For most Americans, the biggest impact the Federal Reserve has on their lives is when it ____.

Raises or lowers the interest rate.

A disadvantage to buying an expensive item like a 60-inch TV with cash might be

Having to wait until you've saved the full amount.

If the price is affordable, what would be the best choice for a young newly married couple?

Buying a house on a 15 year mortgage.

An advantage of buying an expensive item such as a car with credit is

Being able to get the car immediately

Which would most likely have a positive impact on a young (18-21 year old) person’s credit?

Borrowing $1,000 from a bank & paying it back on time.

Why would paying for college with a credit card be a poor decision?

The interest rate on credit cards is too high.

Why is US currency valuable?

People believe the US gov't is stable & will stay this way.

If someone owes $5000 dollars on a credit card, how could they avoid paying too much interest?

Paying as much as possible on time each month.

Why are mortgages usually considered to be good debt?

Houses usually increase in value as time goes on.

studbud

Economics Unit III (Personal Finance) Review

28 termsStudBud Administration1,017 plays

Ch 19 Review for Econ

Flashcards28 cardsFPractice quizPHost liveL

Questions 28

Answers

1
For most Americans, the biggest impact the Federal Reserve has on their lives is when it ____.
Raises or lowers the interest rate.
Sets the date of Presidential elections.
Takes in deposits from the US government.
Inspects the records of local banks.
2
Using student loans for college & majoring in ______ would be considered "good debt."
Electrical Engineering
All of the Above
Nursing
Computer Science
3
A disadvantage to buying an expensive item like a 60-inch TV with cash might be
Having to open up a store credit account.
Making monthly payments, with interest, for several years.
Negative impacts on credit score.
Having to wait until you've saved the full amount.
4
Which is considered money?
Currency
All of the Above
Credit Card
Checks
5
Which is not a service usually offered by banks?
Savings accounts.
Safety deposit boxes.
Auto loans.
Selling houses & real estate.
6
Buying stocks or gold would be _________.
Saving
Taxation
Spending
Investing
7
Which is not a form of credit?
Checking Account
Auto Loan
Mortgage
Credit Card
8
If the price is affordable, what would be the best choice for a young newly married couple?
Using their credit card to pay off student loans.
Borrowing the entire amount to buy a car.
Renting until they have saved up the full price of a house.
Buying a house on a 15 year mortgage.
9
Which type of auto insurance costs the least but doesn't protect the driver's own car?
Collision
Liability
Workers Compensation
Comprehensive
10
An advantage of buying an expensive item such as a car with credit is
The car will go up in value before it is paid off.
Being able to get the car immediately
Possibly paying late fees.
Having to make payments with interest added for p 5 years
11
The biggest portion (35%) of a person's credit score is based on his/her ______.
Amount that they currently owe creditors.
Types of credit used.
Amount of years they have used credit.
Payment history.
12
Which word best summarizes insurance?
Invincibility
Risk
Protection
Frugality
13
Who is most likely to need life insurance?
People with children
Single people who recently graduated college.
Retired people "downsizing" into a smaller/cheaper houses.
Professional athletes
14
Bad debt includes
Student loans for a doctor.
Credit card bills
Mortgages
None of the above.
15
The money that borrowers pay creditors for the opportunity to borrow is called
Profits
Interest
Principle
Revenue
16
Which word best summarizes investing when it is compared to saving?
Risk
Profit
Protection
Frugality
17
Most (66.5%) of personal bankruptcies in the US are due to ___.
Divorce
Failure to pay off student loans
Misusing credit & running up large debts.
Medical bills
18
The amount of money borrowed from a creditor is known as ________.
Revenue
Interest
Principle
Profit
19
Which would most likely have a positive impact on a young (18-21 year old) person’s credit?
Maxing out a credit card & making minimum payments.
Borrowing money from their grandparents to buy a car.
Borrowing $1,000 from a bank & paying it back on time.
Using scholarships to attend college.
20
Dangers of using credit include
Going into debt
All of the Above
Having to pay penalties for missed payments.
Very easy to overspend.
21
Which credit score would lead to the borrower paying the least interest?
400
700
800
500
22
Why would paying for college with a credit card be a poor decision?
Credit cards usually have limits of around $1,000
Credit cards can only be used in stores and restaurants.
The interest rate on credit cards is too high.
Credit cards must be paid in full within one year.
23
For a member of the class of 2027, which would be a good financial decision to make after graduation?
Any of the above
Going to SKYCTC & then WKU to study nursing.
Going to tech school & studying to be a plumber or HVAC technician.
Living at home, attending WKU & getting a computer science degree
24
Why is US currency valuable?
It can be traded quickly for its equivalent in gold.
It is made of valuable materials such as silver.
People believe the US gov't is stable & will stay this way.
Because it can only be used in the USA.
25
If someone owes $5000 dollars on a credit card, how could they avoid paying too much interest?
Using another credit card to pay bill & then pay $100/month
Paying as much as possible on time each month.
Refinancing their mortgage loan.
Making the minimum payment on time each month.
26
Why are mortgages usually considered to be good debt?
All of the Above
House payments are usually less than apartment rent.
Houses usually increase in value as time goes on.
Mortgages are interest free.
27
Which information is not included on a person's credit report?
Types of credit that they use.
Amount that they owe creditors.
Bill payment history.
Their education level.
28
What is the best definition of credit?
Earning interest on a savings account.
Using checks to pay for bills.
Receiving money from a deceased person.
Borrowing money

Economics Unit III (Personal Finance) Review Flashcards | StudBud