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FHCE 3200 Exam 2 Questions and Correct
Answers/ Latest Update / Already Graded
Are financial obligations imposed on individuals and businesses by
government entities
Ans: Taxes
Governments use taxes to
Ans: - build infrastructure
- provide social welfare
- pay for national defense
- provide other public services
- encourage economic activity
Most working adults will pay the following types of taxes
Ans: - federal income taxes
- state income taxes
- payroll taxes
- sales taxes
- property taxes
All rights reserved © 2025/ 2026 |
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TVM Question: What is the future value of $500 a month over 30 years
earning a 7% annual rate of return?
Ans: $609,985.50
Is the total amount earned before taxes and other deductions
Ans: gross pay
are taken out of an employee's pay by the employer
Ans: withholdings
Withholdings can be
Ans: - mandated by law
- elected by employees
Withholdings mandated by law
Ans: Federal, State, FICA
Withholdings elected by employees
Ans: Retirement, Health and Life Insurance, Disability
Insurance
All rights reserved © 2025/ 2026 |
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Gross pay minus withholdings
Ans: net pay
The tax is used exclusively to pay for two government programs: Social
Security and Medicare
Ans: Federal Insurance Contributions Act (FICA)
Applies to earned income up to $137,700 (2019)
Ans: Social security
6.2% of Gross pay (half paid by employer; half paid by employee)
Ans: Social Security
Applies to all earned income
Ans: Medicare
1.45% of Gross pay (half paid by employer; half paid by employee)
Ans: Medicare
All rights reserved © 2025/ 2026 |
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Are imposed by state and local governments, on the sale of certain
goods and services, and are paid when you buy something
Ans: Sales taxes
What two factors determine how much a sales tax is?
Ans: 1. Tax base
2. Tax rate
The amount of money that will be taxed, generally the cost of the item
you purchase
Ans: tax base
Used to calculate the amount of tax owed and is generally denoted as a
percentage rate, such as 7.5%
Ans: tax rate
Assessed on the value of property you own, such as your car or your
home
Ans: property tax
vary by state and are most often assessed by the city or county
All rights reserved © 2025/ 2026 |
FHCE 3200 Exam 2 Questions and Correct
Answers/ Latest Update / Already Graded
Are financial obligations imposed on individuals and businesses by
government entities
Ans: Taxes
Governments use taxes to
Ans: - build infrastructure
- provide social welfare
- pay for national defense
- provide other public services
- encourage economic activity
Most working adults will pay the following types of taxes
Ans: - federal income taxes
- state income taxes
- payroll taxes
- sales taxes
- property taxes
All rights reserved © 2025/ 2026 |
, Page |2
TVM Question: What is the future value of $500 a month over 30 years
earning a 7% annual rate of return?
Ans: $609,985.50
Is the total amount earned before taxes and other deductions
Ans: gross pay
are taken out of an employee's pay by the employer
Ans: withholdings
Withholdings can be
Ans: - mandated by law
- elected by employees
Withholdings mandated by law
Ans: Federal, State, FICA
Withholdings elected by employees
Ans: Retirement, Health and Life Insurance, Disability
Insurance
All rights reserved © 2025/ 2026 |
, Page |3
Gross pay minus withholdings
Ans: net pay
The tax is used exclusively to pay for two government programs: Social
Security and Medicare
Ans: Federal Insurance Contributions Act (FICA)
Applies to earned income up to $137,700 (2019)
Ans: Social security
6.2% of Gross pay (half paid by employer; half paid by employee)
Ans: Social Security
Applies to all earned income
Ans: Medicare
1.45% of Gross pay (half paid by employer; half paid by employee)
Ans: Medicare
All rights reserved © 2025/ 2026 |
, Page |4
Are imposed by state and local governments, on the sale of certain
goods and services, and are paid when you buy something
Ans: Sales taxes
What two factors determine how much a sales tax is?
Ans: 1. Tax base
2. Tax rate
The amount of money that will be taxed, generally the cost of the item
you purchase
Ans: tax base
Used to calculate the amount of tax owed and is generally denoted as a
percentage rate, such as 7.5%
Ans: tax rate
Assessed on the value of property you own, such as your car or your
home
Ans: property tax
vary by state and are most often assessed by the city or county
All rights reserved © 2025/ 2026 |
