Economic's and Personal Finance Final Exam questions

If your monthly income from your job is $600, and you want to save 25%, how much would you save each month?

$150

If you negotiate a new car deal for $22,995, including all taxes and registration, and you put 20 percent down, how much will you still need to finance?

$18,396

How much would you need to pay up front for a car that sells for $13,000, with 7 percent sales tax, a $2,600 down payment, a $78 license and registration fee, and a first month's car insurance premium of $99?

$3,687

A value can be described as

1. beliefs and practices in your life that are important to you. 2. A belief or idea you consider important or desirable

If an investor can earn 9 percent on an investment, approximately how long will it take for the investment to double in value?

1.8 years

In general, who would most need life insurance?

A young married couple with small children.

Employee benefits typically cost an employer what percentage of your pay?

Between 20% and 50%

A complicated budget is more likely to motivate you to achieve your financial goals.

False

A job and a career are basically the same thing.

False

A person who is employed as a wage earner will receive an annual salary.

False

A political system with a centrally planned economy that owns all resources and means of production is called socialism.

False

A surplus exists when the quantity supplied can't meet demand.

False

Capital gain is the difference between the purchase price and the selling price of stock when it sells at a loss or the investor losses money when he sells the stock.

False

Checking the Buyers Guide will help you make sure you are not paying too much for a used car.

False

Collision coverage pays to replace the policyholder's stolen BMW.

False

Comprehensive coverage pays to replace twenty-five years' loss of income to a family whose father has been killed in an accident caused by the policyholder's car

False

If you choose an insurance policy with a large deductible, the premium is usually higher.

False

If you fill out your check clearly and completely, a sales clerk must accept your check for payment.

False

Inheritance taxes are levied against the estate of a decedent by the federal government.

False

Long term goals have a time frame of six months to a year.

False

Net worth is calculated by subtracting your variable expenses from your fixed expenses.

False

People who purchase and use goods and services are usually businesses.

False

Personal property coverage pays for repairing the bumper on the car the policyholder has rear-ended.

False

Save money for a gift is an example of a S-M-A-R-T goal.

False

The VEN is the unique identifier for a car, assigned at the factory.

False

The are five criteria to defining the financial planning process.

False

The black magnetic strip of your debit card contains you name, account number and professional identification number.

False

The chance of loss from some type of danger is conditions.

False

The commodities market is where you buy and sell stocks and bonds.

False

The deductible is the payment made to purchase an insurance policy.

False

The sticker price is the lowest price you would expect to pay for a car.

False

The three types of life insurances is whole, term and disability.

False

The total value of all goods and services produced in a country and measured monthly is the GDP?

False

There are three major credit card companies, Visa, MasterCard and Discover.

False

Using a credit card for purchases is a low-interest way to buy now and pay later.

False

Variable expenses do not change; fixed expenses change according to needs and short-term goals.

False

Karissa realized that she needed to plan how to handle her money if she wanted to be able to pay for her car expenses and have money available for fun and special events. She wrote down her goals and made a plan for how much money she will need to pay for car expenses, have fun with firends, and meet her goals. Every weekend, she checked her progress to decide how she would use her money during the next week. When she needed to cut back on work hours during the school year, she and her friends found things to do that were inexpensive or free. Karissa followed five of the six steps of financial planning process but one step. What else does shee need to do?

Figure out exactly how much money she is getting and spending

A house payment and utilities are examples of

Fixed expenses

Liability insurance protects you against

Lawsuits

In the future, a dollar will be worth

Less than a dollar will be worth

There are six general types of automobile insurance. Which of the following is one of those six?

Liability

Save $2000 from a summer job for the next two years for a down payment on a car is an example of what type of goal?

Long term

Monica adds $500 to her mutual fund every year for the next 10 years. Mason decides to wait 10 years when he knows he will have a lump sum of $5,000 to invest in a mutual fund. If both Monica and Mason earn on average a 7 percent rate of return, who will have the larger mutual fund balance in 20 years?

Monica

After you write out and sign your check for payment or purchase, who can legally endorse the check?

Only the payee

If you have been a victim of identity theft, what can you do to prevent someone from using your personal information?

