Personal Finance 1.01 Question Preview (ID: 6945)


Earning, Saving, Spending, And Borrowing. TEACHERS: click here for quick copy question ID numbers.

Sharon paid for an unexpected trip to the emergency room instead of paying her car payment. This illustrates:
a) a high standard of living
b) an opportunity cost
c) the cost of credit
d) workplace trends and opportunities

Susan is going to obtain a loan to buy a stereo system. This is an example of which economic activity?
a) borrowing
b) earning
c) saving
d) spending

Tom borrowed $100 from a friend to buy items he needed for work with a retail value of $300. When he gets his paycheck, he will have enough money to pay his debt. This illustrates:
a) enabling people to earn more and raise their standard of living
b) encouraging people to spend less and save more.
c) use of borrowing to place oneself in great debt
d) wise use of credit to extend a person's buying power

Which is an example of earning?
a) Ed asked his mother for a loan
b) Evan bought a coat with a debit card
c) Mary loaned her credit card to a friend
d) Sam sold things he made at a flea market

Which is an example of responsible borrowing?
a) Barry asked his mother for an advance on his allowance so he could buy another CD.
b) Ed accepted a loan from his uncle because he knew he could pay it back.
c) Fran borrowed her mother's credit card without permission to use at a big sale.
d) Greg spent all of his paycheck before he remembered he had a debt to repay.

Which is an example of responsible earning?
a) Dorothy kept her part-time job until she could find another so she could meet her monthly expenses
b) Josh did not use his car,he did not know if his friend's insurance would cover him
c) Kate compared costs of school supplies in several stores before deciding where to shop
d) Larry set aside $30 from his part-time job earnings each month to help pay his senior expenses

Nancy works in a restaurant where she receives tips. Receiving tips is an example of which economic activity?
a) borrowing
b) saving
c) spending
d) earning

Which is an example of saving?
a) Ben took out a loan to buy a car.
b) Kay wrote a check for a CD at a store.
c) Mary put money in a bank account.
d) Sara used her debit card to make a purchase

Rick cannot afford to buy Christmas gifts for everyone in his family. This illustrates
a) a benefit of saving
b) an opportunity cost
c) a trade-off
d) the Law of Scarcity

Jim decided to save his money for his senior expenses rather than spending it at the mall. This illustrates
a) considering lifetime earnings when making career choices
b) making wise choices in light of trade-offs
c) worrying about today instead of planning ahead
d) using one's knowledge to increase earnings

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