LEVEL one financial test

Section 1: Word Definitions

Instructions: Define the following financial terms.

Assets
Liabilities
Income
Expense
Budget

Section 2: General Questions on Tax

Instructions: Answer the following questions related to taxes.

What is the difference between gross income and taxable income?

Name two types of taxes typically deducted from an employee's paycheck in the United
States.
What is the purpose of a W-4 form?
Define tax deduction and provide an example.
Explain what a tax credit is and give an example.

Section 3: Economic Terms

Instructions: Define the following economic terms.

Inflation
Gross Domestic Product (GDP)
Supply and Demand
Interest Rate
Market Economy
Section 4: Defining Words

Instructions: Define the following words in the context of finance or economics.

Diversification
Liquidity
Capital
Equity
Fiscal Policy

Time Allocation: You have 1 hour to complete this test