Understanding Business Basics Quiz

A family is struggling to pay all their bills each month. Using what you know about personal budgets, what steps should they take to improve their financial situation?

• Spend more money on entertainment

• Create a plan for income and spending, and track their expenses

• Take out more loans without a plan

Imagine you are starting a new business. What strategies could you use to make your business more competitive and attract more buyers?

• Raise prices higher than everyone else

• Lower prices and improve the quality of your goods or services

• Only sell to friends and family

Suppose you want to save money for a new bicycle. How could you use a bank to help you reach your goal, and what should you consider when choosing a bank?

• Hide your money at home

• Open a savings account at a bank and compare interest rates

• Spend all your money immediately

A business is not making a profit. What are some possible reasons for this, and what could the business do to improve its situation?

• Ignore costs and keep prices the same

• Analyze expenses, reduce unnecessary costs, and find ways to increase sales

• Give away products for free

If a bank wants to increase its profits, what actions could it take, and what should it be careful about?

• Charge higher interest on loans, but ensure rates are fair and legal

• Give away free money to everyone

• Stop offering loans

You have $50 in income each week. If you want to “make ends meet” and also save some money, how should you plan your spending?

• Spend all $50 every week

• Create a budget to cover needs first, then save a portion of your income

• Only buy things you want, not things you need

A new business is opening in your town. How might this affect other businesses and buyers in the area?

• It could increase competition, leading to better prices and quality for buyers

• It will have no effect on anyone

• It will only help the new business

If a person loses their job at a private business, what are some steps they can take to find new work and manage their income?

• Do nothing and wait for money to appear

• Look for job openings, update their skills, and create a new budget based on their current income

• Spend all their savings right away

Imagine you are in charge of a business. How would you decide how many workers to hire?

• Hire as many people as possible, no matter the cost

• Analyze the amount of work needed and the business’s budget before hiring

• Only hire friends and family

Suppose you want to buy a new video game, but you also need to pay for school supplies. How can you use a personal budget to make a smart decision?

• Spend all your money on the video game

• List your income and expenses, prioritize needs, and see if you have enough left for the game

• Ignore your needs and buy what you want