Personal Financial Literacy Final Practice

You earn $50,000 per year and paid 10 percent in taxes this year. The government increased the tax rate to 20 percent for next year. Which amount will you pay in taxes next year? (1.03)

$10,000

Marlon had $22,000 of taxable income in 2018. Based on the table, how much federal income tax will Marlon owe in 2018? includes graph (1.03)

$2,449.50

Your friend's job pays $10 per hour, and he works 40 hours per week. His tax rate is 20 percent. Assuming he works 50 weeks of the year, his yearly gross income is (1.03)

$20,000

You earn $30,000 per year, and the federal tax rate is 10 percent. Your gross income is (1.03)

$30,000

A paycheck is issued for $329.40. The paystub reflects an amount earned of $400.00, Medicare tax of $5.80, Social Security tax of $24.80, and a federal tax of $40.00. What is the gross income for the paycheck? (1.02)

$400.00

A common marketing strategy used by retailers to make products appear more attractive is to list an $8 item for (2.01)

$7.99

Imagine you live in a society with progressive taxation. Your friend makes half of your salary and pays 20 percent in income taxes. Which rate most likely would be your income tax rate? (1.03)

40 percent

Which of the following is a portable savings plan that can be applied towards a private college? (2.02)

529 plan

Veronica has received a $3,000 gift and is looking for a bank to start a savings account. Which option would be the best for her if the current inflation rate is 2.5%? (2.04)

A bank that offers 4% interest

Rick has three credit cards he uses for gas, entertainment, and groceries. All card balances are close to the limit, and he forgot to make a monthly payment on one card two months ago. What could be a future consequence of this behavior? (3.03)

A higher interest rate

Jason and his parents reside in Florida and have a pre-paid college plan. They are researching college options for Jason. What would keep education costs the lowest? (2.02)

A state university

Which of the following is a negative externality of a parent taking afternoon and evening classes at a local college? (2.01)

A tighter schedule limiting time with children

The sales tax in the state is 7 percent. Based on that rate, who has the higher tax burden? Annual Income Alex - $20,000 Beatrice - $190,000 Julio - $80,000 Roberta - $60,000 (1.03)

Alex

Which conclusion is accurately reflected in the data table? includes graph (1.01)

As your level of education increases, your income potential also increases.

Dalvin is considering multiple job offers. His wife recently had a baby with serious health issues. What non-income factor would influence his decision? (1.01)

Availability of benefits

An electronics store advertised a television as $17 a day for 30 days rather than the full price of $510. Why did the store choose to advertise the television this way? (2.01)

Because it looks like a deal

Yasmin notices that her toothpaste label says that it will make the user smarter. She thinks this is an incorrect and misleading claim. Which government agency should she contact? (2.03)

Bureau of Consumer Protection

Marlon wants to save money over a long period of time. He does not need to have easy access to the money, and he is worried about losing his investment. Which of the following options would best suit his needs? (2.02)

CD

Which type of bankruptcy will remain in an individual's credit history for 10 years? (3.04)

Chapter 7

Two technology companies are experiencing an increase in demand for their products and need to hire more employees. Based on the table, which company is expected to pay higher wages? includes graph (1.02)

Company A because it requires a higher level of education

Which of the following is offered by employers as an incentive to save? (2.02)

Contribution matching

What is the relationship between a higher nominal rate and a lower real interest? (2.04)

Decreased purchasing power

Which of these can lower the amount of monthly payments on a mortgage? (3.02)

Down payment

Which of the following is a characteristic of a checking account? (2.02)

Easy access to funds through a debit card

Zoe's new job will require her to drive a farther distance. She budgets 10 percent more for gas, for a total of 20 percent for gas in her new budget, but that means she must change what she is willing to spend in other categories. Which of these could represent new values in Zoe's budget? includes graph (1.04)

Entertainment 10%, Clothing 10%

From which organization can you request free information about your credit score? (3.03)

Equifax

Who would pay the least as a percentage of income under a regressive tax? (1.03)

Factory owner earning $90,000 per year

Which federal agency protects bank deposits up to $250,000 per institution? (2.03)

