What is the main benefit of making a larger down payment?

Lower monthly payment and less interest

Why do lenders require a down payment on many auto loans?

To reduce risk and lower amount financed

Buy here pay here dealerships often charge?

Higher interest rates than traditional lenders

total market value adjusted for inflation

When is it usually best to refinance an auto loan?

When market rates fall and credit score improves

A co signer on an auto loan is responsible for the debt if?

The primary borrower misses payments

Rolling an old loan into a new loan on a trade in can lead to?

Paying interest on the previous balance again

What is confirmation bias?

Believing only information that supports what you already think

What is one main difference between a debit card and a credit card at the checkout counter?

A debit card withdraws real money immediately

Which action hurts your credit most during the auto loan process?

Missing a payment by thirty days

Which choice shows loss aversion in action?

Keeping money in savings to avoid risk, even if returns are low

Why does a low credit score raise the cost of an auto loan?

Lender sees more risk and charges higher rate

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Economic Concepts and Financial Literacy

97 termsStudBud Administration27 plays

Test your knowledge on GDP, business types, financial terms, and economic principles in this engaging quiz.

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Questions 97

Answers

1
What is the main benefit of making a larger down payment?
Lower monthly payment and less interest
Higher interest rate
Longer term
Higher loan balance
2
Real GDP adjusts for what?
Interest rates
Taxes
Inflation
Exports
3
Which of the following is factored into your credit report
Payment history
Job history
Medical History
Birthplace
4
Why do lenders require a down payment on many auto loans?
To increase interest rate
To raise monthly payment
To reduce risk and lower amount financed
To extend the loan term
5
True or false: A good credit score is 720 or higher.
True
False
6
A local government sets apartment rents below the market equilibrium. The likely result is
a shortage of apartments
no change in quantity rented
a surplus of apartments
falling construction costs
7
What is a benefit of a corporation?
Easy to start
All profits go to owner
Limited liability
Minimal regulation
8
Which factor lowers the interest rate on an auto loan the most?
Low credit score
High credit score
Short warranty
Old vehicle age
9
According to the law of demand, if the price of ice cream rises, the quantity demanded will
rise
fall
stay the same
first rise then fall
10
LLC stands for?
Large Loan Corporation
Liberal Learning Center
Local Legal Committee
Limited Liability Company
11
What does “interest” mean in a loan?
The cost of borrowing money
A reward for early payment
Money you earn on deposits
A type of fee only on mortgages
12
If the demand for gasoline is price‑inelastic, a rise in price will cause total revenue to
fall then rise
fall
stay unchanged
rise
13
A diversified portfolio helps reduce risk.
False
True
14
Which fee can happen if you spend more money than you have in your account with a debit card?
Late payment fee
Balance transfer fee
Overdraft fee
Annual fee
15
What is the NYSE?
New York Stock Exchange
New Yield Sales Enterprise
National Youth Stock Entity
None of the above
16
Which cost is not included in the monthly auto loan payment?
Sales tax rolled into loan
Principal
Interest
Fuel and maintenance
17
Buy here pay here dealerships often charge?
Zero interest forever
Negative interest rates
Higher interest rates than traditional lenders
Government subsidized rates
18
What does GDP stand for?
General Debt Position
Government Development Plan
Gross Domestic Product
Global Domestic Price
19
Which formula represents GDP?
M - X + G + T
C + I + G + (X-M)
C + I + T + E
I + G - C
20
Do you have have to repay a grant?
No
Yes
21
In the circular‑flow model, households supply
goods in product markets
labor in resource markets
subsidies to firms
public goods to government
22
Real GDP measures
total market value adjusted for inflation
share of adults in the labor force
average price level of a basket of goods
total market value of final goods at current prices
23
When is it usually best to refinance an auto loan?
When loan balance is less than one hundred dollars
On the first payment
When market rates fall and credit score improves
Right before selling the car
24
What is a major disadvantage of payday loans?
Tax deduction
Low risk
High interest rates
Long repayment period
25
What is the Typical term for a Mortgage?
10 or 20 year
7 or 10 year
15 or 30 year
2 or 8 year
26
A market with many sellers offering identical corn at the posted price is closest to
monopolistic competition
oligopoly
perfect competition
monopoly
27
A co signer on an auto loan is responsible for the debt if?
