Financial Literacy Unit Assessment Review Question Preview (ID: 53688)


Financial Literacy Review. TEACHERS: click here for quick copy question ID numbers.

Why is it important to have an emergency fund?
a) The fund is used to pay for your health and car insurance, where emergencies are common.
b) The fund is used to pay for college so you don't have to take out student loans.
c) The fund is used to pay for unexpected expenses, so that you don't have to go into debt if there's an emergency.
d) The fund is used to make donations to charities, who need your help to do good work.

You want to reduce the amount of loans you'll need to take out for college, so you want to save as much money as you can ahead of time. What's the BEST strategy?
a) Every time you receive a paycheck, spend carefully and then save any money you have left over at the end of the month.
b) When you receive any income, either through gifts, allowance, or working, set a goal of saving at least half before you spend
c) Spend whatever you want during the first 2 years of high school, but then save everything you earn during the last 2 years of
d) Don't do anything fun during high school so you're not tempted to spend money.

Jodi wants to visit her extended family in Barbados next summer, and the flight costs $450. How much does she need to save each month if she wants to buy the flight in exactly 9 months?
a) $9
b) $45
c) $50
d) $90

A credit score is...
a) Assigned to everyone when they first open a bank account
b) Used to tell future lenders how responsible you are with debt
c) A record that goes onto your high school transcript
d) The way you know if you are making a good investment

If you have a $1000 balance on your credit card statement, which sentence below is TRUE?
a) You have already paid that $1000, and you don't owe any additional money.
b) You need to make at least the minimum payment each month until the entire debt is paid off.
c) Your credit card company will take the entire $1000 from your savings account to pay that bill.
d) You will not need to repay that money until after you graduate from college.

Yao is trying to open a credit card. He finds a Visa with an interest rate of 14.99%. His other option is a Mastercard with an interest rate of 22.99%. Based only on interest rate, which card should he choose?
a) The Visa, because if he is charged interest for carrying a balance, it will be lower.
b) The Mastercard, because if he is charged interest for carrying a balance, it will be lower.
c) The Visa, because a low interest rate will lead to a high credit score.
d) The Mastercard, because a high interest rate will lead to a high credit score.

Which statement best describes what a budget is?
a) A list of all the money you spent during the last month
b) A plan for how much income you expect to have and how you want to save and spend it
c) A statement from your bank that shows your ATM withdrawals
d) A list for which scholarship and grants you will use to pay for college

Susan's paycheck this month says her gross pay was $400 and net pay was $350. What's the best explanation for why those two numbers are different?
a) Susan didn't work as many hours as she promised she would.
b) Susan's boss wasn't pleased with her work and reduced her pay.
c) Susan's employer deducted taxes from her paycheck.
d) Susan spent some of the money before she even got her check.

Lamar recently graduated and lives in an apartment he shares with two friends. Each of these expenses is probably a NEED in Lamar's budget EXCEPT...
a) Paying his portion of the electric bill
b) Paying $600 for his monthly rent
c) Making his cell phone payment on time so his service isn't shut off
d) Going out every Friday to celebrate Roommate Fun Night with his friends

Which action would REDUCE the amount of money in Kendra's checking account today?
a) Using an ATM to withdraw money using her debit card
b) Using a gift card she received for her birthday at her favorite store
c) Using her smartphone to deposit a check from her employer
d) Using an ATM to deposit a check from her employer

What is compound interest?
a) Compound interest is earning interest on the original amount you deposited.
b) Compound interest is earning interest on the original amount you deposited plus any interest earned.
c) Compound interest is the amount of interest you are charged on your bank account balance each month.
d) Compound interest is earning a specific dollar amount on your bank account balance each month.

What are the two main categories of a budget?
a) Taxes and Debt
b) Income and Expenses
c) Investments and Insurance
d) Spending and Saving

Marbella just got her first job working part-time at a department store on weekends. Before receiving her first check, her aunt says, Be sure to pay yourself first! What does that mean?
a) Marbella should pick up her check first thing in the morning, right when banks open.
b) Marbella should make sure she buys everything she needs, personally, before shopping for others.
c) Marbella should save part of her paycheck first, before she buys anything with the money.
d) Marbella should ask her boss for a raise, so that her paycheck is higher.

Kellen is saving for a new video game system, which costs $300. He receives an allowance of $30 per month, and he usually spends $15 and saves $15 each time. How many months will it be until Kellen has enough saved to buy the game system?
a) 10 months
b) 12 months
c) 20 months
d) 30 months

Which of these is a key benefit of having a high credit score?
a) You will have an easier time getting into a good college.
b) You will have more money in your checking and savings accounts.
c) You will qualify for better rates on loans or credit cards.
d) You will earn more money from your employer.

Ronny uses his credit card to buy new bluetooth headphones at Audio Stop in a shopping plaza near his house. Where will the money come from for this purchase?
a) The money will come straight from Ronny's checking account and go to Audio Stop's account.
b) The money will come out of Ronny's savings account at the end of the month and be sent to Audio Stop.
c) Ronny will take the money out of an ATM and repay Audio Stop before they close for the day.
d) Ronny's credit card company will pay Audio Stop, and then Ronny will repay the credit card company later.

If you are trying to get a loan to pay for a used car, what type of interest rate should you be looking for?
a) You want a low interest rate so the total you pay is less.
b) You want a high interest rate so the total you pay is less.
c) You want compound interest, so that the value of the car grows quickly.
d) You want a high interest rate so you can afford a fancier car.

If you have a part-time job as a high school student, what would be the MOST common deduction from your paycheck?
a) Retirement savings
b) Insurance premiums
c) Taxes
d) You would be too young for deductions

Lana wants to create a better plan for her money so she knows exactly how much income she is making and how much is being spent on monthly expenses. What tool would you encourage her to use to achieve this goal?
a) A credit card
b) A checking account
c) A budget
d) An insurance policy

Who pays taxes?
a) Everyone over the age of 18
b) Any individual or company that earns income
c) Only people over the age of 18 that make at least $50,000 a year
d) Only people over the age of 21, regardless of earned income

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