Federal Deposit Insurance Corporation

Which government agency oversees the Bureau of Consumer Protection? (2.03)

Federal Trade Commission

Which of these is an action by a person who chooses immediate spending over saving? (2.02)

Financing a brand-new car

Which career field is likely to experience growth in salary in the next few years below the annual median? includes graph (1.02)

Government

Carolina accepted her first job and moved out of her parents' house and into an apartment. What is most likely to be important from now on to keep her credit healthy? (3.03)

Her rental history

Which factor could influence an employer to increase an employee's wages? (1.02)

High worker productivity

Which may be a cost of inflation? (2.04)

Higher prices

Which type of tax is based on the amount of money a person earns in a year and is collected by the federal government? (1.03)

Income tax

After she creates the budget above, Zoe moves in with a roommate so she can save money for a car. Her rent is now 25 percent of her salary. Which of these should she do to buy a car quickly? (1.04)

Increase savings to 25 percent, and decrease clothing to 10 percent.

Which may be a benefit of inflation? (2.04)

Increased business profits

Which tax is paid to a third party? (1.03)

Indirect

An infomercial selling a product for "five low monthly payments of just $99" is using which sales tactic? (2.01)

Installment Pricing

Which of these is the biggest challenge to saving money? (2.02)

Instant gratification

What is typically renegotiated through counseling between individuals with excessive debt and their lenders? (3.04)

Interest and fees

Elle is considering purchasing a Tyson Electrosonic Hair Dryer online. Which of the following could influence her to consider a different product? (2.01)

It costs $25 to get the hair dryer shipped.

Which explains a way the U.S. government has created incentives for people to save? (2.03)

It has established protections for monies placed into banks.

Frank works for a nutrition counseling company and is now being considered for a promotion. Why might his employer request to check his credit history? (3.03)

It might be negative for the company to promote a person with large unpaid health-related bills.

What is the role of the Federal Deposit Insurance Corporation? (2.03)

It protects up to $250,000 of customer deposits.

What is the role of the Securities and Exchange Commission? (2.03)

It regulates the business practices of stockbrokers.

Sara is considering multiple job offers. She enjoys outdoor activities like going to the beach. What non-income factor would influence her decision? (1.01)

Location

Love to Learn Daycare is over budget. Which is the easiest category in which to cut costs? (1.04)

Miscellaneous

Which account option offers a higher rate of return in exchange for deposits that are larger than normal? (2.02)

Money market

Which of the following is a negative externality? (2.01)

Noise pollution

Which career field is likely to experience increased job openings and security over the next few years? includes graph (1.02)

Nursing

Which factor that affects income is out of a worker's personal control? (1.02)

Politics

A price that is listed as $7.99 is an example of which sales tactic? (2.01)

Power of Nine

Which of the following methods to save for education may not be available for use at a private or out-of-state school? (2.02)

Pre-paid plan

Why are employers willing to pay productive workers higher wages than less productive workers? (1.02)

Productive workers save businesses time and money in the long term.

Which tax uses the same rate for all income levels? (1.03)

Proportional

Cameran purchased tickets to a concert from an online vendor. Upon arriving at the concert, she discovered her seats did not exist in the venue. What action should Cameran take to seek retribution? (2.03)

Report the incident to the Federal Trade Commission.

Louis donated money to what he believed to be a reputable charity. He later discovered it was a scam. What action should he take to try to recover the money he lost? (2.03)

Report the incident to the Federal Trade Commission.

Who would pay the most as a percentage of income under a regressive tax? (1.03)

Roofer earning $18,000 per year

Frank is already taking advantage of his employer benefit package but wants to find options to save for retirement that offer tax incentives. Which of the following should Frank explore? (2.02)

Roth IRA

Which of the following is a government incentive to save that offers a tax benefit? (2.02)

Roth IRA

Which of the following is an example of an indirect tax? (1.03)

Sales tax

Which type of tax is added to the price of goods and services when a person buys them? (1.03)

Sales tax

Tamica doesn't save because she lives with her parents and doesn't think she needs any savings since they cover most of her bills. Which of the following is an argument against her thinking? (2.02)

Saving helps people prepare for emergencies.

