Economics Chapter 11

Question 1

Consumer credit serves to keep up the high level of spending needed for a healthy U.S. economy.

Accepted Answer

True

Question 2

Most mortgages have a variable interest rate.

Accepted Answer

False

Question 3

A product that doesn't have a brand name but carries the name of the store/chain of stores is a

Accepted Answer

house brand

Question 4

A method of buying something on credit with scheduled payments over time is called a(n)

Accepted Answer

installment plan

Question 5

Which of the following is not a disadvantage of advertising?

Accepted Answer

It is very cheap for firms to advertise

Question 6

Until about 100 years ago, borrowing by individuals was looked at as a good thing.

Accepted Answer

False

Question 7

Borrowers who obtain variable-rate mortgages typically pay a

Accepted Answer

lower rate of interest in the first year or so

Question 8

The federal agency that inspects and regulates the grading of meats, fruits, and vegetables is

Accepted Answer

the U.S. Department of Agriculture

Question 9

Buyers are entitled to repay a portion of the outstanding balance each month on

Accepted Answer

revolving charge accounts

Question 10

Advertising is both good and bad for consumers.

Accepted Answer

True

Question 11

Home equity loans can be obtained at rates

Accepted Answer

lower than other types of consumer loans

Question 12

An advertiser might claim that a well-known actor/personality uses a product or service, and

Accepted Answer

two of these

Question 13

Professionals, such as doctors, lawyers, and teachers, all have their own associations to

Accepted Answer

both of these

Question 14

The federal agency that protects consumers against dangerous foods, drugs, and cosmetics is the

Accepted Answer

Food and Drug Administration

Question 15

The interests of industry associations are always the same as the interests of consumers.

Accepted Answer

False

Question 16

Some people use their home as collateral in purchasing major consumer goods, and this is called

Accepted Answer

a home-equity loan

Question 17

In recent years, home equity loans have become very popular.

Accepted Answer

True

Question 18

Advertisers pay for most of the programs we watch on TV or listen to on the radio.

Accepted Answer

True

Question 19

Industry associations

Accepted Answer

all of these

Question 20

The major disadvantage of a home equity loan is that one can lose their home if they

Accepted Answer

do not pay back the loan in a timely manner

Question 21

The purpose of advertising is to increase sales by creating demand for the advertised products.

Accepted Answer

True

Question 22

Current federal tax laws do not allow for the deduction of interest on home equity loans.

Accepted Answer

False

Question 23

The title to the merchandise passes to the buyer in exchange for a promise to pay with a(n)

Accepted Answer

charge account

Question 24

The wise consumer uses advertising with intelligence and caution.

Accepted Answer

True

Question 25

Which of the following is not true about being a wise shopper?

Accepted Answer

It is always an easy thing to do.

Question 26

There are no federal agencies that provide some form of protection/information to consumers.

Accepted Answer

False

Question 27

The fair market value of a home is $100,000. The mortgage balance is $30,000. The equity is

Accepted Answer

$70,000

Question 28

Which of the following is not an advantage of advertising?

Accepted Answer

You generally cannot learn a lot from an ad.

Question 29

Which of the following is not a step that can help you shop wisely?

Accepted Answer

Buy on impulse.

Question 30

Credit cards permit their holders to charge purchases at thousands of retail locations

Accepted Answer

in the United States and overseas

Question 31

The collateral for a mortgage loan is

Accepted Answer

the home that the mortgage loan finances

Question 32

Having a budget guarantees that you are going to get the most for your money.

Accepted Answer

False

Question 33

Advertising provides a major source of income for

Accepted Answer

all of these

Question 34

Many industries are organized into associations.

Accepted Answer

True

Question 35

Buying on credit never saves people money in the long run.

Accepted Answer

False

Question 36

In order to get the most for your money, it is important to learn to be a wise shopper.

Accepted Answer

True

Question 37

Some large retail chains issue their own credit cards.

Accepted Answer

True

Question 38

Advertisers try to develop loyalty to brand names.

Accepted Answer

True

Question 39

A bank in which a borrower has a savings account may extend a low-interest loan based on

Accepted Answer

the balance of the depositor's savings account

Question 40

Which of the following is a potential cost of credit cards?

Accepted Answer

all of these

Question 41

You can't get into financial difficulty if you pay your credit card minimum monthly payt.

Accepted Answer

False

Question 42

Additional fees incurred by consumers as a result of paying their charge account bills late are

Accepted Answer

finance charges

Question 43

Banks & other financial institutions can't make personal loans on a customer's general credit.

Accepted Answer

False

Question 44

A product that doesn't have a brand name but competes with the brand name product is called a

Accepted Answer

generic product

Question 45

The advertising/sales tactic involving a store advertisement of a well-known product offered at

Accepted Answer

a low price to attract customers is called bait and switch

Question 46

Which is a technique relied on by advertisers to create demand and to sell their products?

Accepted Answer

all of these

Question 47

A loan to finance the purchase of a home is called a

Accepted Answer

mortgage

Question 48

The Consumer Product Safety Commission

Accepted Answer

both of these

Question 49

There are no laws to protect consumers against advertising tactics.

Accepted Answer

False

Question 50

It is wise to learn how to use credit properly.

Accepted Answer

True

Question 51

State/local governments do not provide any type of protective services/info to consumers.

Accepted Answer

False

Question 52

W/o advertising, the costs of producing many of the entertainment events we are accustomed to

Accepted Answer

would be much higher

Question 53

The purpose of the Better Business Bureau is to

Accepted Answer

both of these

Question 54

Ads that offer you something for nothing are often reliable ads.

Accepted Answer

False

Question 55

Which of the following is a type of nongovernmental consumer service provider?

Accepted Answer

all of these

Question 56

Today, the use of credit has become a way of life for millions of U.S. consumers.

Accepted Answer

True

Question 57

People use credit because it enables them to buy things now rather than later.

Accepted Answer

True

Question 58

Paid announcements that call attention to a product or service in the hopes of attracting

Accepted Answer

customers is called advertising

Question 59

One of the most common appeals used by advertisers is based on the knowledge that

Accepted Answer

everyone wants to be accepted by one's peers

Question 60

The Federal Trade Commission

Accepted Answer

both of these

Question 61

The term "equity" refers to the value remaining on a property after deducting the mortgage.

Accepted Answer

True

Economics Chapter 11

Questions 61

Economics Chapter 11

Questions 61