DECA+ Business Management and Administration Practice Exam

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Boost your business management skills with the DECA+ Business Management and Administration Exam. Practice with interactive questions, hints, and detailed explanations. Ace your exam today!

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What is the purpose of wage garnishments?

To increase employee salaries
To pay employee pensions
To satisfy court-ordered payments from an employee's salary
To incentivize performance bonuses

The correct answer is: To satisfy court-ordered payments from an employee's salary

Wage garnishments serve the specific purpose of satisfying court-ordered payments from an employee's salary. When an individual has outstanding debts or legal obligations, such as child support, taxes, or other court-ordered payments, a court may issue an order to garnish a portion of the person's wages. This means that a predetermined amount of money is withheld directly from their paycheck and sent to the creditor or agency to whom the money is owed. This process ensures that debts are repaid while also allowing employees to retain part of their earnings for personal use. The legal framework surrounding wage garnishments is designed to balance the rights of creditors to collect debts with the need for individuals to maintain a reasonable standard of living. The other options do not accurately describe the function of garnishments, which are specifically tied to fulfilling legal and financial obligations.