Personal Finance Study Questions

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Section 2 Study Questions (9.0 points) Answer each question fully. Complete sentences are not necessary. Lesson 1 (3.0 points) 1. What is renting? (0.5 points) An agreement where a payment is made for the temporary use of a good, service or property owned by another individual or company. 2. What is a financial plan? (1.0 points) Financial Planning is an ongoing process to help you make sensible decisions about spending money that can help you achieve your goals in life. 3. What is income? (0.5 points) Money that is earned from work, investments, business, etc. 4. What is a projection? (0.5 points) Process of moving forward in time through estimates based on certain assumptions or past trends. 5. What is a will? (0.5 points) A will is a legal document that lets you decide who should receive which of your assets after your death. It also allows you to name guardians for any dependent children. Lesson 2 (3.0 points) 1. What is a tax? (0.5 points) A fee charged by a government on a product, income, or activity. 2. What is the Internal Revenue Service? (0.5 points) The U.S. government agency responsible for tax collection and tax law enforcement. 3. What is the capital gains tax? (0.5 points) It is the difference between what you paid for an investment and what you received when you sold that investment. 4. Give at least two examples of types of state taxes. (1.0 points) Sales taxes and Property taxes 5. What is a pay stub? (0.5 points) A sort of receipt of your paycheck. Normally attached below your check. Proves you were paid, and on what day. Lesson 3 (3.0 points) 1. What is financial responsibility? (0.5 points) Being responsible with money 2. Give at least two examples of utilities. (1.0 points) Electricity and water 3. What are features? (0.5 points) Anything pleasing or good about a thing 4. What are benefits? (0.5 points)

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