Personal Financial Literacy 12 - Module 2 (Study Set #1)

In addition to money you earn from your job, what are other forms of income you may receive? Choose the three that apply. - A loan - Investments - Allowances - Gifts

- Investments - Allowances - Gifts

How does the Federal Reserve Bank differ from its predecessors, the First and Second Banks? - It receives the government's revenues and deposits. - It is the government's fiscal agent. - It has lasted beyond its initial charter period of 20 years. - It had a 20-year charter.

- It has lasted beyond its initial charter period of 20 years.

How can you be sure that the bank will notify you about their fees and any changes that may occur regarding their fees? - The banks are usually nice and just let you know. - The banks will only let you know if they deem it important. - It is the law for the bank to disclose fees and changes to fees to customers. - You must ask the bank for permission to see the fees and changes.

- It is the law for the bank to disclose fees and changes to fees to customers.

According to the lesson, what is our ultimate gift? - A debt-free life - Tithing 10% each month - Knowing Jesus and making Him known to the world - Saving to buy a new car

- Knowing Jesus and making Him known to the world

When you have more things and more choices, the paradox of prosperity says this will lead to what? - Less freedom - Better cars and houses - More income - More freedom

- Less freedom

What are some ways that you can avoid monthly and annual fees at your financial institution? Choose the three that apply. - Send thank you cards to the bank president - Maintain average daily balance - Maintain a minimum balance - Go paperless

- Maintain average daily balance - Maintain a minimum balance - Go paperless

What would be included in the "Live" piece of the pie? Select all that apply. Please do not guess, as incorrect answers are penalized for this question type. - Medical care - Food we eat - Housing - Taxes

- Medical care - Food we eat - Housing

What insures deposits for credit unions? - Direct deposits - FDIC - Fees - Interest - NCUA

- NCUA

What is the NCUA? - National Credit Union Acquisition - They buy out failing credit unions. - National Creditors Union of America - They are an organization that helps creditors collect debts. - National Credit Union Association - They insure deposits for credit unions. - National Car Ushers of America - They provide car parts.

- National Credit Union Association - They insure deposits for credit unions.

What happens if an FDIC insured bank fails? - Bank customers can be guaranteed that they get their insured deposits back in full. - Bank customers can apply for a loan to cover their deposits that were lost. - No FDIC insured bank has ever failed. - Bank customers can expect to lose everything.

- No FDIC insured bank has ever failed.

Since being created in 1933, the FDIC has caused participants to lose how much money? - Millions of dollars - Thousands of dollars - No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933. - Hundreds of dollars

- No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933.

What were some events associated with the Great Depression? Choose the three that apply. - One in four Americans were out of work. - Most Americans received a raise. - The stock market crashed. - Thousands of banks and businesses failed.

- One in four Americans were out of work. - The stock market crashed. - Thousands of banks and businesses failed.

Online financial institutions offer all the services that "brick and mortar" institutions offer EXCEPT which of the following? Choose the two that apply. - Savings accounts - Checking accounts - A teller working at a walk-up office - Branch manager offices where you can sit down and discuss your account - Fees for certain transactions/services - CDs

- A teller working at a walk-up office - Branch manager offices where you can sit down and discuss your account

__________ is a fee charged when you use an ATM outside your bank's network - overdraft fee - transaction fee - minimum balance fee - wire transaction fee - ATM fee

- ATM fee

_______ are electronic terminals that let you bank almost virtually any time. - EFTs - ATMs - Coffee kiosks - Brick and mortar banks

- ATMs

Choose all statements that describe a "bank." - Offers all services for free - Accepts deposits to accounts - Not for profit - Regulated by the government - Charges fees and interest to pay administrators and stock holders - A financial institution - Invests in capital markets to make money for the institution as well as its customers - Member-owned

- Accepts deposits to accounts - Regulated by the government - Charges fees and interest to pay administrators and stock holders - A financial institution - Invests in capital markets to make money for the institution as well as its customers

If you make an inquiry about your account and the bank has to take time to review all transactions and changes to your account, what fee might you incur? - Personnel research fee - Banking time management fee - Account research fee - Bank staffing fee