Registration expires
The insurance needs renewal
The primary borrower misses payments
The car is washed
28
Rolling an old loan into a new loan on a trade in can lead to?
Zero taxes
Shorter term
Immediate equity
Paying interest on the previous balance again
29
Which loan term length generally carries the lowest interest rate?
60 months
72 months
84 months
36 months
30
What is the original amount borrowed in a loan?
Term
Interest
Origin Debt
Principal
31
What is confirmation bias?
Being confident in your credit score
Choosing the best loan option
Believing only information that supports what you already think
Checking your bank balance too often
32
What type of bank account does a debit card pull money from?
Savings account
Checking account
Retirement account
Credit account
33
Which business type has unlimited liability?
LLC
Corporation
Sole proprietorship
Franchise
34
What flows from households to the government?
Taxes
Loans
Wages
Goods
35
A sole proprietorship is owned by?
One person
A board
Shareholders
Two partners
36
What is the purpose of a credit card in building credit history?
Pay bills
Avoid taxes
Increase debt
Build credit history
37
What fee should you compare among lenders besides the rate?
Origination fee
License plate design
Fuel surcharge
Parking ticket cost
38
Inflation causes money to gain value.
False
True
39
If the cost of steel rises, making it more expensive for car manufacturers, the demand for cars will:
double
stay the same
increase
decrease
40
Which is NOT included in GDP?
Used goods
Haircuts
New homes
New cars
41
According to the law of demand, if the price of movie tickets increases, the quantity demanded will:
stay the same
become unlimited
increase
decrease
42
What is one main difference between a debit card and a credit card at the checkout counter?
A debit card withdraws real money immediately
A debit card earns travel miles on every swipe
A debit card always requires a signature
A debit card lets you pay later with interest
43
If you choose a longer loan term what usually happens to total interest paid?
It stays exactly the same
It decreases
It increases
It cancels the loan fees
44
What does it mean to “buy low, sell high”?
Make profit
Raise interest
Lose money
Avoid taxes
45
Which action hurts your credit most during the auto loan process?
Checking your own credit score online
Shopping rates with several lenders in one day
Missing a payment by thirty days
Asking for payoff amount
46
If a good has no close substitutes and is considered a necessity, its demand is likely:
elastic
completely price-insensitive
inelastic
always luxury
47
Which choice shows loss aversion in action?
Keeping money in savings to avoid risk, even if returns are low
Buying stocks on impulse
Saving more after getting a raise
Applying for a credit card
48
Early payoff of an auto loan saves money because it?
Reduces total interest
Extends warranty
Adds extra fees
Raises insurance premium
49
Why does a low credit score raise the cost of an auto loan?
Vehicle is older
Sales tax increases
Insurance covers less
Lender sees more risk and charges higher rate
50
What does the Schumer Box summarize for credit cards?
APR and fees
Loan repayment
Student loan details
Savings tracking
51
What is a mortgage?
A monthly rent payment
A home insurance fee
A type of credit card
A loan used to buy a home
52
A loan with a high interest rate will cost you nothing.
True
False
53
When there is an excess supply of a good (a surplus), the price will tend to:
Fall to a shortage
rise to increase producer surplus
fall to eliminate the surplus
stay above equilibrium
54
What type of loan requires collateral?
Unsecured loan
Student loan
Secured loan
Credit card
55
Which insurance covers the gap between what you owe and what the car is worth after a total loss?
Medical payments insurance
Liability insurance
Collision insurance
Gap insurance
56
What happens if you overdraft a debit card?
You may be charged a fee
Nothing happens
Your credit score drops
The store pays for it
57
What is loss aversion?
Wanting a discount
Taking big investment risks
Preferring savings accounts
Hating to lose money more than liking to gain it
58
When a market has excess demand (a shortage of goods), prices will tend to:
rise until the shortage is eliminated
be controlled by the government
fall until the shortage is eliminated
remain constant
59
What is the term 'principal' referring to in a loan?
Late fee
The original amount borrowed
Total amount paid over time
Interest charges
60
Spreading investments across stocks, bonds, and real estate best illustrates
diversification
arbitrage
inflation hedging
speculation
61
Market equilibrium occurs when:
supply greatly exceeds demand
consumer surplus is zero
quantity supplied equals quantity demanded
the government sets a fixed price
62
What is a variable expense?
Insurance
Groceries
Car payment
Rent
63
What is a Bull market related to in finance?
