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JUNE Summer Consumer Final Review Flashcards | StudBud
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JUNE Summer Consumer Final Review
JUNE Summer Consumer Final Review
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1
Gross Pay = $1,000. $100 goes to Fed income tax, $50 state income tax & $62 Soc Sec. Find the total % of tax withheld.
6.2%
21.2%
5%
10%
2
What is an advantage of of buying an index fund instead of a single stock?
An index fund has many investments so you minimize risk
There are no advantages to buying an index fund
Index funds have a much higher potential for return than single stock
Index funds are much riskier than a single stock
3
What makes a loan secured credit?
You can't secure a loan
A credit card
Paying a security deposit upfront
Collateral, like a home
4
When comparing Peer to Peer apps, what should you avoid?
One that is accepted in many places
Strong security settings
High fees and low security
5
Which type of economy has a central authority (or governement) make the economic decisions for a country?
Mixed Economy
Traditional Economy
Command Economy
Market Economy
6
Why is having your financial instituion FDIC insured so important?
It helps you earn higher interest rates on your accounts
It is actually not very important
It protects money in your accounts if the bank fails
It protects your money if your overdraw on your account
7
Yr 1 balance: $2,000. Yr 1 interest: $200. Yr 1 end: $2,200. Yr. 2 interest: $220. What is the end of year 2 balance?
$2,420
$2,000
$420
$2,220
8
What is an introductory APR offer for a credit card?
A lower APR used to attract new customers, this will increase later
The APR most credit cards will have for purchases
A higher APR for new users, this will decrease later
The only APR the credit card will charge
9
Why should you consider getting overdraft protection for your checking account.
It will protect money in your different banking account if the bank fails
You should not consider getting it
It will ensure you have the highest interest rates and the lowest fees
To help avoid or minimize fees if spend too much from your checking account
10
If you read the newspaper and saw GDP and CPI is decreasing, what part of the economic cycle would we most likely be in?
Economic Boom
Recession
Peak
Expansion
11
If you have collision & liability insurance and you cause an accident. What will you likely be responsible for paying?
Insurance will pay for damages to your car & you will cover the car you hit
You will pay for damages to your car & insurance will cover the car you hit
Insurance will cover the costs of damages to all cars in the accident
You pay a deductible for collision & then ins. will cover all other costs
12
What are some of the major drawbacks of havings a low credit score?
You might not be able to get loans or you will pay more interest for a loan
It will decrease the amount of total debt you accumulate
There are no major concerns to having a low credit score
It could affect the amount of income you make
13
The cost of rubber used to make the tires in mountain bikes increases. How will this affect the supply of bikes?
Supply will increase because of changes in technology.
Supply will decrease because of increase in technology.
Supply will decrease because of increase in resource prices.
Supply will increase because of increase in resources prices.
14
Which tax system taxes higher incomes a higher % and lower income at a lower %
Progressive Tax
Proportional Tax
No tax systems do this
Regressive Tax
15
Some financial experts recommend using the 50/30/20 rule to analyze your monthly budget. What do those numbers mean?
50% of your income should be spent on wants, 30% on needs & 20% on savings
50% of your income should be spent on savings, 30% on needs & 20% on wants
50% of your income should be spent on needs, 30% on wants & 20% on savings
50% of your income should be spent on wants, 30% on needs & 20% on savings
16
If the bikes were priced at $200, what would likely be the result?
Surplus of 3000 bikes
Shortage of 3000 bikes
Surplus of 1000 bikes
Shortage of 1000 bikes
17
What is the equilibrium price for Mountain Bikes?
$350
$300
$250
$400
18
Companies use pay and perks like insurance or paid vacation to attract good workers. What are those perks called?
Benefits
Deductions
Optional
Withholdings
19
What is an insurance premium?
A regular payment made to an insurance company just to have coverage
A payment you make before you have surgery
A payment you make when you file a claim
A one time payment you make when you sign your policy
20
Which is a best practice for managing debt?
Skip payments, but pay double the next month
Organizing your bills and paying them on time
Use your credit card for everyday purchases
Use up to the maximum limit on your credit cards, but not go over
21
To file your taxes, you need your income and withholdings for the year. What form does an employer send with that info?
Form 1040
Form W4
Form IL 1040
Form W2
22
If you want to add additional coverage to an insurance policy, what is that called?
Premium
Endorsement or Rider
Deductible
Exclusion
23
For your credit card bill, what amount do you have to pay to avoid paying fees, but no avoid interest?
New balance
Minimum payment due
Credit availible
Credit line
24
Which type of economy has the people (businesses and consumers) make the economic decisions for country?
Command Economy
Market Economy
Mixed Economy
Traditional Economy
25
Diversification is one thing to consider when choosing where to invest your money. Why is diversification important?
It helps increase the volatility of your investments
It allows you to access your money at any time, in case of an emergency.
It helps to minimize risk because you invest in different places
It means you will pay less in taxes
26
How does a Roth IRA differ from a Traditional IRA?
You can only get a Traditional IRA through a private employer
Trad. IRA- contributions are taxed & when you retire, earnings are tax free
Roth IRA- contributions are taxed & when you retire, earnings are tax free
You can only get a Roth IRA through a private employer
27
Which type of interest will earn you more money on your savings account?
Simple Interest
Compound interest
28
What is a benefit of an internet bank?
It typically has higher interest rates on savings accounts and lower fees
It has low interest rates for your savings accounts
You can visit the bank if you have issues and want to talk with a teller
It is owned by its members and a for profit bank
29
When do you pay a deductible?
Every month in order to have insurance coverage
When you sign the policy for your insurance
When you file a claim, before the insurance company covers any damages
You typically do not have deductibles for car and home insurances
30
Homeowners insurance can cover your house, valuable items you own, and people getting hurt on your property.
False
True
31
If your employer collected federal and state taxes for you throughout the year, why do you have to file taxes each year?
To ask the federal and state governement what they think you owe
To make sure the right amount of each tax was withheld throughout the year
If your employer withholds taxes, you do not need to file taxes each year
To pay your employer the additional tax due
32
If you rented an apartment you would be responsible for all of the following, EXCEPT...
making repairs for any damage you cause
Paying for rent on time
Replacing the roof if it is too old
Being respectful of any neighbors in the building
33
Which tax form do you complete to file your federal income tax?
Form W2
Form 1040
Form IL 1040
Form W4
34
Which tax system taxes all incomes at the same % rate?
Progressive Tax
No taxe systems do this
Regressive Tax
Proportional Tax
