Family Finance Unit 1

During expansion, which of the following is high? production
Which of the following business cycle phases is a recurring period of decline in total output, income, employment, and trade? recession
Which of the following reports how much economic activity has occurred within the U.S. borders? gross domestic product
The U.S. Bureau of Labor Statistics measures inflation using the consumer price index
Which of the following suggests the future direction of the U.S. economy? index of leading economic indicators
What happens to purchasing power when inflation rises? it declines
Kurt spent $80 on a new sweater rather than using this money to buy his personal finance textbook. The cost of doing without the textbook is called the _____ cost. opportunity
Susan spent $100 on a new edition of the personal finance textbook rather than $75 for a used copy. The additional cost for the new copy is called the ________ cost. marginal
Which of the following is true about tax-sheltered income? It is considered the second best type of income. It is exempt from income taxes in the current year but will be subject to taxation in a later tax year. It is also called tax-deferred income.
Which of the following is true about compounding of interest? It is earning interest on interest. It depends on the frequency with which interest is compounded. It depends on the periodic interest rate that is applied.
Which of the following benefit programs lets an employee choose which benefit(s) he or she would prefer from a list of available options?  cafeteria plans
Which of the following is true about Health Savings Accounts? They are for people with high-deductible health care plans. Contributions to the savings account are tax-deductible.. Withdrawals from the savings account are made to pay for medical expenses.
Which of the following is true about flexible spending accounts? The funds may be used to pay for dependent care for dependents younger than age 13. The funds may be used to pay for eyeglasses, contacts, and copayments. The funds are forfeited if not used within the time limit, unless the policy allows a carryover or grace period.
Which of the following is a broad, sustained decline in prices of goods and services? deflation
Using table A.1 in the appendix, calculate how much Rhonda will have in 6 years if she saves $4,500 at 5% interest. 4500×1.3401=6030.45
Using table A.3 in the appendix, calculate how much Kyle will have in 10 years if he saves $1,575 each year at 4% interest. 1575×12.0061=18,909.61
All of the following are examples of employee benefits tuition reimbursement, child care, paid sick leave
Which of the following is the most unwise option for taking care of money in an employer-sponsored retirement plan when changing jobs? cash it out
After hiring an employee, the law requires employers to do all of the following pay Social Security taxes to the federal government, provide unemployment insurance, provide workers’ compensation benefits if the employee is injured on the job
Which of the following is true about cover letters? They are designed to express your interest in obtaining an interview. They should sell you to the prospective employer. They should expand on a couple of details from your resume.
A balance sheet includes _______, _______, and _______. assets; liabilities; net worth
Assets on the balance sheet are valued at their fair market value
Which of the following types of assets is primarily used for emergencies, maintenance of living expenses, savings, and payment of bills? monetary
An income and expense statement is also known as a(n) _______ statement. cash-flow
In which of the following areas does a person usually have the most control? variable expenses
Which of the following shows the number of months a person could continue to meet expenses using only his or her monetary assets if all income ceased?  basic liquidity ratio
Which of the following shows a view of a person’s total debt burden? debt service-to-income ratio
Which of the following is the amount of income remaining after taxes and withholdings? disposable income
Discretionary income is used to pay for things like vacations
Which of the following is one of the purposes of a revolving savings account? to cover large nonmonthly expenses
Which of the following documents should not be kept in a person’s active file? birth certificates
Which of the following budgeting methods works especially well with small, variable expenses? the envelope method
Which of the following is the purpose of the Step-Down Principle? to reduce expenses
How often should a financial checkup be completed? annually
The Debt-to-Asset Ratio measures which of the following? solvency
The Financial Checkup booklet as the four important savings revolving, emergency fund, future purchases, retirement

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