With online banks, all of your deposits, transfers, and bill payments happen digitally, but

It's often more difficult to get in touch w/ a real person for help

Which of the following best summarizes how the use of a credit cards instead of cash can change one's spending behavior

Studies show that you spend more when using credit as opposed to cash

Some of the services banks offer include . . .

Mortgages, check writing, and debit cards

Which of the following is not one of the basics of budgeting?

Stick to your budget unless something unexpected happens

Which of the following statements is false?

A budget summarizes the saving/spending that has taken place over a year

If you see "pending" on an account charge, that means :

It hasn't been fully processed yet

Key components of financial planning include all of the following except:

Allow your financial planner to make all of your major money decisions

A credit score is intended to measure:

The risk of your not repaying debt

Something that all of the predatory financial services have in common is:

You end up losing money with all of them

Which of the following statements best explains why income alone does not determine wealth?

How much $ a person makes doesnt dictate his or her behavior

The zero-based budget is the best method of budgeting because:

The 0 based budget ensures that every $ you make is assigned a purpose

Which of the following is not one of the three basic reasons for saving money?

Have money available to lend to friends

Which of the following is not a credit myth?

Borrowing money can prevent you from building wealth

Which of the following is something that a typical millionaire would do?

Spend less money than he or she makes

Why should interest earned not be a factor with your emergency fund?

The emergency fund is not intended to grow wealth.

How quickly and easily you can access your money

In the Great Depression, policymakers came up with mortgage & lending policies that convinced commercial banks

Consumer credit could be profitable

Why is having a fully funded emergency fund so important when it comes to your financial well-being?

For unexpected financial emergencies & for financial security

What does it mean to be blacklisted by a bank?

The bank wont let you to open an account because you handled money poorly

Which of the following statements best describes how Americans are being outsmarted by banks and other lenders?

Credit is marketed so well that we want it while we ignore the negatives

Which of the following is not a good idea for getting out of debt?

Borrow money from your parents to pay for the debt

Which of the following best explains why students should learn about personal finance?

It can eliminate financial mistakes & promote future benefits

What is paycheck garnishment?

A court-ordert that allows a lender to take $ owed directly from a paycheck

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Financial Literacy Midterm 2021

