Economics and personal finace Final

Which of the following paycheck withholdings puts money into a retirement investment fund that you will manage?

401(k) contribution

Which of the following describes what a "dependent" is for tax purposes?

A child or adult relative that you support financially

Which statement is TRUE about the value of a college degree

A college graduate can expect to earn, on average, more than a high school graduate over a career

In 1990, 6 percent of the fruits and vegetables available in the United States came from Mexico and Canada. In 2007, that percentage had increased to about 12 percent.Based on this information, which statement best describes a benefit of the 1994 North American Free Trade Agreement (NAFTA)?

A reduction in tariffs encourages an increase in trade.

Akshay is 25 years old and worked at a cafe while he was a college senior in Boston, Massachusetts. After graduating in June, he moved back to his home in California and started a full-time job in September. Which of the following statements is true?

Akshay will need to file a federal tax return and a state tax return for both Massachusetts and California

Due to inflation in Argentina, the Argentinian peso has become weaker against the currencies of Argentina's trading partners.What will be the result of this?

Argentina's imports will decrease and exports will increase.

Read the excerpt and answer the question below "The Medicare Hospital Insurance (HI) Trust Fund that pays hospital benefits had negative cash flows in 2004 and annual cash flow deficits are expected to continue and to grow rapidly after 2010 as baby boomers begin to retire." Social Security and Medicare Board of Trustees Summary Report, March 2005 What choices will be necessary to solve the problem that is described in the report?

Benefits will have to be reduced or payroll taxes will need to be raised

Janelle has been accepted to College A and College B and is comparing their financial aid packages. College A has a sticker price of $28,000 and net price of $12,000. College B has a sticker price of $60,000 and net price of $9,000. Which statement below is TRUE?

College B is going to give her more grants and scholarships

. Which formula below correctly calculates the net price of attending a college?

Cost of Attendance - Expected Family Contribution = net price

When should you first file the FAFSA? *

December of your last year of high school

Which repayment option does NOT accrue interest while your required payments are paused?

Deferment

What would be the most likely effect of the Euro becoming weaker against the U.S. dollar?

European exports to the United States would increase.

In order to qualify for financial aid, which application must you submit?

FAFSA

During a period of financial hardship, you can apply for this to pause student loan payments but interest keeps adding to your total loan amount...

Forbearance

What types of funds are used in paying for college and in what order should you use them?

Grants and scholarships, your money, borrowed money

Which of these options lists the types of financial aid in order from LOWEST cost to HIGHEST cost?

Grants/Scholarships, Work-study, Federal loans, Private loans

Which measurement best indicates the economic growth of a country?

Gross Domestic Product

What does the term "withholding" mean in reference to your paycheck?

How much is being taken out of your paycheck for things like taxes, employer sponsored health insurance, and retirement

What is the name of the tax form that requires you to provide identification and proves you are eligible to work in the U.S.?

I-9

How much does it cost to file the FAFSA?

It is free

10. Although it's not a type of financial aid, how can transferring credits from a community college help save you money on college costs?

It reduces amount of credits you'll have to pay for at your 4-year college

Jessica is 16 years old and earned $1,100 through her photography side gig. Her parents can claim her as a dependent on their tax return. Which statement is NOT true her situation?

Jessica should expect to receive a W-2 in January

Keith's tuition, room & board, and fees for freshman year total $26,000. Including scholarships, grants, and federal student loans, his financial aid package is $25,500. Which option below is both realistic and the most financially responsible?

Keith should pick up a part-time job to cover his remaining costs and personal expenses

Ella is a 20 year old college sophomore that lives with her parents. She earns $8000/yr as a waitress at a restaurant. Does she need to file a tax return?

No because she is a dependent and earns less than $12950

Marquis is starting a fast food job during his senior year of high school. He lives with his parents and they will claim him as a dependent on their taxes this year. He earns $2000. Based on how he completed his W-4, his employer withheld $200 in federal income taxes from his paychecks. What will happen if Marquis doesn't file taxes in April?

