Budget — Test Answers

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In July, Makayla has a planned vacation expense of $⁢1,000 However, an unexpected home repair costing $⁢600 occurs in October. How might Makayla adjust the budget to handle the home repair and maintain the vacation plans?

A
postpone the vacation to the next year
B
borrow money to cover both the vacation and the home repair
C
skip the credit card payment in July and apply that amount to the home repair
D
reduce discretionary expenses in October and apply the savings to the home repair
3

Which strategy would help Amrom increase his net worth by using his monthly income effectively?

A
spend more than his income on non-essential expenses to maintain a high standard of living
B
use his income to finance a new car by taking out an additional loan
C
allocate a portion of his income to make regular contributions to his retirement account
D
spend his monthly income on purchasing more credit card reward programs
7

Which event is likely to create a challenge in Kamari's budget?

A
replacing a car tire that is worn out
B
receiving a monetary gift
C
getting a part-time job with extra income
D
saving money for an upcoming holiday
10

Which action would be a budgeting error?

A
allocating funds for debt repayment
B
tracking entertainment spending
C
forgetting to budget for an annual insurance payment
D
setting aside money for savings each month
17

What type of asset is real estate?

A
liquid asset
B
intangible asset
C
cash asset
D
tangible asset
18

Which life event is most likely to increase long-term budget expenses?

A
receiving a tax refund
B
getting a pet
C
starting a new job with a higher salary
D
taking a vacation
20

What is a high-percentage expense in a budget?

A
an expense that occurs only once a year
B
an expense that exceeds a significant portion of a person's income
C
a flexible cost that can easily be reduced
D
an expense that makes up a small portion of a person's budget

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