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Questions and Answers of
Personal Financial Planning
1. How are prices set when using the cost-plus pricing strategy?
Explain how consumers’ buying strategies affect demand and prices in a market economy.
Describe three methods of setting prices in a market economy.
4. In the long run, what will you do if the price keeps rising? For example, will you find substitutes, stop using the product, or give up something else in order to be able to buy this product?
3. What effect has the price change had on your spending habits?Have you purchased less of that product? Have you purchased less of something else in order to keep buying that product?
2. How much is the price change (in dollars and cents)? What percentage increase or decrease is this amount?
1. Has the price gone up or down in the last year?
7. Explain what is meant by the time value of money?
6. How does inflation affect spending, saving, and investing decisions?
5. Explain how inflation and employment levels are related.
4. How does demand-pull inflation differ from cost-push inflation?
3. What is deflation?
2. Explain how disinflation, reflation, and hyperinflation differ.
1. What is inflation? How is it measured?
Explain how inflation affects spending, saving, and investing decisions.
Explain how inflation and employment levels are related.
Describe the causes of inflation.
Describe types of inflation.
Define inflation and explain how it is measured.
3. For how long can a person draw benefits?
2. How is the amount of the benefit determined?
1. What are the requirements for drawing unemployment benefits?
4. Would you like to do this kind of work? Why or why not?
3. What kinds of benefits currently are being offered to people in this profession?
2. What is the beginning pay level?
1. How many hours a week does a beginning-level employee work?
17. is the amount left after all costs are deducted from the income of a business.
16. A(n) is a required payment for the support of a government.
15. are taxes charged on the purchase of specific goods, such as motor fuel, cigarettes, and alcohol.
14. A benefits package, called a(n) , is where employees can pick and choose the benefit options they want to have.
13. A(n) is cash paid to stockholders of a corporation.
12. Money or benefits received from government without working for them when they are received are called .
11. Earnings paid when an employee works more than 40 hours in a 1-week period are called .
10. Earnings that are paid only when efforts result in a sale are called a(n) .
9. Days you are paid for even though you are not at work due to illness are called .
8. are forms of pay other than salary or wages, such as paid vacations or holidays.
7. Money received from customers, called a(n) , is based on quality of service.
6. The lowest pay rate allowed by law for each hour of work is called.
5. is time away from work for personal reasons.
4. Most companies have , such as Christmas, Veterans Day, or Memorial Day.
3. Money left over to spend or save after taxes are paid is called.
2. Money received from sources other than working in a job is called.
1. A(n) , or business owner, takes the risks of owning and operating a business.
What are the median annual earnings for this job (given in the Earnings section of the Web page)?
What training or qualifications are needed for this job?
What is the job outlook for this job?
What is the nature of the work this job involves?
11. List three optional deductions that might be taken from a worker’s pay.
10. List the parts of a good emergency plan.
9. List four factors related to workplace accidents and injuries.
8. To whom does workers’ compensation pay benefits?
7. Medicare taxes pay for what services?
6. What form must a new employee complete to provide a Social Security number and claim status as a citizen of the United States, a lawful permanent resident, or an alien who is authorized to work?
5. Give an example of a person who may qualify as a dependent and can be claimed as an exemption on your Form W-4.
4. What is an exemption as it relates to a Form W-4?
3. How is net pay calculated?
2. List three types of required deductions for taxes.
1. How does the amount of tax a person pays affect the person’s disposable income?
Complete a federal income tax return.
Complete a Form I-9 and a Form W-4.
List examples of optional deductions from pay.
Compute net pay.
List types of deductions required for taxes.
Explain how taxes affect disposable income.
10. Give one example of goods or services funded by taxes that benefit everyone.
9. How are government transfer payments funded?
8. Give one example of how paying taxes can directly benefit a person.
7. How can having citizens pay high taxes affect the economy?
6. What is the main direct cost of paying taxes for an individual?
5. What is an excise tax? Give one example of a product that has an excise tax.
4. From Figure 2-2.2, explain how Medicaid is different from Medicare.
3. What are government transfer payments? How are in-kind payments different from in-cash payments?
2. List three sources of private unearned income.
1. How is unearned income different from earned income?
Discuss the costs and benefits of paying taxes.
Explain the difference between in-kind and in-cash transfer payments.
List several types of government transfer payments.
List private sources of unearned income.
5. Gloria Adams is starting a new job. She will be paid $10.50 per hour.She plans to work 40 hours per week for 50 weeks a year. What will her gross yearly pay be? The value of the benefits Gloria
4. John O’Malley worked 40 regular hours and 10 overtime hours this week. His regular rate of pay is $8.50. For overtime pay, he earns 1.5 times his regular pay. What is John’s gross pay for this
3. Alice Jones worked 32 hours this week. She is paid $4.00 per hour.She also earned $250 in tips. What is Alice’s gross pay for this week?
2. Juan Perez is paid a monthly salary of $500. He is also paid a 10 percent commission on sales he makes. This month, Juan made$7,575 in sales. What is Juan’s gross salary for this month?
1. Kim Chin works for an hourly rate of $6.50. This week Kim worked 39 hours. What is Kim’s gross pay for this week?
12. How does a health flexible spending arrangement (FSA) benefit employees?
11. Describe two types of retirement plans offered by companies as a benefit.
10. Why are employees at many companies expected to help pay for the cost of health insurance?
9. Give two examples of perks that employees might want.
8. Why is educational reimbursement a valuable benefit for employees?
7. Give three examples of pay without work.
6. What are employee benefits? Give two examples. Why are employee benefits important to employees?
5. What are some advantages of self-employment? What are some disadvantages?
4. Give an example of a worker whose pay may include tips.
3. How is being paid a salary different from being paid hourly wages?
2. What is overtime pay? How much is overtime pay compared to regular pay?
1. What does the term minimum wage mean? Why do people often have to start a new job for minimum wage?
Describe employee benefits.
Discuss the advantages and disadvantages of self-employment.
List and discuss types of earned income, such as wages, salaries, tips, and commissions.
7. Open the Word file CH01 Goals from the data files. Follow the directions in the file to complete a chart about your values and goals.
6. Based on your values and goals, write a statement about your future life plans—career, family, travel, lifestyle—that you think will reflect your future choices and will shape your plans and
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