Unit 4 Pre-Test

Front

Which of the following is NOT one of the basic functions of money? Unit of account, Store of value, Interest bearing instrument, Medium of Exchange

Back

Interest bearing instrument

Front

All of the following are true about the money supply EXCEPT?
It is measured, and somewhat influenced, by the Federal Reserve;
It is constantly changing, depending on loans from commercial banks;
It is made up of a mix of cash in circulation and money stored in accounts at banks and credit unions;
It includes Bitcoin and other cryptocurrencies.

Back

It includes Bitcoin and other cryptocurrencies

Front

Which statement shows that money is a "store of value?"

Back

I just used the ten dollars given to me last year.

Front

Which would be the best place to start a savings account when someone gets a new job? A commercial bank or credit union, A pawn shop or payday lender, A brokerage investment firm, A mortgage lender

Back

A commercial bank or credit union

Front

When a borrower is offered an adjustable rate loan, what should they usually expect?

Back

Relatively lower payments at first, with rates increasing in time

Front

Which of the following is an accurate comparison of credit, savings, and investment services available to consumers from financial institutions? Options: Savings accounts typically offer higher interest rates than investment accounts, and credit cards have no associated fees. Credit services allow consumers to earn interest on their deposits, while savings accounts and investment accounts have high-interest rates. Investment accounts generally involve higher risk and potential for higher returns compared to savings accounts and credit services. Credit services are the safest option for long-term financial growth, while savings accounts and investment accounts are riskier choices.

Back

Investment accounts generally involve higher risk and potential for higher returns compared to savings accounts and credit services.

Front

When a potential borrower is shopping for the best loan for an upcoming automobile purchase, they should be closely reading the loan offer to be sure they

Back

Are getting the best (lowest) interest rate they can given their credit score

Front

When a student wants to put a large sum of money aside for several years to eventually turn into a down payment on a house, she should probably

Back

Keep her money in a high yield savings account at a reputable bank that is FDIC insured

Front

The asset allocation above is for a nearly-retired investor, the purple section (C) would most likely represent

Back

bonds

Front

Which of the following might be good advice to give a friend who is struggling to get going with a personal budget? Begin by keeping detailed information about all expenses and net income, give yourself a ‘cheat day’ after avoiding online shopping all week, spend the most you can afford on budgeting software or programs which will absolutely all the work for you, list all the fixed expenses and pay those first, saving the variable expenses for last if they have enough money to pay them

Back

list all the fixed expenses and pay those first, saving the variable expenses for last if they have enough money to pay them