- Account research fee

What four responsibilities does the Federal Reserve System have that were also the responsibilities of its predecessors, the First and Second Bank of the United States? Choose the four correct answers. - Accepts deposits from the general public - Acts as the federal government's fiscal agent - Provides oversight of Secret Service protection for past presidents - Prints currency for other countries - Receives revenues for the federal government - Makes payments for the federal government - Makes business loans to individuals - Holds deposits for the federal government

- Acts as the federal government's fiscal agent - Receives revenues for the federal government - Makes payments for the federal government - Holds deposits for the federal government

One strategy for keeping up with important financial and personal information is to store that information on a secure website or in a safe deposit box. In which situation would this be important? - A robbery of important records or your computer - Being away from home and needing to know personal information (about health insurance, for instance) - A house fire or natural disaster that destroys all of your paper records - All of these

- All of these

Choose all statements that describe a "thrift." - Also known as a savings and loan association - Limited by law as to the amount of assets it can use for commercial loans - Specializes in making money off of mortgages and personal loans to its members - A financial institution - Not for profit - Deposits insured by the National Credit Union Administration - A mutually-held corporation with decisions made by depositors and borrowers - Invests in capital markets to make money for its customers

- Also known as a savings and loan association - Limited by law as to the amount of assets it can use for commercial loans - Specializes in making money off of mortgages and personal loans to its members - A financial institution - A mutually-held corporation with decisions made by depositors and borrowers

How much has the average credit union customer lost of their insured savings at a federally insured credit union? - $0 - $6,000 - $400 - $250,000

- $0

The current limit for insuring any account at participating banks through the FDIC is ________________. - $25,000 - $250,000 - $2,500 - $250

- $250,000

Which of the following would be considered a housing expense? - None of these - Payments for medical coverage - A mortgage payment or rental payment - Purchasing gifts

- A mortgage payment or rental payment

The First and Second Banks of the United States were given a ___-year charter.

20

Unlike its two predecessors, the Federal Reserve System was not limited to a _____________ by the passing of the McFadden Act of 1927.

20-year charter

The stock market's crash in 1929 and the financial system's prolonged crisis over the next several years led __________ to pass several laws that substantially changed the financial system and the Federal Reserve.

Congress

What is one consequence of not maintaining organized financial records? - You could pay off all debt. - You could get banned from your bank. - You could be charged fees or interest. - You could win the lottery.

You could be charged fees or interest.

Direct deposit is one way to keep your personal finances in order. What does direct deposit mean? - Your payroll check is deposited into your bank account on your regularly scheduled payday. - All deposits are directly sent to your bank account, no matter where the money comes from. - You take your payroll check and deposit it into your account directly. - Your paycheck is invested in the stock market.

Your payroll check is deposited into your bank account on your regularly scheduled payday.

A __________ is a financial institution that accepts deposits to accounts and, in turn, uses those monies to lend to individuals or invest in capital markets to earn interest for both the bank and its customers.

bank

Financial institutions must charge ________ and penalties to incur the costs of operating their business

fees

_________ is any money you have coming in from work, investments, or other sources.

income

Electronic banking or electronic funds transfer can include which of the following? Choose the six answers that apply. - Automatic insurance bill drafted off your account monthly - Using your personal computer to transfer money from your checking account to your savings account - Phone-activated transfer from one account to another - Passbook savings withdrawal at a teller window - Direct deposit of your payroll to your bank account - Writing a check and mailing it to pay a bill - ATM withdrawals - Cashing a paycheck at a drive-through bank window - Electronic check conversion at a store for payment for merchandise - Depositing cash into your checking account at a teller window

- Automatic insurance bill drafted off your account monthly - Using your personal computer to transfer money from your checking account to your savings account - Phone-activated transfer from one account to another - Direct deposit of your payroll to your bank account - ATM withdrawals - Electronic check conversion at a store for payment for merchandise

What are the three main types of financial institutions available to help you manage your finances? - Department stores, grocery stores, car dealers - Car loan stores, payday loans, loan sharks - Banks, credit unions, thrifts - Savings and loans, mortgage companies, banks

