5
QuizMultiple Choice

3.11 Budgeting

Question 5 • Personal Finance - EL3403

When a person invests income, he or she

Answer
A
spends no money in the short term and saves it all for the long term.
B
uses money in a way that will increase its value in the future.
C
spends income only on essential needs such as housing.
D
cuts out all discretionary spending for a set period to save money.

Explanation

Investing means using money to buy an asset or make a financial investment with the goal of increasing its value or earning a return over time. That matches choice B, “uses money in a way that will increase its value in the future.” The other choices describe saving all income or limiting spending, not investing.

AI-written and checked against the verified answer.

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