PFL Final

What is income?

• The next best option when making a choice

• When unlimited wants exceed limited resources

• The taxes that are paid to the federal government

• Money earned in exchange for a good or service

One of the strongest correlations in all social sciences is the direct correlation between income level and _______.

• Number of hours worked

• Education level

• Amount of money invested in stocks

• Amount of money in your bank account

What is the difference in gross pay and net pay?

• Gross pay is the amount of income before taxes. Net pay is the amount of income after taxes.

• Gross pay is the amount of income after taxes. Net pay is the amount of income before taxes.

• Gross pay is the amount of income per day. Net pay is the amount of income per week.

• Gross pay is the amount of income per month. Net pay is the amount of income per year.

What are dividends?

• Income that is paid per hour of work

• Income that is gained when you sell something for more than you paid for it

• Income earned when companies share profits with stockholders

• Income earned by completing a job

What is a fixed expense?

• An expense that changes frequently

• An expense that remains the same over an extended period

• An expense that covers an expected event

• An expense that covers an unexpected event

Why do banks charge overdraft fees?

• They want to discourage customers from using more money than they have

• Overdraft fees cause technical problems for banks so they must account for this

• All the Above

• None of the above

What 3 components are needed in every personal budget?

• Income, expenses, savings

• Income, expenses, spending

• Income, investing, saving

• Expenses, investing, saving

What is the difference between a debit card and a credit card?

• Debit cards are connected to checking accounts. Credit cards are not.

• Credit cards are connected to checking accounts. Debit cards are not.

• Debit cards only work online. Credit cards work anywhere.

• Credit cards only work online. Debit cards work anywhere.

What is one of the biggest benefits to carrying a card instead of cash?

• People can’t accuse you of committing a crime

• If you report your card as lost or stolen, someone else cannot use it

• You can steal someone else’s identity

• The IRS won’t make you pay taxes for that year

Why do some people use online services such as PayPal or Venmo?

• It is convenient

• It is safe, especially when dealing with unknown sellers

• They need to transfer money to someone else

• All the above