Stocks getting stuck
Stocks holding
Stocks going up
Stocks going down
64
What is a loan “term”?
The bank’s nickname for you
The penalty for missing a payment
The length of time you have to repay the loan
The due date for your credit card
65
What is the Schumer Box?
A summary of credit card costs including APR and fees
A student loan document
A savings tracker
A loan repayment calculator
66
Households provide ____ to businesses in the factor market.
Goods
Labor
Loans
Products
67
What is negative equity in an auto loan?
Paying off loan early
Owing less than the car is worth
Owing more than the car is worth
Having zero balance
68
Which situation illustrates the risk side of entrepreneurship?
Receiving interest on a savings account
Buying government bonds
Losing personal savings after a business fails
Collecting a weekly salary
69
According to the law of supply, if the price of coffee beans rises, coffee producers will likely:
stop producing coffee
substitute coffee for tea production
supply more coffee
supply less coffee
70
What is a secured loan?
A loan you get from friends
A loan with no repayment schedule
A loan that earns you interest
A loan backed by collateral like a car or house
71
Pre approval for an auto loan helps a buyer mainly by?
Removing credit requirements
Showing how much they can spend before shopping
Raising dealership prices
Extending the loan term automatically
72
Putting $100 a month into a savings account with 3 % interest when inflation is 5 % means the real value of savings will
stay the same
rise
fall
double every year
73
The biggest cost of carrying a monthly credit‑card balance is usually
the annual fee
cash‑advance limits
late‑payment penalties
interest charges
74
What happens if you default on a secured loan?
The loan disappears
The bank sends you rewards
Your credit score improves
The lender can take the collateral
75
A loan with a high interest rate will cost you less money.
True
False
76
What happens if you miss multiple payments?
Gain interest
Score improves
Credit score drops
You win a bonus
77
What does principal mean in an auto loan?
Interest charge
Dealer profit
Original amount borrowed
Monthly fee
78
Which would increase GDP?
Giving a gift
Buying a used car
Building a new factory
Babysitting for free
79
What is a dividend?
A share of profits
A type of bond
A stock fee
A loan
80
Entrepreneurs are important because they?
Avoid taxes
Slow down innovation
Only work in government
Create jobs
81
Country A can produce wheat at lower opportunity cost than Country B. Therefore, Country A should
export wheat
ban wheat trade
subsidize wheat imports
import wheat
82
What is a bear market related to in finance?
Credit
Stocks
Bonds
Mortgages
83
Which card lets you borrow money to pay later?
EBT card
Credit card
ATM card
Debit card
84
What does the abbreviation APR mean in an auto loan?
Average Payment Requirement
Annual Percentage Rate
Annual Price Ratio
Approved Payment Rate
85
Which statement best defines scarcity?
Resources are unlimited, but wants are limited
People can satisfy every desire without trade‑offs
Resources are limited, but wants are unlimited
Wages always rise faster than prices
86
Your credit score is a reflection of?
The payment you can provide to the financier
The risk you present to the financier
The assistance you can provide to the financier
87
Fixed interest rate on an auto loan means?
The rate changes every month
The rate stays the same for the entire loan
The lender can pick any rate at any time
The rate doubles each year
88
Which source supplies Federal revenue?
all the above
sales taxes
tariffs
personal income taxes
89
What is the term for hating to lose money more than liking to gain it?
Savings account liking
Big investment risks
Discount preference
Loss aversion
90
A franchise is best described as?
A public agency
A type of stock
A licensed brand model
A sole proprietorship
91
Imposing a 20 % tariff on imported shoes will most likely
increase consumer surplus
lower domestic shoe prices
raise domestic shoe prices
raise real wages for all workers
92
What does APR stand for?
Actual Payment Rate
Annual Payment Return
Annual Percentage Rate
Adjusted Payment Ratio
93
Credit unions, labor unions, and corporations are examples of
fixed inputs
public goods
natural monopolies
economic institutions
94
Unlimited wants in economics implies that people:
will have infinite income
do not need to make choices
will always experience scarcity of resources
will have a surplus of goods
95
What is a secured loan backed by?
Collateral like a car or house
Friends
Interest
Repayment schedule
96
What flows from businesses to households in the circular flow?
Goods and services
Labor
Taxes
Loans
97
You keep paying for a gym you don’t use “because you already paid for it.” What’s happening?
Smart budgeting
Sunk cost fallacy
Opportunity cost
Confirmation bias

Economic Concepts and Financial Literacy Flashcards | StudBud