Which account option allows the account holder to earn interest on their money while allowing funds to be withdrawn at will without a fee or penalty? (2.02)

Savings

Why might a person choose to attend a technical school over a four-year university? (1.01)

Some trades are in higher demand than certain degrees.

Love to Learn Daycare has fewer children enrolled in June-August than during the traditional school year. Which costs would most likely be budgeted lower for those months as a result? includes graph (1.04)

Supplies and miscellaneous

Which of these scenarios would lead to an industry requiring more productive workers? (1.02)

Supply of goods decreases, and demand for goods increases.

Which of the following is a way the government encourages employees to save for retirement? (2.02)

Tax incentives

Trina applied for a new credit card with an introductory APR offer of 7.99% or 8.99%. What will most likely happen in the second year? (3.01)

The APR will increase quite substantially.

Patrick's lease is ending soon, and he wants to rent at a different apartment complex. He wants to be sure his own history as a tenant is accurate. What legislation can he use to protect himself in that regard? (3.04)

The Fair Credit Reporting Act

Which federal legislation gives consumers the right to dispute incomplete or inaccurate information in their payment history? (3.04)

The Fair Credit Reporting Act

Which statement explains a progressive tax system? (1.03)

The higher the income, the higher the tax rate.

Which of these factors is likely to have the greatest influence on purchases by consumers to choose a different option than originally intended? (2.01)

The price of alternatives or substitutes

Dana spends several hours researching prices and online reviews of t-shirts for a school club. Which of the following is a cost of her research? (2.01)

The time spent on the task

Why might a person choose to attend a four-year university over a technical school? (1.01)

There are more options and greater earning potential.

Which is an accurate statement of the unemployment rates and weekly earnings in 2018? includes graph (1.01)

Those with bachelor's degrees experienced unemployment rates below the median.

Why might a person donate money to an organization focused on curing a deadly disease? (2.01)

To be part of a solution

Bernadette wants to set aside some money, but she wants to have easy access to it without penalty. She is not worried about earning a large amount of interest. Which of the following investments best suits her needs? (2.02)

Traditional savings account

What is the best source of information to use when purchasing a new car? (2.01)

Unpaid reviews on reputable car sites

Which type of credit card carries the most risk? (3.01)

Unsecured with variable interest rate

Which of these factors related to wages is in the worker's control? (1.02)

Worker productivity

When a tax is subtracted from a paycheck, it is (1.02)

a deduction

When planning for the future, you should keep in mind that (1.01)

as your level of education increases, your income potentially also increases

It is most important to account for factors like warranties and durability when purchasing a (2.02)

durable good

The amount of income a person receives before any taxes or deductions is (1.02)

gross income

Rachel finds a new apartment that she loves in the center of downtown but ultimately decides against renting it because the $1,500 per month price tag greatly exceeds her budget. Rachel's decision to forgo the new apartment is mainly based on (2.01)

her limited income

In circumstances in which there is a recession, employees may have to (1.02)

increase production to reduce employer costs

In circumstances in which technology changes, employees may have to (1.02)

learn new skills or face unemployment

One benefit of attending a technical school program is (1.01)

lower costs to attend

A store advertises new TVs for $100 a month for six months instead of $600 in order to (2.01)

make a larger price tag look more manageable

The actual amount of income received after taxes and deductions is (1.02)

net income

It is less important to account for factors like warranties and durability when purchasing a (2.01)

nondurable good

Compared to a four-year degree, a technical certification allows you to (1.02)

start earning sooner

In making a decision to go back to school to complete a degree, an employee should consider first (1.01)

the costs and benefits of obtaining the degree

Typically, Joseph buys a single tire at a time for his truck. However, he sees an advertisement for a "buy 3, get 1 free" offer from a local tire shop and decides to take advantage of the deal. Joseph's decision is mostly based on (2.01)

the sale price of the tires

Your expenses exceed your income. You should cut back your (1.04)

variable costs

Oscar has deposited $4,000 in a savings account at 1.5% interest. What is his real interest rate if the current inflation rate is 2.5%? (2.04)

−1%