W!SE HARD TEST

it is usually a good idea to borrow for

• Something that increases in value over time

• The amount needed to pay bills each month

• Anyrhing that will make the person happy

• Anything that the interest rate is low

A person generally pays a lower interest rate on a car loan than on a personal loan because the

• Price of new cars increase each year

• Car is collateral for the loan

• Car is insured

• Loan on the car requires a cosigner

The Federal Reserve System (fed) helps protect depositors and its member banks by setting

• Requirements as to where member bank may advertise their products and services

• Limits on the number of depositors a member bank may have

• Requirements as to the amount of money a member bank must have on deposit

• Limits on how many branches a member bank can have

The government taxes cigarettes in order to raise revenue and to

• Encourage tobacco growing

• Discourage smoking

• Provide money to small store owners

• Pay for product advertising in the U.S.

A person refuses to open a savings account because he worries that the bank will fail and he will lose all of his money. What does this person need to know?

• Banks have to buy insurance to cover the amount of money taken out each day

• Banks by law are not permitted to go bankrupt

• The Fed matches the amount of money banks have on hand

• Accounts are FDIC insured up to $250,000

What is a good strategy to build wealth for the future?

• Pay for goods and services using credit cards

• Pay bills when received and use a checking account

• Deposit money into both savings and investment accounts each month

• Have paychecks automatically deposited into a checking account

When applying for a loan, the higher a person's credit score, the

• Lower the interest rate will be for the loan

• The higher the interest rate will be for the loan

• Longer the payment period will be for the loan

• Shorter the payment period will be for the loan

What needs to be included in a will?

• The name of the beneficiaries

• The cause of death

• Where the will is to be read

• The person's monthly budget

The reason corporations issue bonds is to

• Encourage Americans to save

• Increase their employee salaries

• Borrow money from investors

• Increase the number of their customers

A person should consider paying her monthly bills automatically from her checking account because it

• Eliminates the need for maintaining a monthly budget

• Makes more money available for her to spend

• Ensures her account will never be overdrawn

• Makes it easier to pay bills on time each month