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Unit 12 Test Review Flashcards | StudBud
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Unit 12 Test Review
Unit 12 Test Review
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Answers
1
Which of the following is most likely to have the highest rate of return?
money market account
checking account
CD
stock
2
The money a person has after paying taxes is known as
nontaxable income
taxable income
consumer income
disposable income
3
To set aside income so that you will have it later.
debit card
mutual funds
savings
time deposit
4
Valuable item pledge as security for a loan.
charge
surplus
collateral
income
5
Which U.S. president proposed that consumer’s rights be recognize?
John F. Kennedy
Franklin D. Roosevelt
Harry Truman
Theodore Roosevelt
6
When income is more than expenses.
collateral
expenses
charge
surplus
7
Agreement to deposit a sum of money for a certain time period.
time deposit
risk
debit card
savings
8
The most common source of credit today is?
credit card
bank loan
layaway plan
auto loan
9
The financial tool that acts like an electronic check?
debit card
savings card
credit card
check
10
The credit crisis of 2008 was caused by
Risky loans made by Savings and Loan association
Treasury department loans to troubled companies
Home loans made to people who couldn’t repay them
Federal loans to financial institutions
11
The Fed is called the “Bankers Bank” because that is where bankers go to take out personal loans.
True
False
12
What are three tools the FED uses to increase the money supply?
FED, OMO, FEC
money, cars, clothes
OMO, reserve requirements, and discount rates
other peoples' money
13
What was a weakness of the Federal Reserve Act of 1913?
Too many loans to people who couldn’t repay them
Each of the 12 districts set their own monetary policy
It didn’t allow weak banks to close
Deposit insurance couldn’t protect deposits
14
Three basic parts of a budget are
income, costs, and savings
surplus, collateral, and balance
income, expenses, and balance
surplus, deficit, and expenses
15
Pool of money from many people invested by experts
risk
debit card
time deposit
mutual funds
16
What’s the name of the national corporation that insures bank deposits?
FDIC
CD
FED
ACDC
17
To pay by using borrowed money
expenses
collateral
surplus
charge
18
Which person has a budget deficit?
one who invest more than they save
one who spends more than they earn
one who saves more than they spend
one that earns more than they spend
19
Comparison shopping and reporting faulty products
opportunity cost
advertisements
consumer rights
consumer responsibilities
20
Lack of guarantee you will make money.
mutual funds
risk
time deposit
savings
21
The function of the Federal Open Market Committee is to make changes to the money supply.
False
True
22
To maintain the nation’s currency the Fed pulls old money out of circulation.
False
True
23
Allows you to use money from your checking account without a check.
debit card
savings
risk
time deposit
24
Which is a benefit of credit?
you can end up in perpetual debt
you can pay interest of up to 18%
you can buy things before saving the entire price
you can buy things you can't afford
25
Warns consumers of dishonest business practices
Better Business Bureau
Consumer rights
Opportunity cost
Advertisements
26
Describe open market operations.
compensation or payment
buying and selling bonds
unfair monopolies
earth conditions
27
Often use emotion to get you to make a purchase.
opportunity cost
Better Business Bureau
advertisements
consumer responsibilities
28
What do financial institutions do with the money deposited with them?
steal it
make loans
double it
give it back
29
The money you spend on everything
collateral
income
surplus
expenses
30
The money you earn.
surplus
income
charge
expenses
31
Every bank in the U.S. contributed funds to build the new central bank that became the Federal Reserve System.
False
True
32
Which of the following makes you more likely to buy on impulse?
comparison shopping
paying with credit
leave the store to decide
making a list of what you need
33
Explain how the FED’s reserve requirement effects bank loans.
The higher the reserve requirement, the more they can loan out.
The lower the reserve requirement, the more they can loan out.
The lower the reserve requirement, the less they can loan out.
The higher the reserve requirement, the less they can loan out.
34
One disadvantage of a CD is that it has?
penalty for early withdrawal
lot of risk
pays a high dividend
low interest rate
35
The right to safety, to be informed and redress are
consumer rights
advertisements
Better Business Bureau
consumer responsibilities
36
When a person buys stock, that person is?
borrowing money from a company
becoming part owner in a company
voting on how a company will operate
lending money to a company
37
What federal law created deposit insurance in case of bank failures?
National Bank Act of 1863
Federal Reserve Act of 1913
Banking Act of 1933
National Bank Holiday Act of 1929
38
The Fed cannot block a merger between two national banks.
True
False
39
Something you give up when purchasing an item.
advertisements
opportunity cost
consumer rights
consumer responsibilities
40
How does a warranty protect a consumer?
it guarantees that a product has been tested
it lists the rights that all consumers have
it allows consumers to comparison shop
it promises to repair or replace faulty products
