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This quiz consists of 5 multiple choice and 5 short answer questions through Chapter 4.

Multiple Choice Questions

1. Why are small, specific categories recommended over traditional, broad categories?
(a) Broad categories work only for high-income individuals.
(b) Smaller categories allow people to determine which purchases bring only temporary happiness.
(c) Specific categories are easier to place on a chart.
(d) Broad categories cost more life energy.

2. How is net worth determined?
(a) All items purchased during a lifetime.
(b) Estimated current sale price of all items currently owned, plus other assets such as cash and investments.
(c) Multiply monthly income by 12.
(d) Add together everything owned, then subtract everything owed.

3. What makes the difference between a good life and a great life?
(a) A good job or a great job.
(b) Contributing money, energy, or time after having enough.
(c) Having more leisure time than work time.
(d) Being poor versus being rich.

4. What broad category are alcohol and tobacco subcategories of?
(a) Forbidden expenses.
(b) Recreational expenses.
(c) Occasional expenses.
(d) Acceptable expenses.

5. What do the authors suggest that people divide their spending into?
(a) Three columns.
(b) Categories that make sense for them.
(c) Categories determined by life energy.
(d) Categories defined in Chapter 3.

Short Answer Questions

1. On average, what do Americans have less of than ever before?

2. Why are vacations considered to be a work expense?

3. What should the amount started with at the beginning of the month, plus total income, minus total expenses equal?

4. What is Step 1, Part 1 of the program?

5. How should people reduce spending?

(see the answer key)

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