Vocabulary
A person’s income is the money they receive from work or other sources.
A) Time spent working
B) Money earned
C) Government laws
B) Money earned
Explanation: Income is the money a person receives from work, business, or investments.
What type of income does a worker receive for doing a job?
A) Rent
B) Wage or salary
C) Profit
D) Investment
B) Wage or salary
Explanation: Workers earn wages or salaries for their labor.
Choose the correct sentence.
A) Revenue are the money a company earns.
B) Revenue is the money a company earns.
C) Revenue be the money a company earns.
B
Explanation: “Revenue” is treated as a singular noun, so we use is.
A bakery sells cakes and bread every day. At the end of the month, the bakery calculates the money it received from customers.
What economic term describes this money?
A) Profit
B) Revenue
C) Debt
D) Salary
B) Revenue
Explanation: Revenue is the total money earned from sales.
Why do people usually save money?
A) To spend everything immediately
B) For future needs or emergencies
C) To avoid working
D) To increase taxes
B) For future needs or emergencies
Explanation: Saving helps people prepare for unexpected expenses.
When a company earns money from selling products or services, this money is called:
A) Salary
B) Revenue
C) Debt
D) Tax
B) Revenue
Explanation: Revenue is the total money a company receives from sales before expenses are removed.
A person owns a small store and earns money from selling products. What type of income is this?
A) Business income
B) Salary income
C) Government income
D) Tax income
A) Business income
Explanation: Business owners earn income from selling goods or services.
"If a company sells more products, it ______ more revenue."
A) earn
B) earns
C) earning
D) earned
B) earns
Explanation: "A company" is third person singular, so the verb takes -s.
Maria earns $800 per month. After paying taxes, she receives $700.
What is Maria’s net income?
A) $800
B) $100
C) $700
D) $1,500
C) $700
Explanation: Net income is income after taxes.
If someone spends more money than they earn, what may happen?
A) Profit
B) Debt
C) Investment
D) Revenue
B) Debt
Explanation: Debt occurs when someone owes money.
The word profit means:
A) Money borrowed from a bank
B) Money left after expenses
C) Total money earned before expenses
D) Money paid to workers
B) Money left after expenses
Explanation: Profit is what remains after a company pays all its costs.
If a person’s salary increases but prices increase faster, what might happen to their real income?
A) It increases
B) It stays the same
C) It decreases
D) It disappears
C) It decreases
Explanation: Inflation reduces purchasing power.
Choose the correct comparative sentence.
A) Real income is more important than nominal income.
B) Real income is importanter than nominal income.
C) Real income is most important than nominal income.
A
Explanation: The correct comparative form is more + adjective + than.
A worker earns $1,000 per month, but prices increase in the economy.
What may happen to the worker’s real income?
A) It increases
B) It decreases
C) It doubles
D) It becomes zero
B) It decreases
Explanation: Inflation reduces purchasing power.
Why is it useful to track your expenses?
A) To increase taxes
B) To control spending
C) To reduce income
D) To create inflation
B) To control spending
Explanation: Tracking expenses helps manage money.
Passive income refers to:
A) Income that is obtained once at the moment of working
B) Income measured using current prices
C) Income after taxes
D) Income that continues to generate long after work is done
D) Income that continues to generate long after work is done
Explanation: Passive income is profit that continues to be obtained long after having executed the work, passively or automatically.
Gross income is the money a person earns:
A) After taxes
B) Before taxes
C) After spending
D) After saving
B) Before taxes
Explanation: Gross income is the total income before deductions.
Fill in the blank:
"If prices rise, people ______ less with the same amount of money."
A) can buy
B) can buys
C) buying
D) bought
A) can buy
Explanation: After modal verbs like can, we use the base verb.
A company earns $50,000 from selling products and spends $40,000 on expenses.
What is the company’s profit?
A) $10,000
B) $40,000
C) $50,000
D) $90,000
A) $10,000
Explanation: Profit = revenue minus expenses.
A student receives $20 every week and saves $5.
What financial habit is this?
A) Borrowing
B) Saving
C) Taxation
D) Inflation
B) Saving
Explanation: Saving means setting aside money for later.
Real income means:
A) Income adjusted for inflation
B) Income before taxes
C) Money earned in another country
D) Only money from salaries
A) Income adjusted for inflation
Explanation: Real income shows how much a person can actually buy with their money.
Net income is the money a person receives:
A) Before taxes
B) After taxes and deductions
C) Before expenses
D) After spending
B) After taxes and deductions
Explanation: Net income is the money a person actually takes home.
Choose the correct conditional sentence.
A) If people save money, they will have more financial security.
B) If people save money, they will had more financial security.
C) If people save money, they having more financial security.
D) If people saved money, they will having security.
A
Explanation: This is the correct first conditional structure.
A country experiences high inflation. Salaries stay the same, but prices increase.
What economic problem are people experiencing?
A) Higher real income
B) Lower purchasing power
C) More revenue
D) Lower taxes
B) Lower purchasing power
Explanation: Inflation makes money buy fewer goods and services.
Why is understanding income important?
A) It helps people plan spending and saving
B) It increases inflation
C) It reduces prices
D) It eliminates taxes
A) It helps people plan spending and saving
Explanation: Understanding income helps people make better financial decisions.