FBLA Economics and Personal Finance 3

Question 1

What is a 'W-4 form' used for in the United States?

Accepted Answer

Telling an employer how much federal tax to withhold from a paycheck

Answer

Reporting annual income to the IRS

Answer

Applying for Social Security benefits

Answer

Documenting business expenses

Question 2

What is the difference between a 'need' and a 'want' in personal finance?

Accepted Answer

Needs are essential for survival; wants improve comfort or pleasure

Answer

Needs are expensive; wants are cheap

Answer

Needs are bought on credit; wants are bought with cash

Answer

Needs are taxed; wants are not

Question 3

What is the 'Rule of 72' used for in personal finance?

Accepted Answer

Estimating how long it takes an investment to double

Answer

Calculating monthly loan payments

Answer

Determining the optimal savings rate

Answer

Computing annual percentage yield

Question 4

Which economic term describes a period of significant decline in economic activity lasting more than two quarters?

Accepted Answer

Recession

Answer

Inflation

Answer

Stagflation

Answer

Depression

Question 5

What is the purpose of an 'emergency fund' in personal finance?

Accepted Answer

To cover unexpected expenses without going into debt

Answer

To invest in high-risk, high-reward assets

Answer

To save for a planned major purchase

Answer

To pay income taxes quarterly

Question 6

Which term describes the total amount owed on a loan, separate from any interest?

Accepted Answer

Principal

Answer

Equity

Answer

Dividend

Answer

Amortization