Financial Literacy Exam Flashcards

Questions and Answers

What is the next best choice you could have made, but did not make?

Opportunity Cost

What are some opportunity costs for the Robinsons?

Having less time to relax, less time to go out to dinner, and less money to spend.

What are the physical, intellectual, and creative talents of people called?

Human resources

What includes gifts of nature like water, forests, and natural gas?

Natural resources Signup and view all the answers

What are goods used to produce other goods and services, including tools and factories?

Capital resources Signup and view all the answers

Items producing something else are referred to as what?

Capital Signup and view all the answers

What is a medium exchange which allows you to get goods and services?

Money Signup and view all the answers

Why should you stay in school and earn your high school diploma instead of dropping out?

Higher income, job opportunities, getting a degree, and making family proud. Signup and view all the answers

What is the cost of dropping out of school?

Not getting an education, lower income, less job opportunities, inability to attend college. Signup and view all the answers

Why should you save money?

You won't be in debt. Signup and view all the answers

What is important because it gives a step-by-step process in what you like?

Decision-making Signup and view all the answers

What does the job application process include?

Looking for job openings, the letter of application, the resume, the application, the interview, and thank-you letter. Signup and view all the answers

What are the characteristics of entrepreneurs?

Their own business, hardworking, risk-taker, independent, confident. Signup and view all the answers

What are important elements for working for someone else?

Your success depends on everyone, pre-determined range for salary, responsibility in employee handbook. Signup and view all the answers

What are important elements for working for yourself?

Own hours, make your own rules, and own pay. Signup and view all the answers

What are three mandatory deductions from a paycheck?

State income tax, federal income tax, and social security tax. Signup and view all the answers

What is the set of intangible assets individuals bring to their work?

Human capital Signup and view all the answers

What is money a person receives in exchange for work or use of property?

Income Signup and view all the answers

Extra money given for good service is called what?

Tip Signup and view all the answers

What are examples of direct costs?

Tuition and books Signup and view all the answers

What is income that an individual could otherwise have earned during time spent in school?

Indirect costs Signup and view all the answers

What is money earned by an employee in one year called?

Annual income Signup and view all the answers

Earning a percentage of total sales is called what?

Commission Signup and view all the answers

Which level of formal education results in the highest income?

Professional degree Signup and view all the answers

What is a professional degree?

Lawyer, MD, etc. Signup and view all the answers

What tax helps pay for services provided by the federal government?

Federal Income Tax Signup and view all the answers

What tax helps pay for services provided by state government?

State income tax Signup and view all the answers

What tax helps pay for services provided by local government?

Local income tax Signup and view all the answers

What tax provides for old-age, survivors, and disability insurance?

FICA: Social Security tax Signup and view all the answers

What tax provides for hospital insurance for the elderly?

FICA: Medicare tax Signup and view all the answers

How many pay periods are in a bi-weekly pay schedule?

26 Signup and view all the answers

How many pay periods are in a weekly pay schedule?

52 Signup and view all the answers

How many pay periods are in a monthly pay schedule?

12 Signup and view all the answers

How many pay periods are in a semi-monthly pay schedule?

24 Signup and view all the answers

How many pay periods are in a semiannually pay schedule?

2 Signup and view all the answers

How many pay periods are in a bimonthly pay schedule?

6 Signup and view all the answers

What is the total amount of money a worker earns called?

Gross pay Signup and view all the answers

What is the amount left after all deductions are taken out of gross pay called?

Net pay Signup and view all the answers

What pays a beneficiary in the event that an employee dies?

Life insurance Signup and view all the answers

Study Notes

Financial Literacy Concepts

Opportunity Cost: The next best alternative not chosen in decision-making.
Human Resources: Refers to the physical, intellectual, and creative talents of individuals.
Natural Resources: Resources gifted by nature such as water, forests, natural gas, oil, and climate conditions.
Capital Resources: Goods utilized to produce other goods and services including tools, factories, and office buildings.
Capital: Not just money, but items or assets that produce something else.

Importance of Education

Reasons to Complete High School: Higher potential income, increased job opportunities, access to degrees, and pride for family.
Consequences of Dropping Out: Lack of education leading to lower income, fewer job prospects, and inability to attend college.

Financial Management

Saving Money: Critical to avoid debt and maintain financial stability.
Decision-Making: Important process providing a structured method to evaluate preferences and choices.

Job Application Process

Steps: Involves looking for job openings, writing application letters and resumes, completing applications, interviewing, and sending thank-you letters.

Entrepreneur Characteristics

Traits of successful entrepreneurs include owning their business, being hardworking, risk-taking, independent, and confident.

Employment Elements

Working for Others: Success is reliant on team efforts, salaries are limited within predetermined ranges, and responsibilities are defined by an employee handbook.
Working for Yourself: Benefits include setting your own hours, rules, and pay.

Payroll Deductions

Mandatory Deductions: State income tax, federal income tax, and social security tax are required from paychecks.

Income Types

Human Capital: Intangible assets individuals bring to work, such as knowledge, skills, talent, and health.
Income: Money received in exchange for work or property usage.
Tips: Additional money given for good service.
Direct Costs: Expenses like tuition and books incurred by students.
Indirect Costs: Potential income lost while attending school.

Earnings Terminology

Annual Income: Total money earned by an employee in a year.
Commission: Earnings based on a percentage of total sales.

Educational Impact on Income

Professional Degree: Level of education that typically results in the highest income, examples include lawyers or medical doctors.

Tax Types

Federal Income Tax: Funds services provided by the federal government like defense and human services.
State Income Tax: Supports state services like roads and public safety.
Local Income Tax: Funds local government services like schools and emergency services.
FICA Taxes: Include Social Security tax for old-age benefits and Medicare tax for hospital insurance for the elderly.

Pay Frequency

Bi-weekly: 26 pay periods per year.
Weekly: 52 pay periods per year.
Monthly: 12 pay periods per year.
Semi-monthly: 24 pay periods per year.
Semiannually: 2 pay periods per year.
Bimonthly: 6 pay periods per year.

Payroll Concepts

Gross Pay: Total earnings before deductions.
Net Pay: Amount remaining after all deductions have been applied.
Life Insurance: Benefit payable to a designated beneficiary in the event of an employee's death.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge on financial literacy concepts with these flashcards. Understand critical terms such as opportunity cost and human resources. Perfect for students preparing for exams in financial education.