AP ECON- Wise test
what is true about investing?
Investing is riskier than putting money in a savings accounts.
How can you avoid spending more than what is in your bank account?
Keep your own records to compare with your financial institution's records.
Recommended methods to protect yourself from identity theft and fraud include __________.
Placing a credit freeze with the credit bureaus.
In addition to needs, what should you plan for first when creating a budget?
Recurring expenses
Which of the following is NOT an advantage of owning a car?
Smaller down and monthly payments than leasing a car
What should be considered when setting a budget?
Needs, wants, and savings
Which of the following statements is true about taxes?
Taxes pay for schools and government departments. Taxes pay for roads and emergency services. Taxes are often used at the federal, state, and local levels.
Which method of payment actually is a form of borrowing money that needs to be paid back later?
credit card
Which payment option could have interest charged to you?
credit card
What is NOT a benefit of using a budget?
A budget can help you purchase anything you want
what financial institutions typically have the highest fees?
Check cashing and payday loan companies
Annual Percentage Rate (APR), credit limit, and penalties and fees are important to consider when __________.
Choosing a credit card
How would you reconcile your bank account to avoid spending more than you have?
Compare your own records of your spending with your financial institution's records.
What will collision insurance cover in the event of an accident?
Damage to your car
What are three common features of a financial institution?
Direct deposit Debit cards Checking and savings accounts
When setting a budget, you can choose to make room for:
Financial goals Entertainment expenses Charitable donations
What budgeting tip(s) would help you to stay on track financially?
Find a friend with similar goals and hold each other accountable
What do you need in order to fill out your 1040?
Your W-2
Going directly to a car dealer for a loan to keep things simple is a..
not great because they typically offer higher interest rates.
Benefits to paying the full balance of your credit card each month include:
not having late fees
Paying only the minimum balance on your credit card can lead to...
paying more interest
Which of the following is TRUE regarding unexpected expenses?
they should be planned for
When you start a new job, you fill out a W-4 form to _________.
to determine how much federal income tax your employer should withhold from your paychecks.
Not managing your debt wisely can result in __________.
A decrease in your credit score
Which of the following is NOT a recommended method to protect you from identity theft?
Expensive specialty locking or monitoring service.
The gig economy offers _________.
Flexible, short-term, and independent jobs
Which of the following is NOT considered part of your benefits package available from your employer?
Free technology equipment
What are three benefits of using a budget?
Helps to keep track of the money you receive Helps to prioritize your spending Helps reach short- and long-term financial goals
Why is using a budget beneficial?
Helps to keep track of the money you receive Helps to prioritize your spending Helps reach short- and long-term financial goals
Which choice or choices best describes the purpose of an emergency fund?
An emergency fund prepares you for unexpected expenses. An emergency fund keeps you from borrowing money from friends and family. An emergency fund removes the worry about expenses not in the budget.
For most careers, which degree will most likely result in the highest lifetime earnings?
Bachelor degree
All of the following may be a part of your benefits package available from your employer, except
FICA
Which of the following should NOT be considered when setting a current budget?
Future income
What does the W-2 form tell you?
How much you've earned and how much taxes you've paid in the last year.
What savings account will earn you the least money?
One that earns simple interest monthly.
Which is a positive reason for using a credit card to finance purchases?
Paying it off on time can help build your credit history
How is a post from a social media influencer different than a comment from a regular consumer?
The influencer is paid to post the product.
Which of these items is NOT important to consider when selecting a credit card?
The look of the credit card
How does the government pay for roads, schools, and emergency services?
They are funded through taxes.
What is NOT true about unexpected expenses?
They do not occur if you have a budget
What is NOT a benefit of having a good credit score?
You'll get accepted to better education institutions.
What do you NOT need in order to fill out your 1040?
Your employer benefits documentation
Healthcare, paid time off, disability insurance, and matching contributions to a retirement account are all types of _________ available from your employer.
benefits
Credit cards can help __________ when paid off on time regularly.
build a credit history
Which payment option is not accepted online?
cash
what is true about check cashing companies?
charge high fees
Which payment option takes money out of your bank immediately?
debit card
This helps you prepare for unexpected expenses
emergency fund
Having a great credit score will make it easier for you to get into a better educational institution.
false
T or F- How much you're being paid is the only thing you need to consider when considering a job offer.
false
The W-2 form is a form that tells you _____.
how much taxes you've paid in the last year based on how much you've earned.