Nothing will happen, but Marquis will miss out on his potential refund

The Federal Reserve typically plays a large role in promoting recoveries by reducing the federal funds rate and keeping it low until the economy is again on a solid footing. Reducing the federal funds rate tends to reduce other interest rates and boost asset prices, thus encouraging spending and investment throughout the economy.—Janet L. Yellen, Vice Chair of the Board of Governors of the Federal Reserve System, February 11, 2013 What is the potential negative effect of using the policy describe in this excerpt?

Reducing the federal funds rate to lower interest rates will lead to price inflation.

Which of the following is a good strategy to use when it comes to paying for college?

Save your earnings from your jobs so that you can reduce the amount of loans you need to take

Juan owns a landscape business. What tax will he have to pay in addition to his income taxes?

Self-employment tax of 15.3%

Mandatory government spending includes which of the following?

Social Security and Medicare

Which federal student loan repayment plan requires the same minimum payment for the life of the loan, and ensures the borrower will pay the loan in full in ten years?*

Standard repayment plan

The federal government makes interest payments on __________ while you're enrolled in school at least half-time, for the first six months after you leave school, and during any period of deferment.

Subsidized federal loans

Why is it important to be extremely careful when completing your 1040 form?

The 1040 form determines whether you owe additional taxes or are entitled to receive a refund from the government

Which is an example of global interdependence?

The United States imports clothing and exports aircraft.

Which statement about the W-2 form is TRUE?

The W-2 form shows you how much income you earned and how much tax was withheld from a particular job

Read the excerpt and answer the question below "There are now 3.3 workers paying into the system for each person receiving benefits, with money not needed for current benefits going into the Social Security Trust Fund. But as the population ages, it is projected that the ratio will fall to 2.1 workers per beneficiary. At some point, the government would need to draw on the Trust Fund to continue paying promised benefits." Upfront,"Social Insecurity", March 28, 2005 What problem do we have when the situation described above becomes a reality?

The benefits being paid to Social Security recipients will be more than the payroll taxes needed to pay for it

18. As a result of completing the FAFSA, you get a student aid report (SAR) that indicates your EFC is $10,000. What does this mean?

The government expects that your family can contribute about $10,000 to the cost of your education

Which is a likely effect of increasing tariffs on imported cars?

The price consumers pay for imported cars will rise

If a taxpayer fills out their W-4 in a way that does not withhold enough money to cover their tax obligation, what is the most likely outcome after they file their taxes?

They will owe a payment to the IRS

Which of the following is considered a direct cost of attendance (COA)?

Tuition

Who is eligible to receive Direct Subsidized loans?

Undergraduate students

You are starting your first job and you are asked to complete some paperwork on your first day. Which form will determine how much money is withheld from your paycheck for taxes?

W-4

When determining whether you NEED to file a federal tax return, each of these questions matters EXCEPT...

What state do you live in?

When do you start paying income taxes?

When you make more than the minimum income requirement

Your friend Laila is talking to you about the benefits of tax filing websites. Which of the following is true?

You can avoid the costs of having to pay a professional, though you may have to pay for e-filing online

If your only income is salary paid by your employer, which of these statements about filing your taxes is true?

You must file your tax return by the deadline (typically April 15th of the following year) or request an extension by that date

What would negative growth in GDP over an extended period of time indicate?

a contraction or recession in the business cycle

What is an income-driven repayment plan?

a plan that lowers your payments to only 10-20% of your monthly income

Which information would NOT be found on your Student Aid Report (SAR)?

a record of all scholarships you have applied for

A U.S. auto manufacturer plans to relocate plant operations to Mexico as a result of the North American Free Trade Agreement (NAFTA). What would be a negative impact of caused by this relocation?

automotive factory jobs that used to exist in the U.S. would be outsourced

Which term is defined as the difference between the value of a nation's imports and the value of its exports?

