Economics Final Review

Magda is financing her car with a loan. Which statement is accurate?

• Her principal is the car cost minus any down payment

• Her interest rate is the total cost after all payments

• A shorter term means longer repayment time

• Her monthly payment will likely be 4-5% of the car cost

Jaime is creating a budget. Should he use NET PAY or GROSS PAY?

• Use net pay, it’s your earnings minus taxes and deductions.

• Use gross pay, it’s your earnings minus monthly bills.

• Use net pay, it’s your total monthly earnings.

• Use gross pay, it is reported to the government for taxes.

What behaviors can prevent smart investing decisions?

• Staying calm during market downturn

• Buying low and selling high

• Exiting the market because others are doing so

• Investing in a diversified portfolio instead of trying to beat the market

Which statement about credit scores does the bar graph support?

• Credit scores drop as you age due to potential missed payments

• Young people find borrowing difficult due to less payment history

• Young people likely have lower interest rates due to lower credit scores

• Young people get loans at lower interest rates due to timely payments

Which is NOT a characteristic of a secured credit card?

• Credit limit depends on your security deposit

• They lower banks' risk for users with no credit history

• They help build and improve your credit score

• They don’t have a spending limit

How can your friend improve his low credit score?

• Cancel credit cards

• Make payments on time

• Get a car loan

• Check credit score

You bought 10 shares for $45 each and sold them for $80 each. What was your profit?

• Loss of $800

• Profit of $350

• Loss of $450

• Profit of $800

Which is true about fixed and adjustable-rate mortgages?

• Fixed-rate mortgages have a constant payment but increasing interest rate

• Fixed-rate mortgages have a fixed interest rate for a few years, then it fluctuates

• Adjustable-rate mortgages have a fixed interest rate for a few years, then it fluctuates

• Both mortgages work the same but are called different names depending on the institution

Which credit payback strategy leads to the highest overall cost?

• Paying off your credit card bill in full every month

• Paying 20% of your credit card balance every month on time

• Making the minimum payment every month on time

• Making the minimum payment every month with occasional late payment

Which of the following is NOT found in your credit report?

• Credit payment history

• Checking account balance history

• Average age of credit accounts

• Number of active credit accounts