Which of the following is NOT a good way to track your spending?
in your head
What does liability insurance not cover in the event of an accident?
injury to self
What should you do before you use an ATM?
inspect the ATM and its surroundings to make sure it is safe to use.
Collision insurance is...
insurance that will pay to get your car fixed in the event of an accident.
he cost of a secured loan is typically lower than the cost of an unsecured loan because _________.
it requires collateral.
Which of the following is NOT a possible tax or deduction that could show up on your paycheck?
sales tax
The W-4 tax form is used to
tell your employer how much federal income tax to withhold from your paychecks to send to the IRS.
An insurance premium is...
the amount of money you pay for an insurance policy.
A pack of 24 pencils is more expensive than 12 pencils, but why could buying the 24 pack be the better deal?
The price of each pencil, or the unit price, is actually cheaper in the 24 pack.
What is the gig economy?
A flexible market that allows you to work short-term, independent jobs.
_________ are good places to look to find your current expenses when building your budget.
Bank and credit statements
In your budgeting process, when should you look at recurring expenses?
Before reviewing your wants
What are possible red flags or signs of a scam when buying a car?
Being told your financing fell through Charging of excessive fees
Which item is important to consider when selecting a credit card?
Both APR and fees
What is NOT a good way to prevent unnecessary spending?
Buy all of your wants at one time.
Which example shows an advantages of owning a car over leasing one?
No restrictions on the number of miles to drive and the ability to customize, or make changes to the car.
what is an example owning a car over leasing one?
No restrictions on the number of miles to drive and the ability to customize, or make changes to the car.
What savings account will earn you the most money?
One that compounds interest daily.
Which of the following is NOT a useful strategy when making an informed purchase?
Purchase a product based on a social media influencer
Which of the following will help you protect yourself from identity theft and fraud?
Regularly monitor your credit report. Contact lenders and credit bureaus to address incorrect information. Freeze your credit.
Which of the following expenses would be a good reason to spend money from an emergency fund?
Repair your laptop that you use for homework
How can you ensure you don't go over your budget?
Round up your expense estimates to add a buffer
Chacteristics of savings accounts
Savings accounts limit the number of withdrawals that can be made each month. Savings accounts may require you to maintain a minimum balance to avoid paying a fee. Savings accounts are best used to store money for longer-term goals.
what three statements about savings accounts are correct?
Savings accounts pay interest on the money you deposit. Savings accounts may require you to maintain a minimum balance to avoid paying a fee. Savings accounts are best used to store money for longer-term goals.
What do taxes pay for?
Schools, government departments, roads, and emergency services
What is a way to track your spending?
Spreadsheet budget Envelope method An app
Which of the following is NOT true about emergency funds?
They are used for anything listed on the budget.
Secured loans are less costly than unsecured loans because
They usually have a lower interest rate. They require collateral. They are less risky for the financial institution.
Why is it important to reconcile your bank statements?
To avoid spending more than what is in your account. To detect any errors in your account. To determine if you were charged any fees.
A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily. True or False
True
When are loans a good option to use?
When paying for higher education
What is a benefit of having a good credit score?
When you need a loan, you'll have more loan offers to pick from
What option will NOT be available if you are behind on loan payments?
You can ask to get out of your loan
Which is NOT a positive reason for using a credit card to finance purchases?
You will get charged high interest.
What do you need in order to fill out your 1040?
Your W-2 Your routing and bank account number A record of any other supplemental income
All of the following are benefits to paying the full balance on your credit card each month EXCEPT
Your credit score can decrease.
What will happen to your credit score if you do not manage your debt wisely?
Your credit score will go down
Which of the following should you consider when setting a budget?
Your financial goals Needs and wants Savings
Using a loan could help with the purchase of what?
a house
A stock is ________.
a piece of a company
When you are deciding what to buy, you should not...
assume that buying the cheapest item is the smartest choice.
