Stukent - Unit 2

Hunter is a shrewd businessman. He has a knack for being able to recognize a good deal when he sees one. So when his friend was desperately trying to sell his Xbox 360 in an effort to raise money so he could pay for a speeding ticket, Hunter was very interested. As it turns out his friend, Leo was only asking $75 for the console and two controllers. Although slightly used, everything works and is in good condition. If Hunter makes the deal, according to the nature of exchange, what are they agreeing the value of the items are?

• They are worth $75 because that’s what Hunter paid to get them.

• They are worth more like $200 used and Hunter got a great deal.

• They can’t say how much the items are worth, because it is all relative. They are worth more than $75 for hunter, but at the time they were worth less than that for Leo.

• They don’t know for certain how much everything is worth because you can’t really know with used items without comparing them to new ones.

• It doesn’t matter what they value them at, the market decides how much the items are worth based on supply and demand.

What is the name of the measuring tool developed by the United Nations to quantify a country’s standard of living?

• Human Development Index

• Human Living Standard Profile

• Standard of Living Qualifier

• Developing Standard Index

• Standard of Development Rubric

True or False: according to the New York Times a typical person in the bottom 10% of the American income distribution is still richer than 68% of the world’s inhabitants.

• True

• False

True or False: The poverty wage in America is $5.00 an hour.

• True

• False

Budgeting is not just about monitoring your spending. More than anything else, effective budgeting involves ______. Which of the following is the BEST statement to fill in the blank?

• Building savings

• Managing credit

• Breaking old habits

• Behavior modification

• Holding banks accountable

Which of the following is the best description for the term discretionary spending?

• Discretionary spending is the same thing as net income.

• Discretionary spending refers to the money you are obligated to pay such as bills.

• Discretionary spending refers to the money you have after your taxes are removed and any mandatory obligations have been covered.

• Discretionary spending refers to the money you spend at your own discretion specifically on food or entertainment.

• Discretionary spending refers to any money that was originally obligated for a purpose but is now free to spend any way you want.

When making a budget, how should you treat your monthly bills that you are obligated to pay?

• Each individual bill should have its own category when creating a budget.

• It is best to combine all of the bills into one category for your budget.

• Bills should not be included in your budget. Your budget should be built to manage your money spent after your bills are paid and not before.

• All of the above

• Only A & B

One of the biggest risks of failing to budget for non-monthly expenses is that it can lead to debt cycles.

• True

• False

Treating your bills like they are optional is one of the fastest and most common ways to build a good credit score.

• True

• False

When using the envelope budget, what is the purpose of documenting any excess cash left unspent at the end of the month?

• By documenting where it came from you will know which categories can be adjusted.

• You only need to document money you intend to put aside for non-monthly expenses.

• Documenting excess funds builds good record keeping habits which helps with taxes.

• When you document your spending it reminds you have where you need to change.

• If you know you have to keep track of this, it will motivate you to save more.