2. 1.01 Review Personal Finance

3. Which is an example of responsible borrowing? A: Barry asked his mother for an advance on his allowance so he could buy another CD. A: Barry asked his mother for an advance on his allowance so he could buy another CD. B: Ed accepted a loan from his uncle because he knew he could pay it back. B: Ed accepted a loan from his uncle because he knew he could pay it back. C: Fran borrowed her mother's credit card without permission to use at a big sale. C: Fran borrowed her mother's credit card without permission to use at a big sale. D: Greg spent all of his paycheck before he remembered he had a debt to repay. D: Greg spent all of his paycheck before he remembered he had a debt to repay.

4. Which is an example of responsible earning? A: Dorothy decided to keep her part-time job until she could find another so she could continue to meet her monthly expenses. A: Dorothy decided to keep her part-time job until she could find another so she could continue to meet her monthly expenses. B: Josh refused to accept his friend's offer to use his car because he did not know if his friend's insurance would cover him in the event of an accident. B: Josh refused to accept his friend's offer to use his car because he did not know if his friend's insurance would cover him in the event of an accident. C: Kate compared costs of school supplies in several stores before deciding where to shop. C: Kate compared costs of school supplies in several stores before deciding where to shop. D: Larry set aside $30 from his part-time job earnings each month to help pay his senior expenses. D: Larry set aside $30 from his part-time job earnings each month to help pay his senior expenses.

5. Fred put 5% of his earnings into an interest- bearing savings account each month. For Fred, this illustrates which benefit of saving? A: Can be used to earn additional income B: Produce a healthy economy C: Provide growth opportunities for business ventures C: Provide growth opportunities for business ventures D: Provide money for future purchases

6. Jim decided to save his money for his senior expenses rather than spending it at the mall. This illustrates: A: considering lifetime earnings when making career choices. A: considering lifetime earnings when making career choices. B: making wise choices in light of trade-offs. C: planning purchases in advance. D: using one's knowledge to increase earnings.

7. The Hayes family puts aside $50 every month for unexpected emergencies. When Mr. Hayes lost his job, the family was glad to have this money to pay bills until he could find a new job. This illustrates: A: borrowing only what can be paid back when due. A: borrowing only what can be paid back when due. B: finding forms of saving that yield high returns. B: finding forms of saving that yield high returns. C: forming the habit of saving regularly. D: making wise choices in light of opportunity costs. D: making wise choices in light of opportunity costs.

8. Kim has always loved and understood dogs; now she has a part-time job dog-sitting in the neighborhood. This illustrates: A: borrowing only what can be paid back when due. A: borrowing only what can be paid back when due. B: forming the habit of saving regularly. C: planning purchases in advance. D: using one's knowledge to increase earnings.

9. Tom borrowed $100 from a friend to buy items he needed for work with a retail value of $300. When he gets his next paycheck, he will have enough money to pay off the debt. This illustrates: A: enabling people to earn more and raise their standard of living. A: enabling people to earn more and raise their standard of living. B: encouraging people to spend less and save more. B: encouraging people to spend less and save more. C: use of borrowing to place oneself in great debt. C: use of borrowing to place oneself in great debt. D: wise use of credit to extend a person's buying power. D: wise use of credit to extend a person's buying power.

10. Sharon paid for an unexpected trip to the emergency room instead of paying her car payment. This illustrates: A: a high standard of living. B: an opportunity cost. C: the cost of credit. D: workplace trends and opportunities.

11. Rick cannot afford to buy Christmas gifts for everyone in his family. This illustrates: A: a benefit of saving. B: an opportunity cost. C: a trade-off. D: the Law of Scarcity.

12. Amanda always wanted to become a nurse even though she knew that health care professionals do not generally make good salaries. Amanda's choice of occupation will directly influence her: A: ability to advance in her profession. B: job performance. C: standard of living. D: workplace trend.

13. Larry went to college thinking he would become a computer technician, then changed his mind and decided to become a university professor. Larry's choice of occupation will directly influence his expected: A: borrowing. B: earnings. C: savings. D: spending.

14. Nancy works in a restaurant where she receives tips. Receiving tips is an example of which economic activity? A: borrowing B: saving C: spending D: earning

15. Susan is going to obtain a loan to buy a stereo system. This is an example of which economic activity? A: borrowing B: earning C: saving D: spending

16. Which is an example of earning? A: Ed asked his mother for a loan. B: Evan bought a coat with a debit card. C: Mary loaned her credit card to a friend. D: Sam sold things he made at a flea market.

17. Which is an example of spending? A: Mark's boss advanced him wages so he could pay his rent. A: Mark's boss advanced him wages so he could pay his rent. B: Kay has a savings account for emergencies. C: Mary bought a pair of designer jeans on the Internet. C: Mary bought a pair of designer jeans on the Internet. D: Tim put money in the bank for his senior trip. D: Tim put money in the bank for his senior trip.

18. Which is an example of saving? A: Ben took out a loan to buy a car. B: Kay wrote a check for a CD at a store. C: Mary put money in a bank account. D: Sara used her debit card to make a purchase. D: Sara used her debit card to make a purchase.