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Financial Literacy Exam Study Questions and Answers Latest Update
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What is not the best way to solve your financial problems? spending less than you earn accumulating debt creating a budget earning money - Answer-Accumulating debt Understanding and implementing sound money-management principles contributes to which of the following? financial success sta...

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  • October 12, 2024
  • 39
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • financial literacy exam study questions and answer
  • what is not the best way to solve your financial p

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Financial Literacy Exam Study
Questions and Answers Latest Update
What is not the best way to solve your financial problems?
spending less than you earn
accumulating debt
creating a budget
earning money - Answer-Accumulating debt

Understanding and implementing sound money-management principles contributes to
which of the following?
financial success
staying out of debt
distinguishing needs from wants
all of the above - Answer-all of the above

When is the best time to start learning about money management?
when you start earning money
when you are young
when you are in college
when you are in high school - Answer-when you are young

What is the best purpose for keeping track of your money?
to stay aware of what your parents earn
to make sure you do not spend more than you earn
to understand why people have to have jobs
to know when you need to start learning about financial literacy - Answer-To make sure
you do not spend more than you earn

What is the definition of money and Financial literacy - Answer-something used as a
way to pay for goods and services and to pay people for their work: a person's wealth
and financial literacy is knowledge about money.

What is principle - Answer-the amount you borrow anytime you borrow money

What is interest - Answer-Money added on to what you borrow

What is the approximate amount of debt that the average college graduate accrues?
$35,000
$13,000
$40,000
$29,000 - Answer-29,000

Good money management is important for which of the following reasons?

,learning how to make wise financial decisions
understanding that loans cost more money than the amount actually borrowed
being able to invest in a savings account
all of the above - Answer-all of the above

What is the best definition of financial literacy?
understanding the reasons for saving money
knowing about money
understanding how money is manufactured
knowing how to earn the most amount of money you can - Answer-knowing about
money

Which of the following financial groups is subject to financial consequences?
those with a high amount of debt
those who are unaware of how interest works
those who don't take the time to learn about money
all of the above - Answer-all of the above

Why is it important to have good credit - Answer-It is important for you to establish good
credit so that when you want to secure a loan on big-ticket items the creditors (people
you borrow the money from) will know that you have an excellent track record of paying
your bills and that their risk to loan their money to you will be low.

What is the average american household credit card debt - Answer-$15,611

What is the main purpose for a Chapter 7 bankruptcy?
to make sure your creditors know you have no money
to easily get out of debt
to start over with your finances
To liquidate your assets and pay your debts. - Answer-To liquidate your assets and pay
your debts.

How many people filed for chapter 13 bankruptcy in 2009?
Over 350,000
550,000
750,000
none of the above - Answer-over 350,000

A Chapter 7 bankruptcy involves which of the following?
You get a fresh start on your finances.
You get to keep all your assets.
Your bankruptcy is recorded on your credit report for twelve years.
none of the above - Answer-you get a fresh start on your finances

Why should you care if others are filing for bankruptcy?
It slows down the economy.

,Most people can't spend the money that they want to.
The economy improves.
none of the above - Answer-It slows down the economy

What is chapter 7 bankruptcy? - Answer-Liquidates all your assets and you get a fresh
start on your finances. It stays on your credit report for 10 years

What is chapter 13 bankruptcy - Answer-More conservative where you go to your
creditors and work out a solution to pay off your debt in three to five years. In 2009, over
350,000 Americans filed for chapter 13. Stays on your credit report for 7 years.

What is chapter 11 bankruptcy - Answer-you loose your business or livelihood

Going into debt can be caused by which of the following?
spending more money than you make
buying big ticket items without planning on how to pay for them
taking money from your savings to pay for your grocery items
all of the above - Answer-all of the above

Which of the following contributes to making sound financial decisions?
understanding financial literacy
wondering how to manage money
making purchases using credit
filing for bankruptcy - Answer-understanding financial literacy

Which of the following is the best time to plan for retirement?
as soon as possible
when you are in your forties or fifties
when you graduate from college
when you are in your twenties or thirties - Answer-as soon as possible

Who is in charge of your financial future?
your credit union
your parent(s)
your bank
you - Answer-you

Which of the following is the best key component of financial literacy?
being knowledgeable about credit and debt
trying to earn more money to alleviate financial concerns
having the financial freedom to buy what you want, when you want it
knowing how much interest is charged on a loan - Answer-being knowledgeable about
credit and debt

When is the best time to start learning money management principles?
in college

, in high school
once you are married so you and your spouse can plan together
throughout your lifetime, to be ready to implement when you have money to manage -
Answer-throughout your lifetime, to be ready to implement when you have money to
manage

When is the best time to apply for a credit card?
when your parents can make your payments
when you are eighteen years old
when you need the money
when you have enough income to pay your debts - Answer-when you have enough
income to pay your debts

People in the eighteen-to-twenty-four age bracket spend nearly what percentage of their
monthly income just on debt repayment?
10%
30%
25%
20% - Answer-30%

A chapter 11 bankruptcy is filed by which of the following?
families
individuals
businesses
none of the above - Answer-Businesses

Which of the following is the best reason for writing down your goals?
so you can constantly review and revise them in order to make them a reality
to make sure you can keep them the way they are and never change them
so you will have enough money for retirement
so others can see what your goals are in order to help you - Answer-so you can
constantly review and revise them in order to make them a reality

What is not the best way to set financial goals?
Talk your goals over with others to make sure you are setting the correct goals.
Set one goal at a time so you can focus on that goal.
Start setting financial goals when you are young.
Put your goals in writing so you can revisit them often. - Answer-Set one goal at a time
so you can focus on that goal.

Setting goals helps with which of the following?
minimizing wealth
minimizing impulse buying
maximizing spending
maximizing debt - Answer-minimizing impulse buying

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