Module 14 Test Questions Graded A+

Module 14 Test Questions Graded A+ When interest is earned not only on principal but also earned on interest, it is referred to as compound interest Net worth is calculated by subtracting liabilities from assets Which of the following are strategies that help in saving for an emergency fund? Start small, focus on the benefits, and treat savings like a bill. Are fixed costs considered to be anticipated or unanticipated costs? Are variable costs considered to be anticipated or unanticipated costs? a. Fixed costs are anticipated costs and variable costs are unanticipated costs. * b. Fixed costs are unanticipated costs and variable costs are anticipated costs. c. Fixed costs are unanticipated costs and variable costs are unanticipated costs. d. Fixed costs are anticipated costs and variable costs are anticipated costs. Examples of unanticipated income include gifts, bonuses, inheritances A budget is a plan for spending money based on income, expenses and financial goals Which of the following is not included in a net worth statement? $50 per month for a gym membership Being aware of the Federal Reserve's monetary policy and how it can affect interest rates can impact planning for major purchases. When interest rates rise the Federal Reserve is combating _________ and makes it _______ expensive to finance a car or a home loan. a. unemployment; more * b. unemployment; less c. inflation; less d. inflation; more (( At the end of the month Corrine's budget has money left over. She can either a. Spend less or save less. b. Spend less or save more. c. Spend more or save more. * d. Spend more or save less. In making a decision about the costs of postsecondary education, these costs should be compared to a. the length of time to pay off private loans. b. future potential earnings. * c. potential number of years in postsecondary education d. potential number of years working in a career. In repaying direct subsidized federal student loans, interest payments begin a. as soon as the money is borrowed b. when the borrower has a job for one year c. six months after graduation * d. at graduation The types of student aid that typically do not need to be repaid include scholarships and a. loans on an extended repayment plan b. private loans c. grants * d. federal student loans When inflation occurs, the impact on savings is a. positive b. no effect c. negative * d. positive then negative Generally speaking, a car is what type of asset? a. appreciating b. business asset c. depreciating * d. wealth building The FAFSA application identifies for students which of the following? a. the estimated family contribution and the amount of private loans available to the student b. the estimated family contribution and the colleges to which the student will be admitted c. the estimated family tax deductions and the amount of financial aid available to the student * d. the estimated family contribution and the amount of financial aid available to the student