W!SE Money Quiz (1)

What is NOT a source of income?

• Rentals

• Taxes

• Profits

• Interest

• Capital

What is an exemption (also known as an allowance) and how does it work?

• It is used to reduce the amount of taxed income

• It increases the amount of taxed income

• It has no effect on taxed income

What does liquidity mean and what products are considered liquid?

• The degree of ease in which assets can be sold

• The difficulty in selling assets

• The inability to sell assets

How do gift cards work?

• Closed loop system and open loop system

• Only closed loop system

• Only open loop system

What is discretionary income or budget surplus?

• Income not allocated for food or shelter

• Income allocated for food and shelter

• Income allocated for savings

What is a money order and how is it used?

• A payment order for a pre-specified amount of money, used like a check

• A loan for a pre-specified amount of money

• A credit card for a pre-specified amount of money

Why does the U.S. currency have value even though it is not tied to a commodity?

• There is a belief that money has value and therefore is accepted

• It is tied to gold reserves

• It is backed by foreign currencies

What is opportunity cost?

• The next best alternative given up when a choice is made

• The cost of the chosen option

• The financial cost of an opportunity

Who is hurt the most and the least with inflation?

• Most hurt are lenders and people on fixed income; least hurt are those who owe large amounts of money

• Most hurt are borrowers; least hurt are lenders

• Most hurt are people with variable income; least hurt are people with fixed income

What is the role of the Treasury Department?

• Collects taxes, prints money, issues treasury bonds

• Only collects taxes

• Only prints money