- Banks, credit unions, thrifts

Why is avoiding penalties and fees at financial institutions important? - Because it means more money for the bank - Because it shows faithfulness in a little thing (taking care of the money God has entrusted to you) - Because it makes us richer, which is the most important thing in life - Because the government can accrue those fees

- Because it shows faithfulness in a little thing (taking care of the money God has entrusted to you)

Select the item(s) that would be considered a "want." Choose the two that apply. Please do not guess, as incorrect answers are penalized for this question type. - Buying a cell phone - Paying your water bill - Buying a second pair of tennis shoes for sports - Buying groceries

- Buying a cell phone - Buying a second pair of tennis shoes for sports

What is an important financial question to ask when considering the purchase of a "want"? - Will it impress my friends? - Does it come in a different color? - How many months can I take to pay it off? - Can I afford it without going into debt?

- Can I afford it without going into debt?

The FDIC insures different kinds of accounts at participating financial institutions. Choose all the accounts or investing programs that are covered by the FDIC (there are five correct answers) - Certificate of deposits (CDs) - Statement savings accounts - Bonds - Checking accounts - IOUs - Passbook savings accounts - Money market deposit accounts - Stocks - Annuities - Mutual funds

- Certificate of deposits (CDs) - Statement savings accounts - Checking accounts - Passbook savings accounts - Money market deposit accounts

Which of the following can be considered a "need"? Choose the three that apply. Please do not guess, as incorrect answers are penalized for this question type. - iPhone - Clothing - Shelter - Food

- Clothing - Shelter - Food

To keep up with your money in the bank, what is the best way to organize your accounts? Choose the one that applies. Please do not guess, as incorrect answers are penalized for this question type. - Consolidate your accounts with separate allocations going to checking and savings. - Move your money around every few months, based on the best features offered by local banks. - Have an account at every bank in town. - Keep all your money in a safe at home or under your mattress.

- Consolidate your accounts with separate allocations going to checking and savings.

Which of the following are considered "not for profit" because all profits and surpluses are used to pay for administrative costs and services to members? - Small businesses - Banks - Credit unions - Corporations

- Credit unions

What is it called when you authorize specific deposits, such as a paycheck, on a regular basis? - Complete deposit - Fast deposit - Updated deposit - Direct deposit

- Direct deposit

A bank service that accepts your paycheck into your account electronically is called what? - Direct deposits - FDIC - Fees - Interest - NCUA

- Direct deposits

What is an EFT? - Easy Fun Time - Electronic Financial Trade - Electronic Funds Transfer - Envelope Finance Trade

- Electronic Funds Transfer

After World War II, Congress passed the ________________, which defined the goals of economic policy: to "promote maximum employment, production, and purchasing power." - Treasury Act of 1980 - The Federal Reserve Act - Employment Act of 1946 - The Economy Act of 1888

- Employment Act of 1946

The cost of something is called what? - Banking - None of these - Expenses - Income

- Expenses

What insures deposits for banks and thrift institutions? - Direct deposits - FDIC - Fees - Interest - NCUA

- FDIC

Money that the bank charges and deducts from your account is called what? - Direct deposits - FDIC - Fees - Interest - NCUA

- Fees

What was the first bank in the United States called? - First Bank - Bank of America - Hamilton Bank - Wells Fargo

- First Bank

What type of expense would your daily coffee purchase be? - Food expense - Housing expense - Additional expense - None of these

- Food expense

Which of the following are are ways you can protect your money? Choose the three that apply. - Frequently check accounts - Freely give your Social Security number away - Watch out for pop-ups asking for personal information when banking online - Use a mix of security tools and procedures

- Frequently check accounts - Watch out for pop-ups asking for personal information when banking online - Use a mix of security tools and procedures

If God gives you the ability to take a lot of responsibility with high pay or generate a lot of wealth, to what should that be attributed? - Luck - Hard work only - His blessing - A gift from the universe

- His blessing

As Christians, we know our true prosperity is found where? - In our tithing - In Christ - In our bank account - In our driveway

- In Christ

The percentage of your balance that the bank pays you for keeping your money at that bank is called what? - Direct deposits - FDIC - Fees - Interest - NCUA

- Interest

You get a notification from your bank that when you purchased dinner last night, you spent more than what was in your account and are being assessed a fee. What type of fee can you expect? - Membership fee - Overdraft fee - Minimum balance fee - Transaction fee

- Overdraft fee

What is the source of funding used by the FDIC to pay insured depositors of a failed bank? - Premiums that are paid by bank investors and depositors - Premiums already paid by insured banks and interest earnings on its investment portfolio of U.S. Treasury securities - Income taxes and sales taxes - State and federal governments pitch in money to back the FDIC.

