Chapter 18 - Lesson 2

property or other valuable item that a borrower pledges as security for a loan

the money you spend on everything

when income is more than expenses

the money you earn

to pay by using borrowed money

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.

The most common source of credit today in a(n)...

• auto loan.

• bank loan.

• credit card.

• store layaway plan.