WISE FINANCIAL LITERACY
COMPREHENSIVE EXAM STUDY GUIDE
WITH COMPLETE SOLUTIONS
●● unearned income
Answer: Any income that comes from investments and other sources
unrelated to employment services. Examples: interest from a savings
account, bond interest, alimony, and dividends from stock
●● liquidity
Answer: The ability to convert an asset to cash quickly and with
minimal impact to the price
●● liquidity examples
Answer: cash, most stocks, money market instruments and government
bonds
●● money market accounts
Answer: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
●● bonds
,Answer: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
●● Gift cards
Answer: A gift card is a restricted monetary equivalent is issued by
retailers or banks to be used as an alternative to a non-monetary gift.
●● Discretionary income and budget surplus
Answer: The amount of an individual's income that is left for spending,
investing or saving after taxes and personal necessities (such as food,
shelter, and clothing) have been paid. Discretionary income includes
money spent on luxury items, vacations and non-essential goods and
services.
●● money orders
Answer: A certificate that allows the stated payee to receive cash
on-demand, usually issued by governments and banking institutions. A
money order functions much like a check, in that the person who
purchased the money order may stop payment.
●● why does the US currency have value
Answer: Its value is only based on what we can get in exchange for it.
Or put it another way, money has value as long as other people believe
the money you give them can be
exchanged for the goods and services they desire in the
, future.
●● opportunity cost
Answer: the value of the best alternative that must be given up when
scarce resources are used for one purpose instead of another
●● inflation
Answer: a general increase in prices and a corresponding decrease in
money's purchasing power
●● Consumer Price Index (CPI)
Answer: a measure of the overall cost of the goods and services bought
by a typical consumer
●● Inflation
Answer: An increase in the overall price level.
●● Who gets hurt the most from inflation
Answer: Those with fixed incomes (retired people)
●● who gets hurt the least from inflation
Answer: borrowers and producers
COMPREHENSIVE EXAM STUDY GUIDE
WITH COMPLETE SOLUTIONS
●● unearned income
Answer: Any income that comes from investments and other sources
unrelated to employment services. Examples: interest from a savings
account, bond interest, alimony, and dividends from stock
●● liquidity
Answer: The ability to convert an asset to cash quickly and with
minimal impact to the price
●● liquidity examples
Answer: cash, most stocks, money market instruments and government
bonds
●● money market accounts
Answer: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
●● bonds
,Answer: it is the organized exchange on which participants can lend and
borrow large sums of money for a period of one year or less
●● Gift cards
Answer: A gift card is a restricted monetary equivalent is issued by
retailers or banks to be used as an alternative to a non-monetary gift.
●● Discretionary income and budget surplus
Answer: The amount of an individual's income that is left for spending,
investing or saving after taxes and personal necessities (such as food,
shelter, and clothing) have been paid. Discretionary income includes
money spent on luxury items, vacations and non-essential goods and
services.
●● money orders
Answer: A certificate that allows the stated payee to receive cash
on-demand, usually issued by governments and banking institutions. A
money order functions much like a check, in that the person who
purchased the money order may stop payment.
●● why does the US currency have value
Answer: Its value is only based on what we can get in exchange for it.
Or put it another way, money has value as long as other people believe
the money you give them can be
exchanged for the goods and services they desire in the
, future.
●● opportunity cost
Answer: the value of the best alternative that must be given up when
scarce resources are used for one purpose instead of another
●● inflation
Answer: a general increase in prices and a corresponding decrease in
money's purchasing power
●● Consumer Price Index (CPI)
Answer: a measure of the overall cost of the goods and services bought
by a typical consumer
●● Inflation
Answer: An increase in the overall price level.
●● Who gets hurt the most from inflation
Answer: Those with fixed incomes (retired people)
●● who gets hurt the least from inflation
Answer: borrowers and producers
