Personal Financial Lit – Flashcards
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Which of these statements about pet ownership is not correct?
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After the first year, the cost of owning a pet is minimal
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Which of these is the best description of variable life insurance?
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Purchased for the secondary purpose of investing
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Which of these is not a financial factor in family planning?
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Tax credits
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What is the approximate cost of raising a child for eighteen years?
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$200,000 - $500,000
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Which of these is not an effect of daily exercise?
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Strong teeth
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Which of these is not a result of an unplanned pregnancy?
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Increased salary
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What was the average cost of a basic adult funeral in 2010?
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$7,000 - $10,000
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Which of these forms should be adjusted to change tax withholdings?
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W-4
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Which event might cause people to buy more of a product?
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A lowered price
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Which of these terms is defined as an increase or decrease in purchasing power brought on by changes in price?
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Income effect
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What do the economic systems of other countries have in common with the economic system of the United States?
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They face the same basic problems
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If demand increases, what economic explanation occurs?
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Supply increases and price increases
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Which axis of a graph will always run horizontally left to right across the page?
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x
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All economic systems are concerned with which of these same problems?
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What, how, how much, and for whom to produce
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If supply exceeds demand for a product, what economic explanation occurs?
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Demand decreases and price will decrease
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What is the amount of a good or service that a consumer is willing to buy called?
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Demand
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The interaction of the producer and the consumer establishes a price.
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True
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In which direction does the demand curve on a graph slant?
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Downward left to right
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Which of these terms is used to describe the decreasing value or wearing out of a good?
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Depreciation
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Which of these graphs would best show the percentage of a company that is owned equally by each of 5 investors?
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Pie graph
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When prices are _______, consumers buy _______.
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Raised/less
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Freedom of religion is guaranteed by the U.S. Constitution in which amendment?
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First
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Upon obtaining a driver's license, an individual may drive anywhere or anytime, as long as he or she remains within the confines of the law.
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True
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Freedom of the press is guaranteed by the U.S. Constitution in which amendment?
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First
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For almost every right that a citizen has, _______.
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There is a corresponding responsibility
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Which of these most nearly defines Caveat Emptor?
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Let the buyer beware
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Government acts to preserve competition through which of these?
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Antitrust laws
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Caveat Emptor means that the producer will be protected against fraudulent business practices but must protect the consumer.
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False
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If one person purchases a computer software program, it is legal for other people to borrow the software and install it on their computer, even though there is a warning against it on the package.
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False
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When an individual or company designs a new product, they apply to which agency for the right to the design?
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U.S. Patent Office
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What type of school might routinely offer hands-on training?
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Vocational school
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Which of these is not a reason people who receive a college education tend to live longer?
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Longer work hours
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Which of these forms of financial assistance have to be repaid?
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Stafford loans
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Which of these types of education would probably cost the least?
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Certification
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Where can students obtain a student loan?
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From various lending institutions
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Which of these are academic competitiveness grants offered by the federal government based on financial need?
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Pell grants
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Which of these statements is usually true of business schools?
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They are accredited by state higher education boards
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Which statement is true of people who have a higher level of education?
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They have fewer periods of unemployment in their lifetimes
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Who sponsors Stafford loans?
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The federal government
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Which of these students would not benefit from online courses?
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Student who enjoy interacting with their professors and their classmates
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What empowers a person to overcome obstacles that are in the way of reaching goals?
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Discipline
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Which of these is affected by new technology?
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Money, time, and communication
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David's long-term goal is to complete a four-year college program in two years. Which of these is the best plan for David to reach his goal?
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David should plan to take a full year semester schedule and summer classes
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Which of these is not a useful component to include when creating a time schedule?
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Be spontaneous
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Which of these is not a financial goal?
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Studying for an exam
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Which of these statements is false? A person can earn more diplomas and certifications online A person cannot receive a doctorate degree online A person can complete an online course through wireless technology such as a cell phone Online learning is also called distance learning
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A person cannot receive a doctorate degree online
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Which of these is a physical goal?
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Going to the gym three times a week
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What type of results develop from setting attainable goals within a realistic time frame?
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Positive
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What is the first step of the time management process?
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Recognizing your goals
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Which of these statements is false?
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Goals should always be academic
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Which of the following is a certificate of ownership in a corporation?
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Stock
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Which of these business organizations is treated by law as if it were an individual person?
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Corporation
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Which of these is another term for a free enterprise system?
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Market system
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Which term refers to the fluctuations of growth and decline in an economy?
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Business cycle
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Which of the following is an element of a corporate charter?
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A license granted by the state that gives the business the right to operate
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Which term refers to the predetermined amount an individual must pay for the use of borrowed money?
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Interest
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Which of these is a major advantage of a corporation?
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Limited liability
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Which term refers to the money that remains after all the costs of production have been paid?
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Profit
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Which term refers to a business that is owned and controlled by one person?
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Sole proprietorship
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Which of the following statements is true? A partnership issues stock to be sold on the open market A partner in a partnership does not have to give up his/her personal assets to pay the debts of the partnership The success of a partnership depends on the health and energy of one person A partnership allows the partners to perform duties in which their skills and talents can best be used
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A partnership allows the partners to perform duties in which their skills and talents can best be used
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Which of these is considered a work schedule benefit?
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Sick leave
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Which term refers to benefits that can be accepted or declined by the employee?
