Economics Ch 18 Test study guide

Responsible credit card use

• does not affect your credit score.

• includes using credit cards for impulse buys.

• means paying only the minimum payment.

• requires a full understanding of the APR.

What is a budget?

• the ability to pay later for something that you receive today

• the amount of money left over after subtracting expenses

• a careful record of all the money that you earn and spend

• a monthly payment that teaches you financial discipline

Which consumer right protects the consumer from being left out of the law-writing process?

(a)  

• the right to be heard
• the right to choose

• the right to redress

• the right to safe products

Consumers have a responsibility to

• buy the products and brands that they like.

• comparison shop.

• prove that products are safe.

• provide a variety of products.

Which of the following is a drawback of having credit?

• analyzing your financial situation to see whether you can afford to charge

• learning financial discipline by making monthly payments

• obtaining something you want before you have all the money to pay for it

• spending more than you can afford by using easily available credit

If you own stock in a company and the company does well,

• the company will probably issue a bond.

• the company will probably pay back their bonds.

• the price of a share of stock will probably go down.

• the price of a share of stock will probably go up.

After making a budget, and analyzing your data, you decide that you can afford to buy a new bicycle. Your budget probably showed that you had a

• balance.

• deficit.

• disposable income.

• surplus.

One purpose of saving money is to

• collect enough money for a major purchase.

• decrease interest when paying back a loan.

• increase risk when investing for the long term.

• make a plan for expenditures and income.

You are making a monthly budget. Your budget includes $40 that you earned from babysitting, $16 that you earned from your allowance, $30 that you spent on entertainment, and $25 that you spent on clothing. What is your balance?

• negative $1

• negative $55

• positive $1

• positive $56

To prevent impulse buying, you should

• buy things that you know that you will tire of quickly.

• make a shopping list and stick to it.

• purchase items displayed at the checkout counter.

• shop with a friend who has similar tastes.