Final Exam Review: Personal Financial Literacy
Taxes:
1. What is the main difference between income taxes and sales taxes?
2. How can tax deductions impact an individual's taxable income?
3. Which of the following is an example of a property tax?
A. Sales tax on a new car purchase.
B. Income tax on a high-earning individual.
C. Property tax on a home.
D. Excise tax on a pack of cigarettes.
4. How can tax deductions impact an individual's disposable income?
5. Which of the following is an example of a regressive tax?
A. Sales tax on a new car purchase.
B. Income tax on a high-earning individual.
C. Property tax on a home.
D. Excise tax on a pack of cigarettes.
6. What is the purpose of property taxes?
7. Which of the following is NOT a common tax deduction?
A. Medical expenses.
B. Grocery expenses.
C. Mortgage interest.
D. Charitable donations.
8. What are taxes?
9. What is the main difference between progressive and regressive taxation?
10. What is the purpose of excise taxes?
Budgeting:
1. What should be considered when formulating a budget?
2. How does budgeting relate to financial control?
3. Which of the following is NOT a common expense category in budgeting?
A. Housing
B. Transportation
C. Savings
D. Investments
4. What is the definition of budgeting?
5. How does budgeting contribute to achieving financial stability and security?
A. By creating a safety net for emergencies
B. By managing debts and avoiding unnecessary interest charges
C. By setting and achieving financial goals
D. All of the above
6. Why is budgeting important in personal financial literacy?
A. To manage debts and avoid unnecessary interest charges
B. To set and achieve financial goals
C. To gain control over finances and make informed decisions
D. All of the above
7. Which of the following is an example of a fixed expense in budgeting?
A. Groceries
B. Entertainment
C. Transportation
D. Rent
8. How is budgeting similar to planning a road trip?
A. Both involve estimating costs and allocating funds
B. Both require tracking expenses and setting goals
C. Both involve monitoring and adjusting
D. Both require setting financial goals and prioritizing expenses
9. What is the first step in the budgeting process?
10. Why is it important to track expenses and set financial goals in budgeting?
A. To gain control over finances and make informed decisions
B. To manage debts and avoid unnecessary interest charges
C. To set and achieve financial goals
D. All of the above
Financial Schemes & Fraud:
1. What is the main goal of financial schemes?
2. What are financial schemes?
3. What is the main difference between Ponzi schemes and pyramid schemes?
4. What is the impact of financial schemes on individuals, businesses, and
economies?
5. What is the role of education and awareness in preventing financial schemes?
A. It is the only way to prevent financial schemes
B. It is not necessary in preventing financial schemes
C. It is the responsibility of the victims
D. It is the responsibility of the government
6. How do pyramid schemes generate profits?
A. By recruiting new participants
B. By receiving donations
C. By investing in legitimate businesses
D. By selling products or services
7. What happens when a Ponzi scheme collapses?
8. What is the relationship between financial schemes and personal gain?
9. Which of the following is an example of a Ponzi scheme?
A. A company promising high returns on investments
B. A company selling rare gemstones
C. A company providing free financial advice
D. A company offering a discount on products
10. What is the first step in protecting oneself from financial schemes?
A. Donating to charitable causes
B. Reporting any suspicious activity
C. Educating oneself about different types of schemes
D. Investing in government-regulated plans
Debt & Bankruptcy:
1. What is the main difference between secured and unsecured debt?
2. Which of the following is an example of mortgage debt?
A. A credit card debt
B. A student loan
C. A car loan
D. A home loan
3. What is the main purpose of bankruptcy?
4. What is the main purpose of Chapter 13 bankruptcy?
5. What is the purpose of Chapter 7 bankruptcy?
6. Which of the following is NOT a characteristic of student loans?
A. They are secured by an asset
B. They have more flexible repayment options than other forms of debt
C. They are used to cover educational expenses
D. They have lower interest rates than other forms of debt
7. Which type of bankruptcy allows individuals to keep their assets while making
regular payments to creditors?
A. Chapter 7 bankruptcy
B. Chapter 13 bankruptcy
C. Chapter 11 bankruptcy
D. Chapter 9 bankruptcy
8. Why is managing debt important?
9. What is the main purpose of Chapter 7 bankruptcy?
10. What is the impact of bankruptcy on financial stability?
Home Buying Basics:
1. What is the minimum payment (percentage) that you can put down for an
investment property?
2. What is the minimum payment (percentage) that your can put down for a
conventional loan?
3. What is the minimum payment (percentage) that you can put down for an FHA
Loan?
4. What is the purpose of factoring in additional costs when buying a home?
5. What is the purpose of understanding financing options for homebuyers?
6. What is the first step in the mortgage process?
7. What is the recommended percentage of gross monthly income to spend on
housing expenses?
8. What is the foundation of personal finance?
9. What are the different financing options available to homebuyers?
Crimes Against Consumers:
1. What is fraud?
2. What is an example of a counterfeit product?
3. What is an example of a consumer responsibility?
A. Sharing personal information with strangers
B. Buying counterfeit products
C. Being an informed consumer
D. Engaging in fraudulent practices
4. What is an example of a consumer right?
A. The right to complain
B. The right to engage in fraudulent practices
C. The right to share personal information
D. The right to buy counterfeit products
5. What is an example of a fraudulent practice?
A. Advertising a product with false claims
B. Buying a counterfeit product
C. Creating a budget for personal finances
D. Investing in a legitimate business
6. Which of the following is a consumer responsibility?
A. Being an informed consumer
B. Sharing personal information with strangers
C. Engaging in fraudulent practices
D. Buying counterfeit products
7. What are consumer rights?
8. Which of the following is an example of fraud?
A. A student creating a budget for their allowance
B. A person buying a counterfeit product
C. A company advertising a product with false claims
D. A person investing in a legitimate business
Short Answer Question:
• Explain the Home Buying Process: