Chapter 4 - Household Budgets Quiz

What is a budget?

• A financial plan of expected future income and expenditure

• A record of past expenses

• A list of household chores

• A schedule for daily activities

What is the benefit of preparing a household budget?

• It helps in planning vacations

• It encourages people to think about their spending

• It increases monthly income

• It reduces household chores

What does a balanced budget mean?

• Expenditure is greater than income

• Income is greater than expenditure

• There is no income or expenditure

• Income exactly equals expenditure

What is net cash?

• The cash at the beginning of the month

• The cash left over at the end of each time period

• The total expenditure of a household

• The total income of a household

What should be done with a budget surplus?

• Reduce income

• Borrow more money

• Use it to fund some extra expenditure

• Ignore it

What is a budget deficit?

• Income is less than expenditure

• Income equals expenditure

• Income is greater than expenditure

• There is no income or expenditure

Which of the following is a measure to deal with a budget deficit?

• Decrease income

• Increase expenditure

• Ignore the deficit

• Increase income

How do you calculate closing cash?

• Multiply opening cash by net cash

• Add opening cash to net cash

• Divide opening cash by net cash

• Subtract opening cash from net cash

What is the first step in creating a household budget?

• Multiply total income by total expenditure

• Calculate closing cash

• Add total income to total expenditure

• Subtract total expenditure from total income

What does analyzing a budget involve?

• Ignoring key trends and patterns

• Looking at it closely to understand key trends and patterns

• Only focusing on income

• Only focusing on expenditure