balance of trade

How does the Federal Reserve System act to reduce inflation?

by increasing interest rates

What term is used to describe the value of one nation's currency compared to another nation's currency?

exchange rate

Real gross domestic product—the output of goods and services produced by labor and property located in the United States—increased at an annual rate of 3.1 percent in the third quarter of 2012. . . . In the second quarter, real GDP increased 1.3 percent.—Bureau of Economic Analysis, "National Income and Product Accounts," 2012 Which part of the business cycle is described by this excerpt?

expansion

NAFTA is an agreement among the U.S., Canada, and Mexico primarily intended to promote

free trade.

Which way to pay for college is MOST likely to be based on someone's financial need?

grants

What does the Consumer Price Index (CPI) measure?

inflation

Which goal will be achieved through a tight money policy?

inflation can be reduced

What would happen if the Federal Reserve lowered the federal funds rate?

interest rates would go lower

How does a higher national debt threaten the standard of living within a country?

it will result in higher taxes and spending cuts in the future

What is one of the disadvantages of free trade?

job losses in manufacturing from outsourcing

Use the list below to answer the question. • Unemployment rate is 10% • Real GDP has fallen by .05% Which action would the Federal Reserve most likely take to address the conditions on this list?

lowering interest rates

Which action would the Federal Reserve take to help reduce unemployment?

lowering interest rates

Who benefits the most from the Social Security and Medicare programs?

people who have reached the federal retirement age

Which form of financial aid has the highest interest rates?*

private student loans

Use the list below to answer the question. • The economy has contracted in three consecutive quarters.•Annual Gross Domestic Product (GDP) fell 1.4% compared with the year before.•Estimates report that the economy will continue to contract in the fourth quarter. This scenario describes which part of the business cycle?

recession

Which fiscal policy would most likely be enacted by the U.S. Congress and the president to stimulate economic growth?

reducing income taxes to stimulate spending

When you complete your 1040 form, if you overpaid your taxes and the government owes you money, that is called a __________.

refund

Read the excerpt and answer the question below "The Triangle's jobless rate remained flat at 4.4 percent in March and remains stable at a level that economists call "full employment," which essentially means it's as good it's likely to get for now. The region comprising Raleigh, Durham, Chapel Hill and surrounding towns had dipped as low as 4.1 percent in May and was at 4.7 percent 12 months ago. The Triangle features one of North Carolina's strongest economies and remains well below the statewide average of 4.9 percent in March." News & Observer, May 3, 2017 What is the reason for the economic condition in the Triangle region of Raleigh, Durham and Chapel Hill?

research and technology services in the Research Triangle Park (RTP) are the fastest growing sector of the U.S. economy

What sector is the largest part of the American economy today?

services

Which action should a country take to gain a comparative advantage?

specialize in producing the things it can produce at the lowest opportunity cost

Which term is defined as a tax on imported goods?

tariff

Which international organization's primary mission is to preserve world peace?

the United Nations (UN)

Who receives and uses the information submitted in your FAFSA?*

the government and schools you have applied to to determine your qualifications for financial aid

Why do industrialized nations like the U.S. provide foreign aid to developing nations?

to bring stability by helping with infrastructure and reducing poverty

What is the purpose of Medicaid, Food stamps, and TANF payments?

to help reduce poverty

Use the excerpt below to answer the question. In March 2002, the [George W.] Bush administration imposed tariffs of up to 30 percent on 10 different categories of steel imported from Europe, Asia, and South America.—Congressional Record, 108th Congress, 2003 What is most likely the purpose of this tariff?

to protect the U.S. steel industry

What is the purpose of the European Union (EU)?

to support free trade and a common currency between European nations

What is one characteristic of a period of recession?

unemployment tends to rise

What is the downside of making a student loan repayment plan that lowers your monthly payments?

you will have to make more payments so you will end up paying more over the life of the loan