- Premiums already paid by insured banks and interest earnings on its investment portfolio of U.S. Treasury securities

Choose all statements that describe a "credit union." - Profits and surpluses go to pay administrators and provide services for members - Open for anyone to join - no qualifications necessary - Not for profit - Accepts deposits to accounts like a bank - Provides services only to its members - A financial institution - Profits go to stock holders that are not members - Member-owned

- Profits and surpluses go to pay administrators and provide services for members - Not for profit - Accepts deposits to accounts like a bank - Provides services only to its members - A financial institution - Member-owned

Which of the following would be a good answer to the question, "How much is enough?" - Constantly upgrading my electronics, clothes, and car should be enough. - Since Christians in third-world countries have very little, I should also do without many essentials. - Whatever I need, I should be able to buy. - Purchasing items to meet your real needs and then splurging occasionally to buy something special should be enough.

- Purchasing items to meet your real needs and then splurging occasionally to buy something special should be enough.

Which of the following can you do with an ATM card? Choose the three that apply. Please not guess, as incorrect answers are penalized for this question type. - Transfer funds between accounts - Reverse bank fees - Withdraw cash - Make deposits

- Reverse bank fees

________________ are similar to credit unions. They are financial institutions that are overseen by the Office of the Comptroller of the Currency. They concentrate on savings accounts and loans, especially for construction. - Mortgage loans - Savings and loans associations - Savings accounts - Personal checking accounts

- Savings and loans associations

We must purchase things in this world. However, the world's culture makes us feel that we must be driven by which of the following things? Choose all that apply. - Prayer - Significance - Security - Success

- Significance - Security - Success

Why is it important for everyone with monetary and other assets to have a will? Choose the six answers that apply. - So others won't have to decide what is best to do with your possessions and money - So the state won't be in control of your estate - Because it relieves loved ones of added responsibility at your death - So loved ones and family will know what you want to do with your possessions and money once you have died - So the IRS won't take all your money to cover taxes - Because it looks good on a resume - Because it makes sure all possessions and assets will go to those who have been specifically chosen to receive them - Because wills are fun to set up - Because it benefits those who you wish to bless after you are no longer able to help them in person - Because it helps keep lawyers in business

- So others won't have to decide what is best to do with your possessions and money - So the state won't be in control of your estate - Because it relieves loved ones of added responsibility at your death - So loved ones and family will know what you want to do with your possessions and money once you have died - Because it makes sure all possessions and assets will go to those who have been specifically chosen to receive them - Because it benefits those who you wish to bless after you are no longer able to help them in person

Even though you may not deal with regular income and bills as a teenager, what is still a good idea to do? - Spend as much as possible to learn how the economy works. - Start tracking your finances and keep up with any personal information that you may need when planning for college or entering the workforce. - Don't worry about income and bills - there is plenty of time for that when you are an adult. - Save every penny and spend zero dollars on any fun.

- Start tracking your finances and keep up with any personal information that you may need when planning for college or entering the workforce.

