Name: Block: Date: MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

Transcription

1 Name: Block: Date: Personal Finance: Test on Chapter 6 & 7 1 pts each 77 Total points 1) The total amount of money a worker earns in a pay period is his or her. A) capital gain B) gross pay C) net pay D) adjusted gross income 1) 2) The total amount of money a worker takes home in a pay period is his or her. A) gross pay B) capital gain C) net pay D) adjusted gross income 2) 3) Federal income taxes, state income taxes, and Social Security withholdings are all. A) payroll taxes B) capital taxes C) real estate taxes D) sales taxes 3) 4) Which of the following would LEAST likely be included on an employee's pay stub? A) the employee's gross pay for the pay period B) the employee's net earnings for the year C) the amount withheld from the employee's gross pay for FICA and other payroll taxes D) the employee's total tax owed for the year 4) 5) The is the government body that enforces federal tax laws and collects the taxes. A) Commerce Department B) United States Congress C) Bureau of Labor D) Internal Revenue Service 5) 6) You would use a 1040 or a 1040EZ to. A) file a tax return B) receive an estimated tax payment C)pay local taxes D) pay sales taxes 7) Taxes are figured based on your earnings during which of the following time periods? A) each quarter B) the calendar year C) each month D) every two years 6) 7) 8) The deadline for filing your federal tax return each year is. A) April 15th B) March 15th C) January 1st D) December 15th 8) 9) Itemized personal deductions are the reason for the difference between a worker's gross pay and net pay. 9) 10) The federal government does not impose a sales tax. 10) 11) Real estate taxes are relatively constant from state to state and even city to city. 11) 12) Workers who earn an income below a certain amount are not required to file a federal tax return. 12) 1

2 MATCHING. Choose the item in column 2 that best matches each item in column 1. Match each description to its corresponding term. 13) tax paid as part of the purchase price of an item 14) the total amount of money an individual takes home during a pay period 15) money for the government withheld from an individual's paycheck 16) any money collected by a government from its citizens for the purpose of operating the government 17) the total amount of money an individual earns in a pay period A) gross pay B) tax C)real estate tax D) tax return E) payroll tax F) sales tax G) net pay 13) 14) 15) 16) 17) 18) an annual report of all information related to your income taxes 18) 19) a tax paid to the government based on the value of the property an individual owns 19) 20) are also known as FICA. A) Local taxes B) Real estate taxes C) Medicare and Social Security taxes D) Federal income taxes 20) 21) An employer matches employees' contributions to and sends the total amount to the government. A) state income taxes B) local taxes C) federal income taxes D) FICA taxes 21) 22) In general, your applicable tax rate and rules differ depending on which you choose. A) filing status B) itemized deductions C) capital gains D) standard deductions 22) 23) Shortly after the end of the year, you will receive a form summarizing all of your relevant income and tax withholding information from each employer you worked for during the year. A) 1040EZ B) W2 C) 1040 D) 1099-MISC 23) 2

3 24) If you are claimed as a dependent on a parent's or guardian's tax return, then you will not be required to file your own tax return. 24) 25) In some cases, it may be financially advantageous for a married couple to file separate tax returns. 25) 26) Your adjusted gross income will always be greater than or equal to your total income. 26) 27) Which of the following is generally the most expensive way for an individual to obtain health insurance? A) signing up for Medicare Part B B) signing up for Medicaid C) enrolling in employer-provided health care coverage D) purchasing a policy from a private company 27) 28) Hospital insurance at no cost to the recipient is provided through to individuals who are 65 or older or who are disabled. A) Medicaid B) Social Security C)Medicare part A D) Medicare part B 29) is a government-sponsored program designed to provide health insurance for low-income individuals and needy families with dependent children. A) Medicare part B B) Medicaid C) Social Security D) Medicare part A 28) 29) 30) Which of the following statements about health care costs and insurance in America is NOT true? A) Health care spending is expected to begin to decline by B) More than 15% of the American population has no health insurance. C) Health-care costs are a factor in about 50% of all bankruptcies. D) American health-care spending in 2005 averaged almost $7,000 per person. 30) 31) One major health problem could quickly eliminate all of an uninsured person's net worth. 31) 32) Concerns over health-care costs and health insurance are likely to continue to increase in the coming years. 32) MATCHING. Choose the item in column 2 that best matches each item in column 1. Match each description and definition to its corresponding term. 33) a regular payment in return for A) co-insurance insurance coverage B) premium 33) 3

