Question

1. disposable income is:

a. gross income before taxes
b. credit card debt
c. money you throw away on spending leaks
d. money you can spend or save after deductions

1. discretionary income is:

a. fixed expenses
b. gross income
c. income before taxes
d. money left after paying all bills and saving

1. budgets should be adjusted when:

a. you reach or change financial goals
b. your income or expenses change
c. you add new financial responsibilities
d. all of the above

1. an example of a new fixed expense might be:

a. clothing purchase
b. movie ticket
c. grocery bill
d. car loan

1. opportunity cost means:

a. a savings plan
b. the total amount earned before taxes
c. the cost of an opportunity program
d. the benefit you give up when making a choicea savings plan

1. needs are different from wants because:

a. needs are not factored into a budget
b. wants are required for survival
c. both cost the same
d. needs are necessary for living

1. what does limited resources mean in budgeting?

a. income is unlimited
b. you must make choices with what you have
c. expenses are fixed
d. inflation does not affect it

Explanation:

• Question 15: Disposable income is the amount of money left after deductions (such as taxes). It is available for spending or saving.
• Question 16: Discretionary income is what remains after paying all bills (including fixed and variable expenses) and saving.
• Question 17: Budgets need adjustment when financial goals change (A), income/expenses change (B), or new financial responsibilities are added (C). So all options are valid.
• Question 18: A car loan is a fixed expense as the payment amount is usually set (e.g., a monthly payment of a specific dollar amount). Clothing, movie tickets, and grocery bills can vary.
• Question 19: Opportunity cost is the benefit foregone when making a choice (e.g., choosing to spend money on a concert means giving up the benefit of saving that money).
• Question 20: Needs (like food, shelter) are necessary for living, while wants (like a luxury item) are not.
• Question 21: Limited resources mean you have to make choices (e.g., with a fixed income, you decide between rent and dining out).

Answer:

1. D. Money you can spend or save after deductions
2. D. Money left after paying all bills and saving
3. D. All of the above
4. D. Car loan
5. D. The benefit you give up when making a choice
6. D. Needs are necessary for living
7. B. You must make choices with what you have