Back
0

Financial Literacy and Economic Education

Description: This quiz assesses your knowledge of financial literacy and economic education concepts.
Number of Questions: 15
Created by:
Tags: financial literacy economic education personal finance economics
Start the Quiz
Attempted 0/15 Correct 0 Score 0
‹
›

What is the primary purpose of a budget?

  1. To track income and expenses

  2. To save money

  3. To invest money

  4. To pay off debt

Show answer
Correct Option: A
Explanation:

A budget is a plan that outlines your income and expenses over a specific period of time, typically a month or a year. It helps you track your spending, identify areas where you can save money, and make informed financial decisions.

What is the difference between a debit card and a credit card?

  1. A debit card deducts money from your checking account immediately, while a credit card allows you to borrow money and pay it back later.

  2. A debit card allows you to borrow money and pay it back later, while a credit card deducts money from your checking account immediately.

  3. A debit card is a type of credit card.

  4. A credit card is a type of debit card.

Show answer
Correct Option: A
Explanation:

A debit card is linked to your checking account and deducts money from it immediately when you make a purchase. A credit card allows you to borrow money from the credit card company and pay it back later, typically with interest.

What is the rule of 72?

  1. It is a formula used to calculate the number of years it takes for an investment to double in value.

  2. It is a formula used to calculate the interest rate on a loan.

  3. It is a formula used to calculate the present value of a future cash flow.

  4. It is a formula used to calculate the future value of a present cash flow.

Show answer
Correct Option: A
Explanation:

The rule of 72 is a simple formula that can be used to estimate the number of years it takes for an investment to double in value. The formula is: Number of years = 72 / Annual interest rate.

What is the difference between a stock and a bond?

  1. A stock represents ownership in a company, while a bond is a loan to a company.

  2. A stock is a loan to a company, while a bond represents ownership in a company.

  3. A stock is a type of bond.

  4. A bond is a type of stock.

Show answer
Correct Option: A
Explanation:

A stock represents ownership in a company. When you buy a stock, you are essentially buying a small piece of the company. A bond is a loan to a company. When you buy a bond, you are lending money to the company and you will receive interest payments over time.

What is the purpose of a 401(k) plan?

  1. To save money for retirement

  2. To save money for a down payment on a house

  3. To save money for a child's education

  4. To save money for a vacation

Show answer
Correct Option: A
Explanation:

A 401(k) plan is a retirement savings plan offered by many employers. It allows employees to contribute a portion of their paycheck to a tax-advantaged account. The money in a 401(k) plan can be invested in stocks, bonds, and other investments.

What is inflation?

  1. A general increase in prices and fall in the purchasing value of money

  2. A general decrease in prices and rise in the purchasing value of money

  3. A general increase in prices and rise in the purchasing value of money

  4. A general decrease in prices and fall in the purchasing value of money

Show answer
Correct Option: A
Explanation:

Inflation is a general increase in prices and fall in the purchasing value of money. This means that the same amount of money will buy less goods and services over time.

What is the difference between a recession and a depression?

  1. A recession is a mild economic downturn, while a depression is a severe economic downturn.

  2. A recession is a severe economic downturn, while a depression is a mild economic downturn.

  3. A recession and a depression are the same thing.

  4. There is no difference between a recession and a depression.

Show answer
Correct Option: A
Explanation:

A recession is a mild economic downturn characterized by a decline in economic activity, employment, and income. A depression is a severe economic downturn characterized by a prolonged decline in economic activity, employment, and income.

What is the purpose of the Federal Reserve?

  1. To regulate the nation's banks and ensure the safety and soundness of the financial system

  2. To set interest rates

  3. To print money

  4. All of the above

Show answer
Correct Option: D
Explanation:

The Federal Reserve is the central bank of the United States. Its primary responsibilities are to regulate the nation's banks and ensure the safety and soundness of the financial system, set interest rates, and print money.

What is the difference between a progressive tax and a regressive tax?

  1. A progressive tax is a tax that is levied at a higher rate on higher incomes, while a regressive tax is a tax that is levied at a lower rate on higher incomes.

  2. A progressive tax is a tax that is levied at a lower rate on higher incomes, while a regressive tax is a tax that is levied at a higher rate on higher incomes.

