Personal Finance Throwback Week 4

Avery just had an unexpected car repair. What should Avery use to cover this expense?

• Money borrowed from a friend during emergencies.

• A savings account meant to cover unexpected expenses like car repairs or medical bills.

• A credit card reserved for emergencies.

• Cash you hide at home for emergencies.

What is a credit score?

• A measure of how much money you have saved.

• A number that indicates your ability to manage borrowed money and repay debts.

• The amount of credit available on your credit card.

• The interest rate on a loan.

Benjamin is trying to improve his financial health. Which of these factors affects his credit score the most?

• Payment history.

• Number of credit cards he owns.

• How much cash he keeps in a savings account.

• The amount of taxes he pays.

What does it mean to “diversify” your investments?

• Putting all your money in one type of investment.

• Spreading investments across different types to reduce risk.

• Only investing in low-risk savings accounts.

• Using all your money to pay off debt.

Mason is considering starting to save for retirement at the age of 25. What is the primary benefit of starting to save for retirement early?

• Avoiding paying taxes on retirement savings.

• Taking advantage of compound interest to grow your savings over time.

• Ensuring you never need to work again.

• Gaining access to more loans in the future.

Which of the following best describes money as a unit of account?

• A way to store wealth over time

• A tool to compare the value of goods and services

• A method to pay off debts

• A standard currency issued by the government

What is one reason money is considered highly liquid?

• It can easily be converted to other forms of payment.

• It can be stored indefinitely without losing value.

• It is always issued by the government.

• It is the most valuable asset in an economy.

How does money function as a standard of deferred payment?

• It provides a consistent unit to measure the value of goods.

• It allows for payments to be made at a future date while maintaining value.

• It ensures that everyone has access to loans.

• It requires all transactions to be made in cash.

What happens when money fails to act as a store of value?

• People lose trust in the economy.

• Goods and services become harder to compare.

• Bartering becomes the primary method of trade.

• Prices are no longer consistent across regions.

Which of the following is an example of earned income?

• Interest from a savings account

• Salary from a full-time job

• Capital gains from selling stocks

• Rental income from property