1st Semester Interim Study Guide

Which of these best describes credit?

• the goods owned by one party

• the money earned by working full time

• the money spent out of a checking account

• the promise of future payment

Which of the following best defines the difference between credit and debt?

• Credit measures ability to buy, while debt means money owed.

• Credit measures money owed, while debt means money available.

• Credit measures ability to sell, while debt means money earned.

• Credit measures ability to buy, while debt means money available.

Jacob purchased a car and received a low interest rate because he had “good credit.” What does “good credit” mean?

• Jacob has not made many big purchases.

• Jacob has a lot of money in the bank.

• Jacob has enough debt to make him pay.

• Jacob has a history of paying bills on time.

Lacey could not get a loan because she is in debt and has “bad credit.” What is the most likely meaning of “bad credit”?

• Lacey does not owe money and does not have a history of paying on time.

• Lacey owes money for purchases and has a history of paying on time.

• Lacey does not owe money and has a history of paying on time.

• Lacey owes money for purchases and does not have a history of paying on time.

Karen did not pay back a loan, what can happen to her?

• She can be sued and ordered to pay the debt.

• She can purchase more items.

• Her credit goes from bad to good.

• She can be issued more credit to pay the debt.

Jason purchases shares of stock in a computer company with the expectation that this transaction will be profitable in the future. This is an example of

• earning money.

• saving.

• investing.

• wasting money.

Dayna wants to save money. Which of the following must take place if Dayna wants to save money?

• Dayna must spend all of her income.

• Dayna must own a house.

• Dayna must spend less than her income.

• Dayna must be extremely wealthy.

What is one advantage of saving money in a savings account at a bank?

• The money will be safe, but you will never be able to withdraw it.

• The bank will spend your money on other things, and you will probably lose most of it.

• The money will be hidden from the IRS, and you will not have to pay taxes on it.

• The money will earn interest, meaning the bank will pay you for having your money there.

What is a reason why saving money is a good idea?

• People need to be selfish and keep all of their money to themselves.

• People will have less financial stability if they have a great deal of savings.

• People will live longer, happier lives if they have savings.

• People will have money available for things they want or need in the future.

Which of the following is an example of someone earning income?

• Mark plays video games with his brother.

• Lisa's neighbors pay her to babysit their children.

• Bobby goes to the library and does his homework.

• Michelle walks her dog in the park.