AnswersJPS-202526-Arvada West-CO-Economics and Financial Literacy semester-CR-CATSParriottUnit Test

Unit Test — Unit test Answers

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1
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What is most likely the reason variable expenses should be planned after fixed expenses?

A
Fixed expenses are deducted from gross income, and variable expenses come from net income.
B
Variable expenses are a necessary part of fixed expenses but can only be calculated after fixed expenses.
C
Variable expenses are almost always higher than fixed expenses and need a greater budget.
D
Fixed expenses are required and constant, but variable expenses are more flexible.
2
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Which is an example of an income deduction?

A
an unexpected salary cut
B
wages lost due to illness
C
vacation budget
D
retirement savings
3

variablefixeduncertain

A
variable
B
fixed
C
uncertain
4

In order to stay on track for long term financial goals, money for emergency spending should be taken first from your

A
savings account.
B
discretionary money.
C
fixed expense money.
D
net income.
5

In personal finance, one makes decisions based on needs vs. wants. What is considered a need?

A
something one would like to have
B
something ones does not budget for
C
something one can afford
D
something one cannot live without
6

From what part of income should someone take savings?

A
what otherwise would be fixed expenses
B
gross income, before other deductions
C
what otherwise would be discretionary income
D
gross income, along with other deductions
7

How is a student loan different from a scholarship?

A
A student loan must be paid back, but a scholarship is not paid back.
B
A scholarship must be paid back, but a student loan is not paid back.
C
A student loan is a form of financial aid, but a scholarship is not.
D
A scholarship is a form of financial aid, but a student loan is not.
8

_____ are items such as utilities, rent, and food—items that one can’t do without.

A
Needs
B
Wants
C
Risks
D
Assets
9

This graph compares the cost of an education at different institutions in Texas.

Question illustration
A
private universities can cost three times as much to attend as public universities.
B
public universities can cost three times as much to attend as private universities.
C
community colleges can cost five times as much to attend as technical schools.
D
technical schools can cost five times as much to attend as community colleges.
10

Which would be most helpful when considering a large expenditure that might require repeating payments? Select three options.careful consideration of short-term goalsrecording the number of assets you currently owncreating a budget to consider future income and spendinglearning more about different kinds of accounts to manage moneylearning about opportunity cost

A
careful consideration of short-term goals
B
recording the number of assets you currently own
C
creating a budget to consider future income and spending
D
learning more about different kinds of accounts to manage money
E
learning about opportunity cost
11

This graph shows student loan debt in the United States from 1994 to 2009.

Question illustration
A
Student loan debt will most likely decrease in the coming years.
B
Students have taken out higher and higher loans since 1994.
C
Enrollment for higher education will soon begin to decrease.
D
Tuition for higher education has risen steadily since 1994.
12

Kerry knows that a new car is in her future.Which would be the best strategy to help her accomplish this goal?

A
contribute to a savings account
B
give up paying for health insurance
C
stop paying the full amount of rent
D
apply for and open a new credit card
13

What is one benefit of privately issued student loans?

A
They are issued in cooperation with the student’s university to reduce costs and paperwork.
B
They have lower interest rates and can be paid back with lower out-of-pocket costs.
C
They are backed by the US government to ensure greater financial security.
D
They are available to any student who meets lending standards, regardless of financial need.
14

Which of these is the best example of an asset?

A
the electricity in a home
B
the antique diamond necklace someone is wearing
C
the coffee someone drank this morning
D
an old, used airline ticket
15

This graph compares consumer expenditures in three American cities from 2007 to 2010.

Question illustration
A
workers in Houston are more likely to have jobs with high growth rates.
B
workers in New York may face a cost of living that will exceed their salaries.
C
jobs in San Francisco may have higher salaries to offset the cost of living.
D
jobs in Cleveland tend to pay based on an hourly wage instead of a salary.
16

In American society, which of these is an example of a want?

A
food
B
shoes
C
video games
D
utility bills
17

actualpotentiallikely

A
actual
B
potential
C
likely
18

Why might variable expenses change a great deal at different times of year?

A
Heating and cooling costs might vary considerably.
B
Income taxes and withholdings may increase or decrease.
C
Car loan payments become higher in certain seasons.
D
Discretionary spending may rise when fixed expenses rise.
19

Planning to finance higher education helps people prepare for their financial future because it teaches them about

A
loans and interest.
B
savings accounts.
C
filing taxes.
D
short-term goals.
20

Mindy wants to save money to buy a new couch.Which would be the best strategy for her to accomplish her goal?

A
adopt a dog from a shelter
B
stop paying her credit card bill
C
decrease the budget for basic food needs
D
forgo watching movies online or in the theater

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