WISE FINANCIAL LITERACY EXAM
PREPARATION TEST BANK WITH CORRECT
ANSWERS
●● exemption
Answer: also called allowance: used to reduce amount of taxed income
●● liquidity
Answer: the degree of ease in which assets can be sold
●● gift cards
Answer: closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from
particular businesses
●● discretionary income
Answer: also called budget surplus; not allocated for food or shelter
●● money order
Answer: a payment order for a pre-specified amount of money and is
purchased at a different types of stores- it is used like a check. They are
usually limited in maximum face value to some specified figure. (For
, example, the United States Postal Service limits domestic postal money
orders to US $1,000.00); US Postal money orders are hard to counterfeit.
●● why does US currency have value
Answer: there is a belief that money has value and therefore is accepted.
●● opportunity cost
Answer: next best alternative; it is what is given up when a choice is
made.
●● inflation
Answer: hurt: lenders (banks) and people living on fixed income. Least
hurt: those who owe large amounts of money;
a general increase in prices and fall in the purchasing value of money.
●● treasury department
Answer: collects taxes, prints money, issues treasury bonds.
●● pay yourself first
Answer: strategy for saving for the future by putting money aside before
paying regular monthly bills
●● certificate of deposit
PREPARATION TEST BANK WITH CORRECT
ANSWERS
●● exemption
Answer: also called allowance: used to reduce amount of taxed income
●● liquidity
Answer: the degree of ease in which assets can be sold
●● gift cards
Answer: closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from
particular businesses
●● discretionary income
Answer: also called budget surplus; not allocated for food or shelter
●● money order
Answer: a payment order for a pre-specified amount of money and is
purchased at a different types of stores- it is used like a check. They are
usually limited in maximum face value to some specified figure. (For
, example, the United States Postal Service limits domestic postal money
orders to US $1,000.00); US Postal money orders are hard to counterfeit.
●● why does US currency have value
Answer: there is a belief that money has value and therefore is accepted.
●● opportunity cost
Answer: next best alternative; it is what is given up when a choice is
made.
●● inflation
Answer: hurt: lenders (banks) and people living on fixed income. Least
hurt: those who owe large amounts of money;
a general increase in prices and fall in the purchasing value of money.
●● treasury department
Answer: collects taxes, prints money, issues treasury bonds.
●● pay yourself first
Answer: strategy for saving for the future by putting money aside before
paying regular monthly bills
●● certificate of deposit