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Elective
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Which of these statements is not true? An employer uses benefits to make a job more attractive to an employee All employers must offer some sort of benefits package Benefits can both save and earn a lot of money for an employee The value of benefits can be as much as 40% of a person's wage
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All employers must offer some sort of benefits package
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What are employee benefits?
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Benefits that are used to make a job offer more attractive
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Both the employer and the employee contribute to which of these benefits?
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Defined contribution plan
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Which of these is the best description of a defined benefits plan?
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The set amount an employee will receive at retirement
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A defined benefit plan is part of which employee benefits?
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Retirement
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Which benefits costs are usually shared by the employee and employer?
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Healthcare
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Which of these is the best description of a defined contribution plan?
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The money an employer puts into a retirement fund for each employee
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Which of these individuals is most likely to have the best benefits?
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An employee who has worked full-time at a large company for many years
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Which of these is not included on an employee's pay stub?
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Benefits
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How many paychecks does a person who is paid biweekly receive each year?
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26
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Money gained from stocks and bonds is an example of which of these?
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Unearned income
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Managers for which type of job use a percentage to figure the wages of an employee?
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Commission employees
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Which of these statements does not describe employees who work contract labor?
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They receive insurance and savings benefits
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Which of these is the best description of gross pay?
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The amount of money a worker receives without any deductions
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Which of these employees earn a set annual income regardless of the hours or projects they complete?
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Salaried employees
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Which of these employees are paid for the number of hours worked during a specified period?
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Hourly employees
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Calc
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Calc
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Calc2
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Calc2
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What is the best definition of taxable income?
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The portion of a person's income that is eligible for taxation
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What is the best definition of gross income?
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the amount of money you actually earn during a given pay period
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What is the minimum percentage of income that will be withheld from any employee's paycheck?
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7.65%
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What is another name for withholdings?
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Payroll deductions
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What is the best definition of a progressive tax system?
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A tax system in which people with high incomes pay a higher percentage of tax than people with low incomes.
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What is another name for take-home pay?
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Net income
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Which type of worker is the Earned Income Tax Credit designed to benefit?
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Low income working individuals and families
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What is the best definition of unearned income?
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money that is generated as a result of investments, properties, stocks and bonds, etc.
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What percentage of gross income is withheld as an employee's contribution to the Social Security system?
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6.2%
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What does a current contribution to Medicare in the form of employee Medicare taxes make free to eligible employees when they retire?
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Part A of Medicare that is hospital insurance
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Which of these statements is false? All employers offer various benefits to all of their employees. The dollar value of employee benefits can equal as much as 30 to 40% of one's salary. Total compensation refers to the combined value of one's wages and benefits.
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All employers offer various benefits to all of their employees
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Which of these statements about work schedule benefits is false? Sometimes the longer an employee has worked for a company, the more paid days of leave are granted during the year. Some employers allow employees to save up vacation days from year to year while others have a "use it or lose it" policy. Sick leave is typically given to employees on a "use it or lose it" basis.
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Sick leave is typically given to employees on a "use it or lose it" basis
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What are the components of a total compensation package?
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Salary and all employee benefits
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What are the four major types of employee benefits?
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healthcare, retirement, life and disability, and work schedule (vacation, sick leave, holidays)
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What is the main difference between a defined benefit plan and a defined contribution plan?
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A defined benefit plan provides a set amount of benefit to the employee at the time of retirement, and a defined contribution plan specifies the amount of money an employer contributes to a retirement fund for each individual employee.
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This chart shows the total average monthly cost of medical insurance benefits for employees working in the private sector in March 2006. For single coverage, the cost is $322.77, and for family coverage, it is $889.26. If an employee makes $10 per hour (after withholdings) and has to pay the full cost of single coverage medical insurance, about how many hours will he or she have to work each month simply to pay for the cost of the medical insurance?
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32.2 hours
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Which of these statements about life insurance benefits is false?
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Employers normally require employees to pay a large portion of the cost of the life insurance benefit.
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Which of these statements about medical plans is false?
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All medical plans are the same
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On average, what type of worker is most likely to have the most employee benefits?
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an employee in a high-paying job working full-time at a large company
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Which of these statements is true?
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It is risky to have your entire retirement account dependent on the success of one company.
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Which of these statements is true? Graduation is a transition to adulthood which changes the goals and lives of every individual. Graduation is a transition to adulthood which changes one's desire for material goods. Graduation means freedom from responsibility.
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Graduation is a transition to adulthood which changes the goals and lives of every individual
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Which of these is a reason why people seek work?
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All of the answers are correct
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According to the theory of psychosocial development, which of these questions is a major challenge of adolescence?
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Who am I?
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What is proper procedure after being granted an interview?
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Send a thank you note
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According to the DOL, how should a person plan time properly when seeking employment?
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Wake up early to start looking for work
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Which of these is a benefit of having a temporary job?
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The experience gained will help you decide whether or not you would like to work permanently in that field.
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Which famous psychologist developed a theory of psychosocial development?
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Erik Erikson
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Which of these statements is true? After submitting an application to a potential employer, you will always get the job. After submitting an application to a potential employer, you may never receive a response. After submitting an application to a potential employer, you will always receive a response. After submitting an application to a potential employer, you will always receive a response
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After submitting an application to a potential employer, you may never receive a response
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What is a good?
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It is any physical object that can be purchased
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What is a need?
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It is something a person must have in order to survive such as food, shelter, or water
