WISE Financial Literacy Test terms UPDATED ACTUAL
EXAM QUESTIONS AND CORRECT ANSWERS
Question 1.
sources of income
ANSWER
wages, rentals, interest, capital, profits, investments, entrepreneurship
Question 2.
exemption
ANSWER
also called allowance: used to reduce amount of taxed income
Question 3.
liquidity
ANSWER
the degree of ease in which assets can be sold
Question 4.
gift cards
ANSWER
closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from particular businesses
Question 5.
discretionary income
ANSWER
also called budget surplus; not allocated for food or shelter
, Question 6.
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.
Question 7.
why does US currency have value
ANSWER
there is a belief that money has value and therefore is accepted.
Question 8.
opportunity cost
ANSWER
next best alternative; it is what is given up when a choice is made.
Question 9.
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.
Question 10.
treasury department
ANSWER
collects taxes, prints money, issues treasury bonds.
EXAM QUESTIONS AND CORRECT ANSWERS
Question 1.
sources of income
ANSWER
wages, rentals, interest, capital, profits, investments, entrepreneurship
Question 2.
exemption
ANSWER
also called allowance: used to reduce amount of taxed income
Question 3.
liquidity
ANSWER
the degree of ease in which assets can be sold
Question 4.
gift cards
ANSWER
closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from particular businesses
Question 5.
discretionary income
ANSWER
also called budget surplus; not allocated for food or shelter
, Question 6.
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.
Question 7.
why does US currency have value
ANSWER
there is a belief that money has value and therefore is accepted.
Question 8.
opportunity cost
ANSWER
next best alternative; it is what is given up when a choice is made.
Question 9.
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.
Question 10.
treasury department
ANSWER
collects taxes, prints money, issues treasury bonds.
