AnswersEconomicsPersonal Financial Literacy

Practice Test Answers

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1
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Based on the receipt, what is the sales tax rate in Sacramento, California?

A
8 point 5 percent
B
10 point 8 5 percent
C
10 percent
D
6 point 2 5 percent
2
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Which detail is most likely to give consumers a false sense of security about using Edgozene?

A
our proven supplement
B
no other diet pill offers
C
two bottles for 29 point 9 5 dollars
D
for a limited time
3

A student who is interested in becoming an air traffic controller will make

A
more money than an athletic trainer and will have an easier time finding a job.
B
less money than an athletic trainer and will have a harder time finding a job.
C
less money than an athletic trainer but will have an easier time finding a job.
D
more money than an athletic trainer but will have a harder time finding a job.
4

A credit score tells a lender how

A
trustworthy someone is as a lender.
B
trustworthy someone is as a borrower.
C
much money someone will earn in the future.
D
quickly someone will repay a loan.
5

Bankruptcy is considered a last resort because it stays on someone’s record for

A
four to seven years.
B
eleven to fourteen years.
C
seven to ten years.
D
one to four years.
6

Which describes a type of tax that people pay on money they earn?

A
progressive tax
B
purchase tax
C
income tax
D
flat tax
7

Credit unions differ from retail banks because they are

A
owned by shareholders who purchased stock.
B
owned and managed by private corporations.
C
owned by their employees.
D
owned by their members.
8

One advantage to buying a CD is that it

A
can be purchased for different amounts.
B
is high risk but backed by the government.
C
can be used for long-term retirement.
D
is high risk but comes with great rewards.
9

Why were savings and loans (S&Ls) originally established?

A
to help people invest in the stock market
B
to help people save money
C
to help people buy homes
D
to help people invest in small businesses
10

What is the job outlook for a US postal worker?

A
The career is shrinking and will provide more opportunities over time.
B
The career is growing and will provide more opportunities over time.
C
The career is growing and will provide fewer opportunities over time.
D
The career is shrinking and will provide fewer opportunities over time.
11

Which describes the difference between a personal loan and a credit card?

A
Credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow.
B
Personal loans are secured for small purchases, while credit cards are unsecured loans for large amounts.
C
Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow.
D
Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases.
12

What does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?

A
It shows that the owner is willing to share ownership of the business to reduce financial risk.
B
It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.
C
It shows that the owner expects financial risk and is eliminating it by making an insurance company liable.
D
It shows that the owner is willing to budget for short-term financial risks to avoid long-term risks.
13

Which services would a charitable organization provide? Choose three correct answers.

A
operating a city aquarium
B
opening an animal shelter
C
owning a pet store franchise
D
preserving waterways
E
inventing a new pet feeder
14

What is most likely Yuri’s motivation behind buying the pricier pair?

A
greedy spending
B
conspicuous consumption
C
confused sense of needs and wants
D
emotional spending

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