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Health: The Basics, 12e (Donatelle)
Chapter 1a Focus On: Improving Your Financial Health
1) Lower socioeconomic status is associated with
A) lower rates of smoking.
B) lower rates of asthma.
C) higher rates of smoking.
D) higher-than–average longevity.
Skill: Understanding
Section: The Link Between Health and Wealth
Learning Outcome: 1a.1
2) Relative deprivation is
A) the inability of lower-income groups to sustain the same lifestyle as higher–income groups in
the same community.
B) discrimination against lower-income people by higher-income people within the same
community.
C) the cluster of physical and emotional manifestations—such as higher rates of type 2 diabetes
and alcohol abuse—seen in lower-income groups in a community.
D) a sense of low self–esteem experienced by people living in poverty.
Skill: Remembering
Section: The Link Between Health and Wealth
Learning Outcome: 1a.1
3) Which of the following countries BEST demonstrates the link between high GDP per capita
and long life expectancy?
A) Brazil
B) Japan
C) Russia
D) Mexico
Skill: Analyzing
Section: The Link Between Health and Wealth
Learning Outcome: 1a.1
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4) Which of the following statements about financial concerns in college is TRUE?
A) Nearly one-fourth of college students report that they worry often or very often about meeting
regular expenses.
B) Only one-third of first-time college students complete their degree in 6 to 8 years.
C) Almost one-half of college students report that financial aid is a major factor in determining
which college they attend.
D) The average cost of tuition and fees at public four-year colleges nearly doubled between 2010
and 2015.
Skill: Remembering
Section: Financial Struggles in College
Learning Outcome: 1a.2
5) On average, about what percentage of college costs are paid for with borrowed funds?
A) 12%
B) 22%
C) 32%
D) 42%
Skill: Remembering
Section: Financial Struggles in College
Learning Outcome: 1a.2
6) A common reason for students to drop out of college is
A) that they have been offered a high-paying job.
B) stress-related illness.
C) concern about growing debt.
D) parental pressure to enter the workforce.
Skill: Remembering
Section: Financial Struggles in College
Learning Outcome: 1a.2
7) A principal reason for making a budget is to
A) earn more money.
B) pay bills on time.
C) qualify for a bank loan.
D) know how much you can afford to spend.
Skill: Understanding
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
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8) All of the following qualify as budget expenses EXCEPT
A) rent payments.
B) utility payments.
C) insurance premiums.
D) stipends from relatives.
Skill: Understanding
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
9) When you earn more than you spend, you have a budget
A) surplus.
B) deficit.
C) shortfall.
D) liability.
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
10) Discretionary spending is the opposite of ________ spending.
A) excess
B) necessary
C) entitlement
D) recreational
Skill: Analyzing
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
11) Which of the following is a good way to cut spending and keep to your budget?
A) Drive more rather than taking the bus.
B) Eat out rather than cooking at home.
C) Use cash rather than credit cards.
D) Avoid texting on Wi–Fi networks.
Skill: Applying
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
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12) George earns a good salary and rents an apartment that is within his means, yet every month,
he runs short of money. What should he do?
A) Set budget goals to clarify his situation.
B) Track his income to find out why he doesn’t have enough money.
C) Track his expenses to figure out why his spending exceeds his income.
D) Take out a loan to make sure he has money left over at the end of the month.
Skill: Applying
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
13) Juana is a junior in college and receives scholarship funds at the beginning of each semester.
In the past, this money has been sufficient to cover her costs each term. But this fall she ran out
of money before the term was over. Which of the following is the MOST sensible step she can
take to make sure she doesn’t run out in the spring?
A) Create a budget to help her smooth out her spending and avoid surprises.
B) Drop one of her classes and get a job to add to her income.
C) Request a cost of living increase in her scholarship funds.
D) Track her income to see where the money is going.
Skill: Applying
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
14) Soraya is trying to avoid running out of money every month. She has asked her employer to
deposit her paycheck directly into her bank account. She has also cut back on expenses by eating
out just once a week, driving her car as little as possible, and limiting visits to her favorite coffee
shop. She has also put all discretionary purchases on her credit card so that she can pay for
everything at the end of the month. What do you think she should do to avoid running out of
money every month?
A) She should eat out less.
B) She should drive more and spend less on public transportation.
C) She should have her paycheck mailed to her so she can deposit it herself.
D) She should not use her credit card so much, but instead rely more on cash purchases.
Skill: Evaluating
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
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15) What is one advantage of debt?
A) It allows large projects to be built.
B) It discourages borrowing.
C) It encourages borrowing.
D) It contributes to recessions.
Skill: Understanding
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
16) What is a loan principal?
A) the fee on a loan
B) the amount owed on a loan
C) the interest rate paid on a loan
D) the interest payment on a loan
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
17) Credit is essentially the same as
A) debt.
B) a loan.
C) interest.
D) principal.
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
18) Student aid includes all of the following EXCEPT
A) loans.
B) grants.
C) credit.
D) work study.
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
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19) For students, a federal loan is usually preferable to a private loan because
A) it is easier to obtain.
B) interest rates tend to be variable.
C) interest rates tend to be lower.
D) repayment timelines are shorter.
Skill: Evaluating
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
20) Gustavo is going to start college next year and is considering a financial aid package that
includes a federal loan, a private loan, a grant, and work study. What are his two BEST options
in that package if he wants to keep his costs down?
A) the federal loan and private loan
B) the federal loan and work study
C) the grant and work study
D) the federal loan and grant
Skill: Applying
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
21) A credit card is a(n) ________ loan.
A) secured
B) unsecured
C) permanent
D) impermanent
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
22) What is one benefit of having a credit card?
A) You can spend without limits.
B) You won’t pay interest charges.
C) You may qualify for free rental cars or hotel rooms.
D) You may receive purchase protection on products.
Skill: Understanding
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
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23) The starting point in shopping for a credit card is to find out the
A) annual percentage rate.
B) source of the card.
C) grace period.
D) credit limit.
Skill: Understanding
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
24) Fees associated with credit cards include all of the following EXCEPT
A) cash advance fees.
B) annual fees.
C) grace fees.
D) late fees.
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
25) Why might a person’s first credit card have a high APR?
A) lack of credit history
B) long credit history
C) high credit score
D) low credit limit
Skill: Applying
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3
26) What does a credit score evaluate?
A) how likely a person is to default on a loan
B) the length of a person’s credit history
C) the amount of debt a person has
D) the number of credit cards a person holds
Skill: Remembering
Section: Actions to Improve Your Financial Health
Learning Outcome: 1a.3