What is the Federal Reserve Bank commonly known as? - The Fed - The Government's Bank - The FRB - The Big Bank

- The Fed

Who regulates the action of banks? - The CEO of each bank - Shareholders - Customers - The government

- The government

What is also known as a savings and loans association and is a financial institution that specializes in accepting savings deposits and making money off of mortgages and personal loans to its members? - Bank - Church - Thrift - Corporation

- Thrift

A debit card purchase is much like a credit card purchase except _____________________________. - a debit card purchase transfers money directly from your checking or savings account - a debit card purchase takes longer to process - a debit card purchase has extra fees for processing - a debit card purchase can't be returned

- a debit card purchase transfers money directly from your checking or savings account

People enjoy using online banking because it is ____________________. - secretive and cheap - the only way you can make changes to your bank account - convenient and saves time - fun

- convenient and saves time

Our God will guide us in making the best financial decisions if we let Him. Proverbs 3:5-6 says, "Trust in the Lord with all your ______, and do not lean on your own __________. In all your ways acknowledge him, and he will make straight your paths." - feelings, thoughts - heart, understanding - money, bank - income, job

- heart, understanding

In the 1970's under the Carter administration, the United States was plagued with __________________. - high purchasing and low gasoline prices - high inflation and high unemployment - mad cow disease and salmonella - low interest rates and high prices

- high inflation and high unemployment

You can use your debit card to make purchases _____________________. Choose the three answers that apply. - in person at a store - only where credit cards are accepted - only where cash is accepted - for just six transactions a month - over the phone - online - if you have at least $500.00 in your associated account

- in person at a store - over the phone - online

It is necessary to sometimes allocate _______ resources among ________ alternatives. - limited, unlimited - important, unimportant - living, restrictive - unlimited, limited

- limited, unlimited

__________ is a fee that a credit union charges its members to open an account - overdraft fee - transaction fee - membership balance fee - wire transaction fee - ATM fee

- membership balance fee

Credit unions often require members to deposit an amount into their accounts that must be maintained to avoid incurring penalties... - overdraft fees - minimum balance fees - membership fees - monthly & annual fees

- membership fees

Based on a minimum balance you are required to maintain in your account... - overdraft fees - minimum balance fees - membership fees - monthly & annual fees

- minimum balance fees

Minimum fees that an institution charges simply to have an account with them... - overdraft fees - minimum balance fees - membership fees - monthly & annual fees

- monthly & annual fees

In the same way that you as a student must keep order to your class materials, we must keep a(n) _________ system to our financial materials. - nonexistent - chaotic - simple - orderly

- orderly

__________ is a fee charged when you deposit a check from someone, and it is returned because the check has insufficient funds - overdraft fee - transaction fee - minimum balance fee - wire transaction fee - ATM fee

- overdraft fee

Assessed when you pay for something with either a check or a debit card and you do not have sufficient funds to cover your transaction... - overdraft fees - minimum balance fees - membership fees - monthly & annual fees

- overdraft fees

Regardless of the financial institution you choose, be sure you know how your money is _______________. - stolen - protected - hidden - spent

- protected

The Share Insurance Fund has the backing of the full faith and credit of ________________. - the United States - Congress - Bank of America - Great Britain

- the United States

In Ron Blue's video that discusses the trailer story, Mr. Blue says _________________ can add complication as we get older. - the amount of houses we own - the amount of choices we have to make - our health conditions - our marital status

- the amount of choices we have to make

__________ is a fee charged when you exceed a set number of transactions in a month for deposits or withdrawals - overdraft fee - transaction fee - minimum balance fee - wire transaction fee - ATM fee

- transaction fee

__________ is a fee charged when you wire money from your account to someone else's account - overdraft fee - transaction fee - minimum balance fee - wire transaction fee - ATM fee

- wire transaction fee

The Federal Reserve System was established in _________ and was the __________ attempt by the United States government to establish a central banking system

1) 1913 2) third

The Banking Act of 1933 established the __________________________________ to protect the deposits of consumers against bank failure, and ___________ financial institutions are members of the Federal Reserve System today.

1) FDIC 2) some

Money you remove from your account is called a __________. Money you add to your account is called a ____________

1) withdrawal 2) deposit

Determine which of the following can be considered income. Choose all that apply. Please do not guess, as incorrect answers are penalized for this question type. - Investments - What you are paid from your job - Gifts - Social Security payments

all of these

Credit unions often require members to deposit an amount into their accounts that must be maintained to avoid incurring penalties; this is called a ________________ fee

membership

Our world culture often promotes the idea that more_________ will provide safety and success. People often fall into the trap that more material items equate to prosperity.

money