economics edge 100% Exam #1 Questions with correct
answers
Why might variable expenses change a great deal at different times of year?
Heating and cooling costs might vary considerably.
Income taxes and withholdings may increase or decrease.
Car loan payments become higher in certain seasons.
Discretionary spending may rise when fixed expenses rise. - ✔✔Heating and
cooling costs might vary considerably.
Which is the best way to achieve long-term financial goals?
Spend less on mandatory expenses.
Eliminate short-term financial goals.
Increase discretionary expenditures.
Save more money from net income. - ✔✔Save more money from net income.
Mindy wants to save money to buy a new couch.
Which would be the best strategy for her to accomplish her goal?
adopt a dog from a shelter
stop paying her credit card bill
decrease the budget for basic food needs
forgo watching movies online or in the theater - ✔✔forgo watching movies online
or in the theater
Kerry knows that a new car is in her future.
Which would be the best strategy to help her accomplish this goal?
,contribute to a savings account
give up paying for health insurance
stop paying the full amount of rent
apply for and open a new credit card - ✔✔contribute to a savings account
Which is an example of an income deduction?
an unexpected salary cut
wages lost due to illness
vacation budget
retirement savings - ✔✔retirement savings
From what part of income should someone take savings?
what otherwise would be fixed expenses
gross income, before other deductions
what otherwise would be discretionary income
gross income, along with other deductions - ✔✔what otherwise would be
discretionary income
What effect would a tax increase have on income?
It would reduce gross income.
It would not affect net income.
It would increase net income.
It would not affect gross income. - ✔✔It would not affect gross income.
, When a person invests income, he or she
spends no money in the short term and saves it all for the long term.
uses money in a way that will increase its value in the future.
spends income only on essential needs such as housing.
cuts out all discretionary spending for a set period to save money. - ✔✔uses
money in a way that will increase its value in the future.
What type of expense is an example of the cost to drive to and from work?
a variable expense.
a fixed expense.
a short-term expense.
a discretionary expense. - ✔✔a variable expense.
Read the scenario.
Brad has a steady job, earns a solid income, and plans to live in a nearby city for
the long term. He is looking to purchase both a car and a place to live, and he is
very interested in building up equity and credit.
Which of the following illustrates the most economically sound choice for Brad?
buying both a car and a home
leasing both a car and home
buying a car and leasing a home
leasing a car and buying a home - ✔✔buying both a car and a home
At what point does buying in bulk stop being a wise spending choice?
when the consumer has a lot of space to store bulk items
answers
Why might variable expenses change a great deal at different times of year?
Heating and cooling costs might vary considerably.
Income taxes and withholdings may increase or decrease.
Car loan payments become higher in certain seasons.
Discretionary spending may rise when fixed expenses rise. - ✔✔Heating and
cooling costs might vary considerably.
Which is the best way to achieve long-term financial goals?
Spend less on mandatory expenses.
Eliminate short-term financial goals.
Increase discretionary expenditures.
Save more money from net income. - ✔✔Save more money from net income.
Mindy wants to save money to buy a new couch.
Which would be the best strategy for her to accomplish her goal?
adopt a dog from a shelter
stop paying her credit card bill
decrease the budget for basic food needs
forgo watching movies online or in the theater - ✔✔forgo watching movies online
or in the theater
Kerry knows that a new car is in her future.
Which would be the best strategy to help her accomplish this goal?
,contribute to a savings account
give up paying for health insurance
stop paying the full amount of rent
apply for and open a new credit card - ✔✔contribute to a savings account
Which is an example of an income deduction?
an unexpected salary cut
wages lost due to illness
vacation budget
retirement savings - ✔✔retirement savings
From what part of income should someone take savings?
what otherwise would be fixed expenses
gross income, before other deductions
what otherwise would be discretionary income
gross income, along with other deductions - ✔✔what otherwise would be
discretionary income
What effect would a tax increase have on income?
It would reduce gross income.
It would not affect net income.
It would increase net income.
It would not affect gross income. - ✔✔It would not affect gross income.
, When a person invests income, he or she
spends no money in the short term and saves it all for the long term.
uses money in a way that will increase its value in the future.
spends income only on essential needs such as housing.
cuts out all discretionary spending for a set period to save money. - ✔✔uses
money in a way that will increase its value in the future.
What type of expense is an example of the cost to drive to and from work?
a variable expense.
a fixed expense.
a short-term expense.
a discretionary expense. - ✔✔a variable expense.
Read the scenario.
Brad has a steady job, earns a solid income, and plans to live in a nearby city for
the long term. He is looking to purchase both a car and a place to live, and he is
very interested in building up equity and credit.
Which of the following illustrates the most economically sound choice for Brad?
buying both a car and a home
leasing both a car and home
buying a car and leasing a home
leasing a car and buying a home - ✔✔buying both a car and a home
At what point does buying in bulk stop being a wise spending choice?
when the consumer has a lot of space to store bulk items