4 34) Members of a(n) plan, though they have different health risks, have equal access to health care and all pay the same amount for coverage. A) indemnity B) managed care C) family D) group 34) 35) Policies with very high and comparatively low trade lower insurance costs for a higher risk of out-of-pocket expenses. A) co-pays; indemnities B) indemnities; co-pays C) deductibles; premiums D) premiums; deductibles 35) 36) Another name for co-insurance is. A) co-deduction B) co-pay C) co-premium D) co-coverage 36) 37) Under her health insurance plan, Marie pays 15% of each doctor's visit and 20% of all prescription drug purchases. This is an example of. A) deductibles B) an indemnity plan C) a premium D) co-insurance 37) 38) Under his health insurance policy, Manuel pays for the first $1,500 of his medical costs each year and the insurance company pays for any costs above $1,500. This is an example of. A) a deductible B) co-insurance C) an indemnity plan D) a premium 38) 39) Any health care insurance plan will allow you to see the doctor of your choice. 39) 40) Under some health insurance plans, children who finish high school but do not enroll in college may no longer be covered by their parents' insurance. 40) 41) The higher your deductible is, the lower your cost for insurance will be. 41) 42) Some insurance policies allow the the insurance company to cancel the policy at any time, even if an individual has paid his or her premiums on time. 42) 43) Your automobile insurance may pay a portion of your medical costs associated with a vehicle accident. 43) 4

5 MATCHING. Choose the item in column 2 that best matches each item in column 1. Match each description and definition to its corresponding term. 44) an insurance plan that allows A) managed care plan participants to seek health care from any qualified medical provider B) deductible 44) 45) the amount of money an individual pays for health care before his or her insurance begins paying claims 46) an insurance plan that limits participants to a specific list of providers 47) a health condition an individual had before an insurance policy was granted C) co-insurance D) premium E) group plan F) indemnity plan G) pre-existing condition 45) 46) 47) 48) an insurance plan that covers a large number of individuals, spreading one person's high risk across the entire pool of members 48) 49) the share of costs for covered services an insured person is required to pay himself or herself 49) Identify whether each description matches a PPO or an HMO. 50) typically more expensive A) PPO 50) 51) specialist visits approved and arranged by a primary care physician B) HMO 51) 52) lower premiums 53) more approved doctors to choose from 52) 53) 54) The person who receives the payment from a life insurance policy is called the. A) beneficiary B) insured C) insurer D) policyholder 54) 55) People buy life insurance from. A) a company B) their local government C) the federal government D) their health care provider 55) 5

6 56) Which of the following is the most common reason for buying life insurance? A) to take advantage of tax rebates B) to build up investments for retirement C)to provide health care coverage in case of an accident D) to provide financial support for those who depend on you in the event of your death 56) 57) Which of the following is also known as permanent insurance? A) term insurance B) premium insurance C) universal life insurance D) whole life insurance 57) 58) In the past decade, most Americans have obtained health insurance through. A) HIPAA B) their employers C) COBRA D) Medicare and Medicaid 58) 59) Disability insurance, dental insurance, life insurance, and vision insurance are all common benefits. A) Medicare B) universal insurance C) employer-provided D) Medicaid 59) 60) Which of the following types of insurance would an employer be LEAST likely to offer to employees? A) term life insurance B) disability insurance C) flood insurance D) supplemental health insurance designed to cover a specific disease 60) 61) The trend in recent years suggests that in comparison to present employees, future employees will be able to obtain insurance coverage from their employers. A) less likely B) not C) more likely D) just as likely 61) 62) Health insurance provides a payment to a specific person or persons when the policyholder dies. 62) 63) It is easier to get a life insurance policy when you are young and healthy than when you are older and more likely to experience a serious illness. 63) 64) Each year fewer and fewer employers are offering health benefits to their employees. 64) 65) When you purchase insurance independently, your health, life, and disability insurance costs vary according to your age and health history. 65) 66) As part of an employer's group plan, you will pay no more for health care coverage than any other employee of that company receiving the same level of coverage. 66) 67) Medicare and Medicaid make sure that people switching jobs have a way to maintain health insurance coverage during and after the switch. 67) 6

7 MATCHING. Choose the item in column 2 that best matches each item in column 1. Identify whether each of the following describes HIPAA or COBRA. 68) ensures that workers can continue A) COBRA their health insurance coverage even if they have switched jobs B) HIPAA 69) allows you to continue health insurance coverage for up to 18 months after your employment is ended 68) 69) 70) A building's owner is responsible for your personal possessions inside the rental property. 70) 71) It is wise to over insure your home. 71) 72) Generally, people insure the contents of their house for at least half the value of the building. 72) SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 73) Monique went to the emergency room for stitches after she accidentally cut her hand while preparing a meal. Monique's insurance policy has a $1,000 deductible and a 10% co-pay after the deductible, and Monique has already spent $200 on approved health care costs this year. Monique's emergency room bill was $1,350. How much of the bill must Monique pay on her own? 73) 74) Willhem has a $10 co-pay each time he or a family member visits an approved physician, a $20 co-pay for each time he or a family member visits a specialist, and a 10% co-pay on all prescription drugs. Willhem and his family members visited their primary physician 8 times last year and visited specialists 4 times. They also purchased prescription drugs worth a total of $950. How much did Willhem have to pay for his own and his family's health care last year? 74) ESSAY. Write your answer in the space provided or on a separate sheet of paper. 75) Name the three things a homeowner's insurance policy typically covers property owners' losses from