Unit 11: Financial Literacy

John is deciding whether to use a debit card or a credit card to purchase a $50 remote control helicopter. Which statement best describes the card John should use to make his purchase?

• He should use a credit card, because it withdraws the money from his bank account automatically.

• He should use a credit card, because it can withdraw money from a bank account as purchases are made.

• He should use a debit card, because it is used like cash or checks.

• He should use a debit card, because it is used like a personal short-term loan.

Ms. Versini applied for a car loan from a bank. Which statement best describes the importance of Ms. Versini’s credit report to the bank?

• The report shows the likelihood that Ms. Versini will pay back the entire loan on time.

• The report shows the highest level of education that Ms. Versini has reached.

• The bank gives higher interest rates to people with higher credit scores.

• The bank gives partial loans to people with strong credit.

Which list contains information that is provided on a credit report?

• Number of on-time payments, number of early payments, number of late payments

• Current annual income, income from previous job, income from first job

• Number of traffic tickets received, claims made to insurance companies

• Amount of money paid using cash for groceries, gas, and children’s allowances

A portion of Ashlyn's check register is shown. Based on the information, what is the ending balance?

• $-130.65

• $2,216.10

• $2,279.95

• $1,141.45

Which information would typically appear on a consumer's credit report?

• The cost of tuition at the consumer's chosen college.

• The name of the consumer's employer.

• The balance owed on the consumer's credit cards.

• The value of the consumer's home.

Susanne is going to college and was informed that she will get a grant to pay for her tuition. Which statement describes a grant?

• Money that a student receives in exchange for work

• Money that a student must pay back when he or she graduates

• Money that a student has started saving well before the start of college

• Money that a student receives based on need and does not need to pay back

Mark needs to open a bank account to get a debit card so he can withdraw cash and pay for online transactions. The table shows some fees that different financial institutions charge for services related to this type of account.

Based on the information given in the table, which financial institution should Mark use to get a debit card to withdraw cash?

• Park Bank

• Village Bank

• Great Bank

• All Bank

Ken says that the information on his credit report can be retained for only 1 year. Is Ken correct?

• Yes, because the consumer chooses how long credit report information is retained.

• No, because most credit report information is retained for 7 years.

• Yes, because most credit information is updated monthly.

• No, because all credit report information is retained indefinitely.

Which statement describes a value of a positive credit report to a borrower?

• Having extended periods to pay off a loan

• Getting lower interest rates when applying for a loan

• Getting discounts when buying expensive items

• Making an extra payment on a credit payment schedule

Estimated average annual salaries and minimum levels of education for different occupations are shown in the table.

Based on the information in the table, which statement is true?

• The minimum level of education required for a physician assistant is less than the minimum level of education for a firefighter and a lawyer.

• The estimated average salary of an accountant is less than a lawyer but greater than a physician assistant.

• For the jobs listed in the table, as the minimum level of education increases, the estimated average salary increases.

• For the jobs listed in the table, as the minimum level of education increases, the estimated average salary decreases.