What is the difference between gross and net pay?

Net pay describes pay after deductions: gross is before.

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

How much $ a person makes doesn't dictate his spending and saving behavior.

The widespread financial insecurity of Americans is primarily because

The savings% of Americans is low & many borrow to spend more than they make

Employee benefits packages:

Are non-wage compensations provided to employees in addition to wages

Which of the following is NOT one of the 3 basic reasons for saving money?

Have $ available to lend friends

When a company places an ad and offers no interest on your purchase for three years:

The cost of the financing is built into the price of the item

Which statement is true about liquidity?

The more liquid an investment, the less return

When buying and selling investments, you should not:

Switch your investment strategy often, based on market conditions

This tax pays for benefits that workers and families receive for SS or Medicare.

Federal Insurance Contribution Act (FICA)

Which of the following statements is FALSE?

All high-paying careers require a 4 year college degree

Which of the following statements is FALSE?

Your choices as a consumer have no impact on the larger social environment

A credit Score is intended to measure:

The risk of your not repaying a debt

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Financial Literacy Final Exam

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Questions 20

Answers

1
What is the difference between gross and net pay?
Gross pay describes pay after deductions, net is before.
Gross and net pay are the same
Net pay describes pay after deductions: gross is before.
None of the above
2
The purpose of insurance is to:
Transfer Financial Risk
Provide an inmvestment opportunity
All of the above
Develop a savings plan
3
Which of the following statements BEST explains why income alone does not determine wealth?
How much $ a person makes doesn't dictate his spending and saving behavior.
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.
4
A young investor willing to take moderate risk for above-average growth would be most interested in:
Mutual Funds
Real Estate
Single Stocks
Bonds
5
The widespread financial insecurity of Americans is primarily because
Government programs are unavailable to help people when they are disabled
The incomes of Americans are low
Most Americans save a high proportion of their income
The savings% of Americans is low & many borrow to spend more than they make
6
Employee benefits packages:
Never include retirement plans
Should not be considered when looking for a job
Are non-wage compensations provided to employees in addition to wages
Are the same regardless of the company you work for
7
Which of the following is NOT one of the 3 basic reasons for saving money?
Emergency Fund
Large Purchases
Have $ available to lend friends
Build weath
8
When a company places an ad and offers no interest on your purchase for three years:
The cost of the financing is built into the price of the item
They're showing appreciation and giving you FREE MONEY
They are not interested in making a profit.
All of the above
9
Which statement is true about liquidity?
Both RED and BLUE
The less liquid an investment, the less return
The more liquid an investment, the less return
The more liquid an investment, the more return
10
When buying and selling investments, you should not:
Set your investment goals and consider a time frame
Understand basic investment strategies
Switch your investment strategy often, based on market conditions
Learn different types of investments
11
This tax pays for benefits that workers and families receive for SS or Medicare.
Excise Tax
State Income Tax
Sales Tax
Federal Insurance Contribution Act (FICA)
12
Which of the following things cannot be done with a debit card but can be done with a credit card?
Purchase an airline ticket
Go into debt
Purchase something online
Rent a car
13
Which of the following statements is FALSE?
A 2 year degree can offer specialized training and flexible schedule
Free or low-cost certifications are available online, at community college
OTJ training = professional trainer, hands-on & formal classroom training
All high-paying careers require a 4 year college degree
14
Which of the following statements is FALSE?
Being wise is developing a variety of skills - product research to analysis
Your choices as a consumer have no impact on the larger social environment
Using a cost-benefit analysis to your buying decison makes you wise
Wise consumers also enjoy improved health and have a positive impact
15
Which of the following account records would have the most current balance?
Account balance statement from ATM
All of these will have accurate account balances
Your monthly bank statement
Your own account register
16
What concept is best explained by the statement, "Money spent here cannot be spent there"
Delayed Gratification
Opportunity Cost
Significant Purchases
Law of Diminishing Return
17
This principle suggests that a certain amt of $ today has different buying power in the future.
Time Value of Money
Interest Rate
Inflation
Opportunity Cost
18
In a 2-car accident, you are at fault. The other driver is injured & your ins covers the medical exp. This is called:
Uninsured motorist protection
Comprehensive
Liability
Collision
19
Rent is a:
Intermittent Expense
Variable Expense
Fixed Expense
Discretionary Expense
20
A credit Score is intended to measure:
The risk of your not repaying a debt
Your financial success
The amount of money you have in the bank
Your income level

Financial Literacy Final Exam Flashcards | StudBud