What is the first step in creating a budget?

Track income and expenses, Set financial goals

What is the difference between gross pay and net pay?

Gross pay is before taxes and deductions; Net pay is take-home pay

If your income decreases, what is the best way to adjust your budget?

Eliminate discretionary spending

Diversification in investing means:

Spreading investments across various assets

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Financial Literacy Final

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Questions 14

Answers

1
When considering a car loan, which factor is most important to evaluate?
The color of the car
The dealership’s location
The loan’s interest rate
The car's brand
2
Which of the following is typically deducted from an employee's paycheck?
Income tax
Rent
Utility bills
Grocery expenses
3
Which of the following is considered a low-risk investment?
Bonds
Stocks
Cryptocurrency
Real estate
4
Which benefit is typically provided by employers?
Grocery vouchers
Free parking
Health insurance
Entertainment discounts
5
What is the first step in creating a budget?
Track income and expenses
Set financial goals
Invest in stocks
Save for emergencies
6
What form do most employees receive to help them file their taxes?
W-4
1040
W-2
1099
7
What is the primary benefit of using a debit card over a credit card?
Offers cashback rewards
Builds credit history
Provides a higher spending limit
Avoids interest charges
8
Which of the following is NOT a basic banking activity?
Writing checks
Making deposits
Creating a financial plan
Using a debit card
9
Which of the following strategies can help improve your credit score?
Closing old credit accounts
Maxing out credit cards
Keeping credit utilization low
Paying bills late
10
What is the difference between gross pay and net pay?
There is no difference between gross pay and net pay
Gross pay is before taxes and deductions; Net pay is take-home pay
Net pay is before taxes and deductions; Gross pay is take-home pay
11
What is a potential consequence of having a low credit score?
Easier approval for credit cards
Lower insurance premiums
Higher interest rates on loans
Higher income taxes
12
What is one advantage of buying a used car over a new car?
Higher resale value
Better warranty options
Lower maintenance costs
Lower depreciation
13
If your income decreases, what is the best way to adjust your budget?
Reduce savings contributions
Eliminate discretionary spending
Apply for more credit cards
Increase spending on entertainment
14
Diversification in investing means:
Investing only in real estate
Avoiding all high-risk investments
Putting all money into one stock
Spreading investments across various assets

Financial Literacy Final Flashcards | StudBud