  3. A progressive tax and a regressive tax are the same thing.

  4. There is no difference between a progressive tax and a regressive tax.

Show answer
Correct Option: A
Explanation:

A progressive tax is a tax that is levied at a higher rate on higher incomes. This means that the more money you earn, the higher percentage of your income you will pay in taxes. A regressive tax is a tax that is levied at a lower rate on higher incomes. This means that the more money you earn, the lower percentage of your income you will pay in taxes.

What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage?

  1. A fixed-rate mortgage has a constant interest rate for the life of the loan, while an adjustable-rate mortgage has an interest rate that can change over time.

  2. A fixed-rate mortgage has an interest rate that can change over time, while an adjustable-rate mortgage has a constant interest rate for the life of the loan.

  3. A fixed-rate mortgage and an adjustable-rate mortgage are the same thing.

  4. There is no difference between a fixed-rate mortgage and an adjustable-rate mortgage.

Show answer
Correct Option: A
Explanation:

A fixed-rate mortgage has a constant interest rate for the life of the loan. This means that the amount of your monthly mortgage payment will not change. An adjustable-rate mortgage has an interest rate that can change over time. This means that the amount of your monthly mortgage payment can change.

What is the purpose of a credit score?

  1. To determine your eligibility for a loan

  2. To determine the interest rate you will pay on a loan

  3. To determine the amount of money you can borrow

  4. All of the above

Show answer
Correct Option: D
Explanation:

A credit score is a number that lenders use to determine your eligibility for a loan, the interest rate you will pay on a loan, and the amount of money you can borrow.

What is the difference between a checking account and a savings account?

  1. A checking account is used for everyday transactions, while a savings account is used for long-term savings.

  2. A checking account is used for long-term savings, while a savings account is used for everyday transactions.

  3. A checking account and a savings account are the same thing.

  4. There is no difference between a checking account and a savings account.

Show answer
Correct Option: A
Explanation:

A checking account is a deposit account held at a bank or credit union that allows you to make deposits and withdrawals. Checking accounts are typically used for everyday transactions, such as paying bills, writing checks, and making purchases with a debit card. A savings account is a deposit account held at a bank or credit union that allows you to save money over time. Savings accounts typically offer higher interest rates than checking accounts, but they may have restrictions on how often you can withdraw money.

What is the purpose of a budget?

  1. To track income and expenses

  2. To save money

  3. To invest money

  4. To pay off debt

Show answer
Correct Option: A
Explanation:

A budget is a plan that outlines your income and expenses over a specific period of time, typically a month or a year. It helps you track your spending, identify areas where you can save money, and make informed financial decisions.

What is the difference between a debit card and a credit card?

  1. A debit card deducts money from your checking account immediately, while a credit card allows you to borrow money and pay it back later.

  2. A debit card allows you to borrow money and pay it back later, while a credit card deducts money from your checking account immediately.

  3. A debit card is a type of credit card.

  4. A credit card is a type of debit card.

Show answer
Correct Option: A
Explanation:

A debit card is linked to your checking account and deducts money from it immediately when you make a purchase. A credit card allows you to borrow money from the credit card company and pay it back later, typically with interest.

What is the rule of 72?

  1. It is a formula used to calculate the number of years it takes for an investment to double in value.

  2. It is a formula used to calculate the interest rate on a loan.

  3. It is a formula used to calculate the present value of a future cash flow.

  4. It is a formula used to calculate the future value of a present cash flow.

Show answer
Correct Option: A
Explanation:

The rule of 72 is a simple formula that can be used to estimate the number of years it takes for an investment to double in value. The formula is: Number of years = 72 / Annual interest rate.

- Hide questions
ADVERTISEMENT

Find more quizzes from top tags

general knowledge
3615 Quizzes
119858 Questions
 technology
307 Quizzes
36705 Questions
 sports
963 Quizzes
19148 Questions
 history
1187 Quizzes
13475 Questions
 physics
598 Quizzes
13441 Questions
 biology
1160 Quizzes
12174 Questions
 science & technology
551 Quizzes
11015 Questions
 chemistry
490 Quizzes
9892 Questions
 maths
518 Quizzes
9324 Questions
 softskills
0 Quizzes
7131 Questions