Question

personal finance basics
basic key terms
lesson assessment
directions: read each question carefully before selecting your answer. for true/false questions, circle \true\ if the statement is correct and \false\ if it is not. for multiple - choice questions, choose the key term that correctly completes each sentence and circle the corresponding letter
true / false questions

1. income is the amount of money you earn. true or false
2. a budget is the amount of money paid or earned for the use of money. true or false
3. your credit score is a numerical representation of your creditworthiness. true or false
4. debt is money borrowed that must be repaid, often with interest. true or false
5. investing is the money you spend on goods or services. true or false

multiple choice questions

1. cameron deposits a portion of his income into a ( ) each month

a) expenses
b) income
c) savings account
d) debt

1. each month, sarah creates a ( ) to outline her income and expenses.

a) budget
b) debt
c) savings account
d) investing

Explanation:

1. Income is indeed the money earned, so it's true.
2. A budget is a plan for income and expenses, not money paid or earned for the use of money (that's interest), so it's false.
3. A credit - score represents creditworthiness numerically, so it's true.
4. Debt is borrowed money to be repaid, often with interest, so it's true.
5. Investing is not spending on goods or services (that's consumption), so it's false.
6. People deposit income into a savings account, so c is correct.
7. A budget outlines income and expenses, so a is correct.

Answer:

1. TRUE
2. FALSE
3. TRUE
4. TRUE
5. FALSE
6. c) savings account
7. a) budget