Where should you look to find your current expenses when building your budget?
bank and credit statements
Unexpected expenses...
can make it hard to stick to your budget. may cause you to be unable to pay necessary bills. should be planned for.
Savings accounts typically offer more interest than what type of account?
checking account
Which type of bank account is best for everyday transactions?
checking account
what type of bank account typically offers the least (if any) interest?
checking account
Which forms of payment is linked to a bank account which limits the amount of money you can spend to balance in your account?
checks and debit cards
When looking for pre-approval on a car loan you should..
compare pre-approval offers and select the one that is best for you.
When you are deciding what to buy, you should...
compare unit prices
Which payment option can offer additional security like fraud protection?
credit card
When filing an insurance claim, the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.
deductible
An unanticipated expense that will make it difficult to get by day-to-day would be a candidate for...
emergency fund spending
T or F- When considering a job offer, you should only consider how much you're being paid before you accept the offer.
false
three possible tax or deduction that they may show up on your paycheck?
federal income tax retirement savings FICA
When setting a budget, you should consider...
financial goals, current expenses, and income.
he amount of money you're paid, after all taxes and deductions are taken out of your paycheck is called_
net pay
Charitable donations, entertainment expenses, and financial goals are all examples of...
things to consider when creating a budget.
T or F- Generally, the more education you receive, the higher your lifetime earnings will be.
true
T or F-When considering a job offer, you should consider how much you're being paid and any other employee benefits before you accept the offer.
true
he price of a single item within a group of items is known as the ______________ of the item
unit price
What could be a good option available to you if you are behind on loan payments?
A financial institution may offer for you to pay a little now and pay the rest after your next pay day.
Which of the following is NOT a feature that makes a secured loan less costly than an unsecured loan?
A high interest rate
How does a consumer know whether a purchase may be a good deal?
A large percentage of positive customer ratings offer detailed explanations. The item has the most features compared to other similar items.
Which of the following is NOT be a warning sign of a scam when buying a car or other big purchases?
A price that fits comfortably in your budget
A mutual fund is _________.
A type of investment that invests in a mix of different types of investments.
What are three common features of a financial institution?
Access to ATMS, paper checks, direct deposit
What is the purpose of the W-4 form?
To inform your employer of how much federal income tax to withhold from your paychecks.
Insurance that covers damage to your car from an accident is called...
collision insurance.
Bank statements, credit statements, and records of cash expenses help you to estimate your __________.
expenses
o maintain a good credit score you must __________.
manage your debt wisely.
T or F- There is no relationship between the level of education received and lifetime earnings.
false
When looking for pre-approval on a car loan you should NOT...
get a loan from the car dealer directly to keep things simple.
The ________ is a flexible market that allows you to work short-term, independent jobs.
gig economy
if you get into a car accident, your _______________ may increase because you will be considered riskier for insurance companies to cover.
insurance premium
Liability insurance is...
insurance that will pay for injury to another driver and/or damage to their car if you are in an accident.
n emergency fund should NOT be used for...
last minute trip
Insurance that will pay for injury to another driver and/or damage to their car if you are in an accident is called...
liability insurance.
Investing is best for ________.
long-term financial goals, like paying for retirement.
What is one of the best ways to get reliable information about a product?
online reviews
Which of the following is NOT a possible tax or deduction that could come out of your paycheck?
overtime pay
Net pay is NOT
your gross pay + bonuses
What is net pay?
Pay after deductions
Your employer sends you a _______ form that tells you how much you've made and how much you've paid in taxes in the last year.
W-2
Leasing a car may be a better option than buying a car if..
you don't plan on having it for long and don't want to worry about regular maintenance.
Why is figuring out the unit price of something useful when shopping?
It helps you determine the best deal.
Which fact supports the idea that renting is a good option for living in a place for a short period of time?
Landlords take care of most maintenance.
When making a large purchase, you should avoid everything EXCEPT
a price that fits comfortably in your budget.
Making a good purchasing decision requires __________.
comparing the prices of similar items reading reviews of the product waiting until the product is on sale, if possible
he envelope method, notebook and pencil, and online software are all methods of
tracking your spending