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Questions 50

Answers

1
With online banks, all of your deposits, transfers, and bill payments happen digitally, but
They do not provide a debit card
Online banks should never be trusted
It's often more difficult to get in touch w/ a real person for help
These banks do not offer interest on savings accounts
2
Which of the following best summarizes how the use of a credit cards instead of cash can change one's spending behavior
People spend less when they know that they are earning credit card rewards
Behavior doesnt matter as long as you pay off the credit card balance
Studies show that you spend more when using credit as opposed to cash
Studies show there is no change in spending behavior with cash vs credit
3
With certificates of deposit (CDs), you have to pay a penalty for
Withdrawing your money early
Creating a savings account
Using an ATM
Depositing money into the account
4
Which of the following is a reason that people don't save money?
They do not live on a budget
They lack focus
They lack discipline
All of the above
5
Some of the services banks offer include . . .
Creating a personalized budget for you and managing your schedule
Paying off your student loan debt and saving for your future
Mortgages, check writing, and debit cards
Teaching you how to handle finances & encouraging you to cut up cards
6
Which of the following is a consequence of spending more than you make?
A cycle of debt
All of the above
Missed opportunity to save and invest
Stress
7
The FDIC and NCUA keep your money in the bank insured up to _______ per account
$2,500
$25,000
$250
$250,000
8
Which of the following is not one of the basics of budgeting?
Pay yourself first by saving
Stick to your budget unless something unexpected happens
Live on less than you make
Make it a priority to give
9
Which of the following statements is false?
A cash flow statement summarizes all income & spending over a certain time
The cash flow statement is reflective of what has already taken place.
A budget summarizes the saving/spending that has taken place over a year
A budget is a written plan for saving and spending.
10
If you see "pending" on an account charge, that means :
It is suspected of being a fraudulent charge
It hasn't been fully processed yet
The payment was declined
You need to make a deposit before it is paid
11
A written budget, if followed, removes __ from your finances.
Management by crisis
All of the above
Guilt
Overspending
12
Instead of borrowing money for large purchases, you should set money aside in a ________ over time and pay with cash
Emergency fund
Mortgage fund
Sinking fund
Credit card fund
13
Why was the use of credit uncommon prior to 1917?
Borrowing money was generally not socially acceptable.
Lending money to others was not profitable.
All of the above.
Laws prevented lenders from charging high interest rates.
14
An amount of $ today has different buying power than the same $ in the future
Time value of money
Inflation
Opportunity cost
Interest rate
15
Key components of financial planning include all of the following except:
Allow your financial planner to make all of your major money decisions
Regularly monitor and reassess your financial plan
Replace money myths with money truths
Write out a detailed plan for accomplishing your goals
16
A credit score is intended to measure:
Your financial success
The amount of money you have in the bank
Your income level
The risk of your not repaying debt
17
When it comes to managing money, success is about ________% knowledge and ________% behavior
60, 40
20, 80
80, 20
50, 50
18
Which of the following is a consequence of overdrawing your checking account?
All of the above
Bounced check fee from the store
Overdraft fee from your bank
Stress from money mismanagement
19
Something that all of the predatory financial services have in common is:
People can earn money with all of them
They all require you to be a college graduate
They all require you to take out a loan
You end up losing money with all of them
20
Which of the following account records would have the most current balance?
Your monthly bank statement
Your own account register
Account balance statement from the ATM
All of these records will have accurate account balances
21
Which of the following statements best explains why income alone does not determine wealth?
Income alone does determine a person's wealth.
Only people who are natural savers can become wealthy.
Investing is the only factor that contributes to wealth building.
How much $ a person makes doesnt dictate his or her behavior
22
Groceries are a:
Discretionary expense
Variable expense
Intermittent expense
Fixed expense
23
Your monthly budget should include:
All of the above
Variable expenses
Discretionary expenses
Fixed expenses
24
A bank can help ______ you your money and keep it _______ .
Deposit; budgeted
Budget; available
Manage; safe
Find; growing
25
Which of the following is not a factor in determining a FICO score?
Paying cash for all purchases
Getting a personal loan from a bank
Taking out a mortgage on a house
Using credit cards
26
A savings account is for
Long-term savings goals
The Entertainment budget line item
Investing your money
Regular spending
27
Bank statements are compared to the check register when ____________________ the account.
Using
Overdrafting
Checking
Reconciling
28
The zero-based budget is the best method of budgeting because:
This type of budget is less complicated than other types of budgets
A zero-based budget allows less money for wants
Sticking to a zero-based budget requires less discipline
The 0 based budget ensures that every $ you make is assigned a purpose
29
Which of the following is not one of the three basic reasons for saving money?
Build wealth
Emergency fund
Large purchases
Have money available to lend to friends
30
Personal financial success is primarily the result of:
Generous welfare and unemployment programs
Winning the lottery
Managing your money behavior
Inheriting money from your parents
31
Rent is a:
Fixed expense
Intermittent expense
Variable expense
Discretionary expense
32
Which of the following is not a credit myth?
Debt is a tool and should be used to create prosperity.
You have "arrived" financially once you get approved for a credit card.
Borrowing money can prevent you from building wealth
The lottery and other forms of gambling will make you rich.
33
Which of the following is something that a typical millionaire would do?
Carry debt
Lease a new car
Replace things that are not broken
Spend less money than he or she makes
34
Why should interest earned not be a factor with your emergency fund?
The emergency fund is not intended to grow wealth.
Interest-bearing accounts at banks earn a high rate of interest
Inflation can eat up the interest earned.
All of the above
35
Doing a budget does not:
Make overspending more likely
Remove guilt and shame sometimes associated with a purchase
Make your money go further
Show if you are overspending in an area
36
Liquidity is:
How quickly and easily you can access your money
How money flows from bank to bank
When you deposit silver or gold and they liquify it for you
A great way to find a financial service that's right for you
37
Which of these is not a key to saving money?
Discipline
Making saving a habit and a priority
Your income
Focus
38
This is charged when a credit card holder does not make the minimum monthly payment by the due date
Late fee
Annual Fee
Credit Limit
Minimum Balance
39
In the Great Depression, policymakers came up with mortgage & lending policies that convinced commercial banks
Consumer credit was not a profitable industry
Consumer credit could be profitable
Consumers wouldnt be willing to use credit
They would not be able to compete with loan sharks
40
Which of the following steps is the First Foundation?
Save a $500 emergency fund
Build wealth and give
Pay cash for your car
Get out of debt
41
Why is having a fully funded emergency fund so important when it comes to your financial well-being?
None of the above
So you have money set aside for large purchases, like vacations
For unexpected financial emergencies & for financial security
If you have a good-paying job, you really don't need an emergency fund
42
At your age, a fully funded emergency fund should be:
$1,000
$100
$500
$5,000
43
What does it mean to be blacklisted by a bank?
They charge you extra fees and offer less services
The bank wont let you to open an account because you handled money poorly
They promise you a higher credit score for a 15% interest on investments
You passed a financial literacy test so they pay you for banking w/them
44
For which of the following should you save?
All of the above
Wealth building
Emergency fund
Purchases
45
Which of the following statements best describes how Americans are being outsmarted by banks and other lenders?
We are taught that we can buy happiness.
Credit is marketed so well that we want it while we ignore the negatives
We are driven by consumerism.
Buying things on credit has become acceptable in our culture.
46
The maximum amount of charges allowed to a credit card account
Annual Fee
Overdraft
Late Fee
Credit Limit
47
When it comes to personal finance, the math is easy. What's challenging is managing your ________.
Behavior
Friends
Income
Bank account
48
Which of the following is not a good idea for getting out of debt?
Quit borrowing money
Borrow money from your parents to pay for the debt
Sell something
Get a part-time job or work overtime
49
Which of the following best explains why students should learn about personal finance?
The skills are highly complex & require a great deal of time to learn
Personal finance skills are better learned through trial and error.
Learning to manage money will help you achieve a profitable career.
It can eliminate financial mistakes & promote future benefits
50
What is paycheck garnishment?
Process of taking something back for failure to make payments
A legal procedure for dealing with debt problems of individuals/businesses
When the holder of a mortgage sells your property when you miss payments
A court-ordert that allows a lender to take $ owed directly from a paycheck

Financial Literacy Midterm 2021 Flashcards | StudBud