Question

1. inflation affects a budget by:

a. increasing prices and reducing buying power
b. lowering prices
c. making expenses disappear
d. having no impact

1. which of the following could be an act of god that impacts a budget?

a. grocery shopping
b. buying coffee
c. giving to a charity
d. a tornado or flood

1. unemployment affects your budget by:

a. increasing savings
b. reducing income
c. eliminating taxes
d. increasing fixed expenses

1. what is a spending leak?

a. regular rent payments
b. utility bills
c. small, frequent, unnecessary purchases
d. insurance payments

1. which of the following could cause you to revise your budget?

a. getting married
b. a regular paycheck
c. stead work hours
d. all of the above

1. charitable giving is:

a. illegal in budgeting
b. paying taxes
c. a type of fixed expense
d. donating money

1. when budgeting for annual expenses, such as insurance, you should:

a. save a little each month toward the payment
b. borrow money when due
c. ignore until due
d. use a credit card

Explanation:

• Question 22: Inflation means a general rise in prices. When prices increase, the same amount of money can buy fewer goods and services, so buying power reduces.
• Question 23: An “act of God” in legal and budget - impact terms usually refers to natural disasters like tornadoes or floods which are beyond human control and can damage property (affecting repair budgets etc.). Grocery shopping, buying coffee, and charity are human - controlled activities.
• Question 24: Unemployment means a person is out of work. Without a job (in most cases), there is no income (or reduced income if on unemployment benefits which are usually less than a regular salary). Savings would likely decrease (not increase), taxes are still owed in many cases (unless specific tax - relief for unemployed, but not eliminated generally), and fixed expenses like rent/mortgage (if any) don't increase because of unemployment.
• Question 25: A spending leak is a small, frequent, unnecessary purchase. Rent, utility bills, and insurance are usually regular, necessary expenses (either for shelter, basic services, or protection).
• Question 26: Getting married can change income (if two incomes combine or one stops working), expenses (new shared expenses etc.). A regular paycheck and stead work hours are more about stability and not a reason to revise a budget (unless there are changes in pay amount etc., but the options imply status - quo).
• Question 27: Charitable giving is donating money to a cause. It is not illegal in budgeting. Paying taxes is a legal obligation (not charitable giving). It is not a fixed expense (amount can vary based on choice).
• Question 28: Saving a little each month for annual expenses (like insurance) is a good budgeting practice. Borrowing money (can lead to debt with interest), ignoring (can lead to inability to pay when due), and using a credit card (can also lead to debt if not paid off immediately) are not as good as saving over time.

Answer:

1. A. Increasing prices and reducing buying power
2. D. A tornado or flood
3. B. Reducing income
4. C. Small, frequent, unnecessary purchases
5. A. Getting married
6. D. Donating money
7. A. Save a little each month toward the payment