7.11 Personal Finance Unit Test

What does an amortization table show? *the principle and interest being paid on a loan the deductible for different insurance policies the copay required by different kinds of health insurance the ratio of dividends to profits paid on a share of stock

A

What makes a credit card more convenient than a debit card? *It can be used to buy things without immediate payment. It pays interest on major purchases. It gives 24-hour access to money in a savings account. It comes with collective bargaining power.

A

Why do some auto insurance customers want medical coverage for their policies? *to avoid having to pay for hospital bills resulting from an accident they cause to prevent uninsured motorists from suing them for injuries they cause to help find the best hospital to care for people they injured in a car accident to keep from having to make a co-pay in case of a minor injury after an accident

A

Why might a letter-writing campaign get a company to change its business practices? *The company might fear that the letter-writing campaign will become a boycott if it doesn't respond. The government wants to keep both consumers and companies from burdening the postal system. Consumers use letter-writing campaigns to get the government to pass favorable legislation. The company could end up spending a lot of money to answer all the letters.

A

With which type of account is a mortgage payment associated? *home loan credit card checking account health insurance

A

Which of these allows someone to buy a car that costs more than he or she can afford? lease liability insurance mortgage *car loan

D

Why does a savings account make a better investment than a checking account? Checking accounts aren't insured by the government. Savings accounts pay an annual dividend. Checking accounts have an annual fee. *Savings accounts earn interest.

D

Which of these can be used to express customer dissatisfaction? *a boycott a warranty antitrust laws a recall

A

Using a budget is a good way to what? pay for utility bills *stay out of debt earn dividends avoid risky investments

B

What do banks pay with some of the profits they make by loaning out the money in their customers' savings accounts? property taxes to the state government *interest on savings accounts a dividend to the Federal Reserve a tariff to the International Monetary Fund

B

What statement describes one of the opportunity costs of attending college? It takes a lot of time to earn the money needed to pay for college. *The money spent on tuition could've been invested in stocks or bonds. Specializing in one area of study limits a person's possible jobs. A college education is no guarantee of getting a high-paying job later in life.

B

Which is the opposite of a generic good? a normal good *a brand-name good a substitute an inferior good

B

Which of these statements describes a situation in which people have to pay a deductible? Their health insurance allows them to choose any doctor or hospital. *Their insurance policy only covers part of a medical expense. They have insurance that covers actual value instead of replacement cost. They have been in an accident caused by someone who has no insurance.

B

Which of these strategies might result in the government passing a law preventing companies from engaging in unfair or offensive business practices? striking *lobbying boycotting producing

B

Which sacrifice are boycotters likely to make? having their wages reduced *paying higher prices going to jail losing their reelection campaigns

B

Which step in the budget-making process is the best way to offset an unexpected financial obligation? Check interest rates on loans. *Reduce expenses in flexible categories. Borrow enough money to meet expenses. Add up all sources of income.

B

Why do people reach different decisions using cost-benefit analysis even under the same conditions? All values are ultimately monetary. *Costs and benefits are both subjective. Investment payoffs vary as time goes forward. Different people live under different governments.

B

A socially responsible consumer might boycott a company that uses what? sustainable production methods tariffs *child labor an assembly line

C

What is the grace period on a credit card? the amount of time a person has to wait to get approved for the card the number of years a person has to have worked before being able to get a card *the number of days the customer can wait to pay for purchases without being charged interest the number of months the customer has to pay off a balance transferred from another card

C

What kind of contract outlines the obligations of a landlord and his or her renters? bond regulation *lease mortgage

C

Which of these credit card features would be best for customers who want to pay off the balance on a high-interest credit card? a long grace period no fees for cash advances *low fees for balance transfers an annual fee that can be waived

C

Which of these is an example of discretionary spending? groceries debt repayment *vacation rent

C

Which of these statements describes the costs and benefits of getting a mortgage? Mortgages provide a replacement for lost or damaged possessions but come with high fees. Mortgages help people pay for college but involve lots of paperwork. *Mortgages enable people to buy houses but result in large interest payments. Mortgages prevent government regulation of property but involve higher taxes.

C

In which situation would renter's insurance be useful? You want to choose your own doctor or hospital. You lose your job because of an injury or illness. You cause a car accident that injures other people. *Your personal possessions are stolen from your apartment.

D

Which of these is made easier by maintaining a good credit history? save money increase revenues go to college *obtain a loan

D