AnswersAA - F26 Personal Finance and EconomicsBudgeting

Budgeting Answers

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1
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When should fixed and variable monthly budgeted expenses first be planned?

a
at the end of each month
d
day by day during the month
a
at the start of each month
a
at least twice per month
2
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A short-term financial goal might include saving for

A
a down payment on a house.
B
a piece of furniture.
C
a child’s college fund.
D
one’s retirement.
3

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A
actual
B
potential
C
likely
4

This pie chart shows a sample weekly budget.

Question illustration
A
$70
B
$75
C
$10
D
$35
5

What effect would a tax increase have on income?

A
It would reduce gross income.
B
It would not affect net income.
C
It would increase net income.
D
It would not affect gross income.
6

Mindy wants to save money to buy a new couch.Which would be the best strategy for her to accomplish her goal?

A
adopt a dog from a shelter
B
stop paying her credit card bill
C
decrease the budget for basic food needs
D
forgo watching movies online or in the theater
7

Look at this monthly budget.Monthly Budget

Question illustration
A
Add to fixed expenses.
D
Decrease food expenses.
R
Reduce rent payments.
I
Increase total income.
8

Leo’s car broke down, and he must find money in his limited budget to pay the repair bill.Which of the following is the best solution for Leo to handle the unplanned spending?

A
Leo forgoes going out to dinner.
B
Leo forgoes paying the rent on his apartment.
C
Leo forgoes paying his water bill.
D
Leo forgoes paying his electricity bill.
9

best

S
Spend less on mandatory expenses.
E
Eliminate short-term financial goals.
I
Increase discretionary expenditures.
S
Save more money from net income.
10

When a person invests income, he or she

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.
11

Kerry knows that a new car is in her future.Which would be the best strategy to help her accomplish this goal?

A
contribute to a savings account
B
give up paying for health insurance
C
stop paying the full amount of rent
D
apply for and open a new credit card
12

From what part of income should someone take savings?

w
what otherwise would be fixed expenses
g
gross income, before other deductions
w
what otherwise would be discretionary income
g
gross income, along with other deductions
13

Look at this monthly budget.Monthly Budget

Question illustration
A
Add to fixed expenses.
B
Decrease food expenses.
C
Reduce rent payments.
D
Increase total income.
14

A short-term financial goal might include saving for

A
a down payment on a house.
B
a piece of furniture.
C
a child’s college fund.
D
one’s retirement.
15

Mindy wants to save money to buy a new couch.Which would be the best strategy for her to accomplish her goal?

A
adopt a dog from a shelter
B
stop paying her credit card bill
C
decrease the budget for basic food needs
D
forgo watching movies online or in the theater
16

What effect would a tax increase have on income?

A
It would reduce gross income.
B
It would not affect net income.
C
It would increase net income.
D
It would not affect gross income.
17

Which is an example of an income deduction?

A
an unexpected salary cut
B
wages lost due to illness
C
vacation budget
D
retirement savings
18

Leo’s car broke down, and he must find money in his limited budget to pay the repair bill.Which of the following is the best solution for Leo to handle the unplanned spending?

A
Leo forgoes going out to dinner.
B
Leo forgoes paying the rent on his apartment.
C
Leo forgoes paying his water bill.
D
Leo forgoes paying his electricity bill.
19

What is most likely the reason variable expenses should be planned after fixed expenses?

A
Fixed expenses are deducted from gross income, and variable expenses come from net income.
B
Variable expenses are a necessary part of fixed expenses but can only be calculated after fixed expenses.
C
Variable expenses are almost always higher than fixed expenses and need a greater budget.
D
Fixed expenses are required and constant, but variable expenses are more flexible.
20

[BLANK]

A
variable
B
fixed
C
uncertain

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