Wise Financial Literacy Test ACTUAL
UPDATED Questions and CORRECT
Answers
sources of income - CORRECT ANSWER - wages, rentals, interest, capital, profits,
investments, entrepreneurship
exemption - CORRECT ANSWER - also called allowance: used to reduce amount of
taxed income
liquidity - CORRECT ANSWER - the degree of ease in which assets can be sold
gift cards - CORRECT ANSWER - closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from particular businesses
discretionary income - CORRECT ANSWER - also called budget surplus; not allocated
for food or shelter
money order - CORRECT 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 - CORRECT ANSWER - there is a belief that money
has value and therefore is accepted.
opportunity cost - CORRECT ANSWER - next best alternative; it is what is given up
when a choice is made.
, inflation - CORRECT 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 - CORRECT ANSWER - collects taxes, prints money, issues treasury
bonds.
pay yourself first - CORRECT ANSWER - strategy for saving for the future by putting
money aside before paying regular monthly bills
certificate of deposit - CORRECT ANSWER - it is a time deposit offered at financial
institutions-penalty if cashed before maturity.
institutions that give loans - CORRECT ANSWER - banks, credit unions, financial
companies, payday lenders, tax preparers
institutions that charge high intrest - CORRECT ANSWER - pawnshops, payday lenders,
tax refund lenders, tax refund lenders, finance companies.
credit union - CORRECT ANSWER - member owned co-operative financial institution-
advantage is lower interest rates on loans.
overdraft protection - CORRECT ANSWER - a feature offered by banks to keep your
checking account from over drafting when you write a check or swipe your debit card but don't
have enough money in your account. It is a loan that is paid back.
compound interest - CORRECT ANSWER - interest added to principal- interest earned on
interest.
UPDATED Questions and CORRECT
Answers
sources of income - CORRECT ANSWER - wages, rentals, interest, capital, profits,
investments, entrepreneurship
exemption - CORRECT ANSWER - also called allowance: used to reduce amount of
taxed income
liquidity - CORRECT ANSWER - the degree of ease in which assets can be sold
gift cards - CORRECT ANSWER - closed loop system and open loop system;
can be purchased in fixed amounts and redeemed for purchases from particular businesses
discretionary income - CORRECT ANSWER - also called budget surplus; not allocated
for food or shelter
money order - CORRECT 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 - CORRECT ANSWER - there is a belief that money
has value and therefore is accepted.
opportunity cost - CORRECT ANSWER - next best alternative; it is what is given up
when a choice is made.
, inflation - CORRECT 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 - CORRECT ANSWER - collects taxes, prints money, issues treasury
bonds.
pay yourself first - CORRECT ANSWER - strategy for saving for the future by putting
money aside before paying regular monthly bills
certificate of deposit - CORRECT ANSWER - it is a time deposit offered at financial
institutions-penalty if cashed before maturity.
institutions that give loans - CORRECT ANSWER - banks, credit unions, financial
companies, payday lenders, tax preparers
institutions that charge high intrest - CORRECT ANSWER - pawnshops, payday lenders,
tax refund lenders, tax refund lenders, finance companies.
credit union - CORRECT ANSWER - member owned co-operative financial institution-
advantage is lower interest rates on loans.
overdraft protection - CORRECT ANSWER - a feature offered by banks to keep your
checking account from over drafting when you write a check or swipe your debit card but don't
have enough money in your account. It is a loan that is paid back.
compound interest - CORRECT ANSWER - interest added to principal- interest earned on
interest.
