Understanding College Savings — Unit test Answers

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What type of expense is an example of the cost to drive to and from work?

a variable expense.

a fixed expense.

a short-term expense.

a discretionary expense.

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When a person invests income, he or she

spends no money in the short term and saves it all for the long term.

uses money in a way that will increase its value in the future.

spends income only on essential needs such as housing.

cuts out all discretionary spending for a set period to save money.

Amanda wants to buy a new car. What questions of financial responsibility should she ask herself before she makes the purchase? Select three options.

Do I need this car or should I walk, bike, and take the bus to save money?

Is this a reliable vehicle or will I have to make costly repairs?

What will my friends think when I buy this car?

Will I be able to afford the insurance, gas, maintenance of battery, oil, tires, and also repairs?

Will this new car be fast and my favorite color?

A federal income tax exists to provide revenue for

schools and other services.

state governments.

local governments.

the US government.

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