Place a fraud alert on your credit report

The United States government intervenes in the economy in order to

Promote the general welfare..

system to protect people experiencing unfavorable economic conditions

Saftey Net

As you are online searching for information for a class assignment, your search is interrupted when a Web site pops up without your entering a new site address. You may be a victim of

Spyware

If you were in a car accident, which of the following is needed when you file a claim?

The address of the location where the accident occurred

The "time value of money" can best be explained using which one of the following concepts?

The dynamics of compounding

In managing risk, what does it mean to transfer it?

To shift the possibility of loss to another person

The economy that relies on habit, custom, or ritual to answer economic questions.

Traditional economy

A bond is a formal agreement where the borrower can use your money for a set period of time and you as the lender will get paid a specific amount of interest in return.

True

A claim is a request for payment to recover the financial loss from damages.

True

A major reason for financial planning and budgeting is to prevent careless spending.

True

A person who receives a commission will get a percentage of what they successfully sell for the company.

True

An estate must be worth more than a certain amount to be subject to federal estate taxes.

True

Banks and credit unions have their own versions of savings bonds called CDs.

True

Collision coverage pays up to fair market value for the policyholder's car.

True

Credit unions and banks provide the same types of financial services.

True

Dividends are share of the profits you receive as a stockholder.

True

Every choice you make comes at a cost

True

Financial planning process is the process of setting goals, developing a plan to achieve those goals and putting the plan into action.

True

Getting a good education is an example of a value.

True

If you pay your credit card balances in full befoe the due date, you will not owe any interest.

True

If you use another bank's ATM, you could be charge third-party ATM fee.

True

In the S-M-A-R-T goal criteria the M stands for measurable.

True

Inflation is a major concern to people on fixed retirement income.

True

MMDAs pay a higher rate of interest than savings accounts but usually lower than CDs.

True

On average, a person with a two year college associate's degree earns more than a person with a high school diploma.

True

Personal Injury protection coverage pays to replace income when the policyholder is inured in an auto accident and cannot work

True

Save $25 by the 10 of next month to buy mom a birthday gift is an example of a short term goal.

True

The condition of the economy affects how much things cost.

True

The purpose of insurance is to protect against financial loss.

True

The title is the document that transfers from owner to owner.

True

To prepare your personal budget, you should first list sources of money you expect to receive, known as income.

True

Lunches, medical bills, personal care items, and clothing are all examples of

Variable espenses

On average, a person with a college degree earns

almost double what is earned by someone with no training beyond high school

The United States economy is mixed economy

based on a free market, but allowing some government intervention

How can you make sure your budget is on track after you set it up?

compare your budgeted income and expenses with your actual income and expenses for two weeks.

the method used by a society to produce and distribute goods and services

economic system

The ________________ is where the supply curve and demand curve meet.

equilibrium price

Online banking is available

every day, all day

the income people receive for supplying factors of production

factor payments

The basic rule of a risk-to-return relationship is that the

higher the risk, the higher the return on investment

the process of bringing new methods, products, or ideas into use

innovation

Save $10 a week fr the next five months to buy a dress for prom is an example of which type of goal?

intermediate

If you don't meet certain qualifications, such as maintaining a monthly minimum balance or limiting the amount of checks you write your bank could charge you this fee

montly service fee

All of the following are income investments except?

mutual funds

Fixed expenses include all of the following except

new tires

An employer-sponsored retirement plan is

one of the most valuable employee benefits

Supply and demand have a direct impact on the ____________ of goods and services.

price

All of the following are examples of a collectible except

real estate

If you deposit a check into your account and the deposited check is returned for insufficient funds your bank will charge you this fee

returned check fee

If Shauna finds a budget deficit two weeks after creating her budget, which of the following is the best way for her to eliminate the deficit?

review expenses and cut back

Save $100 for a day trip to Florida during spring break? This goal is missing which elements of a S.M.A.R.T. goal?

specific and time-bound

the level of economic prosperity

standard of living

Some states mandate the availability of homeowner's insurance coverage through

the FAIR plan

The Rule of 72 is useful in calculating the

time required to double an investment

The maximum amount you can charge on a credit card is called

your credit limit