much you earned last year
It lets you know how much was withheld from your paychecks
It contains information you'll need to fill out a 1040
You get 1 W-2 form every year, even if you had multiple jobs
24
The Endowment Effect is …
Returning to a baseline level of happiness after a major event
Valuing something more because you own it
Doing something because you see all of your friends doing it
Continuing something because you have contributed resources to it
25
Which of the following is TRUE about unit pricing?
Unit price labels are universal throughout the country
It's easy to compare quantities on a unit price label
All states require unit price labels
Unit prices can help you compare the prices of similar items
26
Which of the following may NOT always appear on your paycheck stub?
Net Pay
Your Role/Title
Gross Pay
Local Tax
27
Who primarily uses our tax money?
Federal and state government
Large corporations
Your employer
Local businesses
28
In 2021, many people saw the value of Gamestop stock increasing sharply and purchased the stock too. These buyers were
Experiencing Confirmation Bias
Experiencing Herd Mentality
Experiencing Overprecision
Experiencing Hedonic Adaptation
29
While researching Apple, Remy tends to focus on positive stories about their profits instead of stories about poor sales
Remy is experiencing Overconfidence Bias
Remy is experiencing Confirmation Bias
Remy is experiencing the Endowment Effect
Remy is experiencing Herd Mentality
30
All of these are potential outcomes of identity theft EXCEPT…
Someone pretending to be you could go to your workplace and replace you
Someone could access your bank account and withdraw your funds
A new loan could be taken out in your name
You might find it more difficult to obtain insurance
31
Our tax money is spent on all of the following EXCEPT:
Private School Education
Social Security
National Parks
The Military
32
All of these are red flags that someone is likely a scammer EXCEPT…
They threaten to report you to law enforcement authorities
They have an urgent need for money
They respond to an inquiry you made regarding your bank account
They ask you for personal or financial information
33
Which of these qualities should be LEAST important when considering purchasing a product?
The performance of the product
The quality of the product
How long the product will last
How many of your friends have the product
34
What do you need to file your 1040 form?
Income of $50,000 or more
Your W-4
Your prior year's tax return
Your W-2
35
Which of the following is an example of buying something you NEED?
"I want to replace something that is no longer working."
"I'm feeling down, and I need to boost my spirits."
"I want to impress someone/ change how they feel about me."
"I don't want to miss out on these deals during the sale!"
36
The Fear of Missing Out, or FOMO, is…
The anxiety that an interesting or exciting event is happening without you
The opposite of YOLO (You Only Live Once)
The effect of feeling a loss more than an equal gain
Placing higher value on things you own
37
Which of the following products are most Americans likely to buy after seeing it on social media?
Clothes
Home goods
Electronics
Cars
38
Confirmation bias is …
The tendency to value something more because you own it
The tendency to seek out information that supports our existing beliefs
The belief that we should do something because our friends are doing it
The belief that we are better at something than we actually are
39
Which of the following is an example of allowing sunk costs to impact your decision?
Buying a new phone because you see all of your friends have that it
Not selling a baseball card that you think is worth more because you own it
Continuing to watch a movie that you don’t like because you paid to see it
Selling a stock because you see the price drop and want to avoid losses
40
All of these are strategies of comparison shopping EXCEPT…
Reading reviews
Checking competitor prices
Considering the brand reputation
Shopping exclusively online
41
The W-4 form lets...
your employer know how much to withhold from your paycheck
the 3 major credit bureaus know how many dependents you have
the government know how much you paid in taxes last year
you know how much you paid in taxes last year
42
Which of these accurately describes a common relationship between consumers and subscription services?
Consumers tend to overestimate what they pay in subscriptions each month
Consumers have been spending less on subscriptions in recent years
Consumers tend to save money by signing up for lots of trial subscriptions
Consumers forget how many subscriptions they have and how much they cost
43
If you owe taxes, which of the following is FALSE?
You can make a payment with a debit, but not credit card
You can delay your payment deadline
With an agreement, you can pay it in installments
You can make a payment using cash
44
Behavioral economics is …
The study of how rational people make economic decisions
The study of how investors choose which stocks to buy and sell
The study of how economies around the world interact with each other
The study of how irrational factors affect individual’s economic decisions
45
All of these are ways that social media has an impact on teen spending EXCEPT…
Consumers are influenced to buy items related to appearance or experiences
Social media has made it easier than ever to buy immediately on impulse
Social media constantly nudges consumers to buy products they have viewed
Influencers typically encourage consumers to save money rather than spend
46
Which of the following are TRUE about gross income and net income?
They are the same thing
Gross income is the total amount earned AFTER deductions
Net income is the total amount earned BEFORE deductions
Gross income is the total amount earned BEFORE deductions
47
All of the following are PRACTICAL strategies to reduce the influence of advertisements EXCEPT…
Unsubscribe from shopping emails
Use a private or incognito browser when shopping
Pause before making a purchase to evaluate if you actually need it
Avoid using the internet completely
48
Paula sees her friends' pictures of a concert that she couldn't attend because of work. She feels like an outsider.
Paula is experiencing Loss Aversion
Paula is experiencing Fear of Missing Out (FOMO)
Paula is experiencing Confirmation Bias
Paula is experiencing Herd Mentality
49
Jenna wants to decrease the amount of $ she spends on food. Which of the following would help?
Decide what she will make for dinner that same day
Eat at fast food restaurants multiple times a week
Go to the grocery store with a list
Go to the store whenever she needs 1-2 items
50
Which is TRUE if you do not pay your taxes?
You owe twice as much the following year
You cannot go to jail (but you will be heavily fined)
You're more likely to be approved for low interst loans
Your credit score may be impacted
51
Which statement is TRUE about the hidden fees consumers frequently encounter while making purchases?
Hidden fees are rarely successfully disputed and not worth the effort
Hidden fees cost businesses millions of dollars in lost sales annually
Hidden fees are illegal in most states in the U.S.
Hidden fees are a widely accepted practice despite customer dislike
