Question 1(1 point) One reason people should save money is to create an "emergency fund."Which of these is an example of an unexpected expense you might use an emergency fund to pay for? ) a Your car broke down and you need it repaired to travel to work b You want to go on a luxury vacation c You want to go shopping for new shoes Question 2(1 point) Lydia sells lemonade and earns 20 per week. She spends money throughout the month on things like snacks and candy. Somehow, she ends every month with only a few dollars left. Which behavior change is MOST likely to help Lydia save more money? Spend less selling lemonade and more time saving money b Ask her parents for an allowance and try to save that money instead c Before she spends, set aside 50 to save out of every 20 she earns d Spend money on bigger lemons so she can make more lemonade Question 3(1 point) "Pay yourself first" means to put money in your savings account AFTER you pay your rent and your bills. OTrue OFalse Question 4(1 point) Which type of goal should be accomplished in 3 years or more? Short-term goal b Long-term goal c Life goal d Middle-term goal Question 5(1 point) What does it mean for an account to be FDIC insured? The money placed in that account is insured by the federal government. b The account is scheduled to be seized by the federal government. c The federal government is watching this account. d You need to pay money to insure this account. Question 6(1 point) What type of account will allow a maximum of 6 withdrawls per year? a Savings b Checking c Government Bond d Stock Investment

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Question 1(1 point) One reason people should save money is to create an "emergency fund."Which of these is an example of an unexpected expense you might use an emergency fund to pay for? ) a Your car broke down and you need it repaired to travel to work b You want to go on a luxury vacation c You want to go shopping for new shoes Question 2(1 point) Lydia sells lemonade and earns 20 per week. She spends money throughout the month on things like snacks and candy. Somehow, she ends every month with only a few dollars left. Which behavior change is MOST likely to help Lydia save more money? Spend less selling lemonade and more time saving money b Ask her parents for an allowance and try to save that money instead c Before she spends, set aside 50 to save out of every 20 she earns d Spend money on bigger lemons so she can make more lemonade Question 3(1 point) "Pay yourself first" means to put money in your savings account AFTER you pay your rent and your bills. OTrue OFalse Question 4(1 point) Which type of goal should be accomplished in 3 years or more? Short-term goal b Long-term goal c Life goal d Middle-term goal Question 5(1 point) What does it mean for an account to be FDIC insured? The money placed in that account is insured by the federal government. b The account is scheduled to be seized by the federal government. c The federal government is watching this account. d You need to pay money to insure this account. Question 6(1 point) What type of account will allow a maximum of 6 withdrawls per year? a Savings b Checking c Government Bond d Stock Investment

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1. a 2. c 3. False 4. b 5. a 6. a

Answer 2

## Step1:The first question is about the concept of an "emergency fund". An emergency fund is a stash of money set aside to cover the financial surprises life throws your way. These unexpected events can be stressful and costly. Here, the unexpected expense that requires an emergency fund is your car breaking down and needing repair to travel to work.## Step2:The second question is about Lydia's financial habits and how she can save more money. The best behavior change for Lydia to save more money would be to set aside a portion of her earnings before she spends. This is a common financial advice known as "pay yourself first".## Step3:The third question is a true or false question about the meaning of "pay yourself first". The statement is false. "Pay yourself first" means to put money in your savings account BEFORE you pay your rent and your bills.## Step4:The fourth question is about financial goals. A long-term goal is something you want to do in the future. Long-term goals require time and planning. They are not something you can do this week or even this year. Long-term goals are usually at least several years away. Hence, a goal that should be accomplished in 3 years or more is a long-term goal.## Step5:The fifth question is about FDIC insurance. The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. FDIC insurance is backed by the full faith and credit of the United States government. Hence, if an account is FDIC insured, it means that the money placed in that account is insured by the federal government.## Step6:The sixth question is about the type of account that allows a maximum of 6 withdrawals per year. This refers to a savings account. A savings account is a deposit account held at a financial institution that provides principal security and a modest interest rate. Depending on the specific type of savings account, the number of withdrawals or transfers may be limited.

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