18.2_Budgeting

The three basic parts of a budget are

• Income, costs, and savings

• income, expenses, and balance.

• surplus, collateral, and balance.

• surplus, deficit, and expenses.

Which of the following people is most likely to have a budget deficit?

• a person who earns more than he or she spends

• a person who invests more than he or she saves

• a person who saves more than he or she spends

• a person who spends more than he or she earns

Which of the following is a benefit of credit?

• You can buy things that you really can’t afford.

• You can buy things you want before you can save the entire purchase price.

• You can end up in perpetual debt.

• You can pay interest rates of up to 18 percent.

To have a surplus in your budget, you must have _____.

• the same amount of expenses and income

• more expenses than income

• more income than expenses

• a negative balance

If your monthly budget shows a deficit, you should _______.

• borrow money

• increase spending

• apply for a credit card

• try to spend less or earn more

If you earn the same amount of money as you spend each month, you have a ________.

• positive balance

• negative balance

• balanced budget

• personal budget

The fee charged for using a credit card is called ________.

• APR

• interest

• late fee

• credit rating

When you apply for a credit card, the lender checks your ________.

• credit balance

• credit rating

• down payment

• credit line

Finance companies specialize in making loans to _______.

• banks

• corporations

• small businesses

• individuals

Cars and homes can be purchased on credit.

• True

• False