U5 Managing Credit Test

What does "purchasing power" refer to?

• The ability to buy goods and services

• The total amount of money in circulation

• The interest rate on a loan

• The value of a country's currency

What is the "balance due" on a credit card statement?

• The minimum payment required

• The total amount owed

• The interest charged

• The available credit limit

What does "deferred billing" mean?

• Paying bills immediately upon receipt

• Delaying payment until a later date

• Paying bills in installments

• Receiving a discount for early payment

Which of the following best describes a "closed-end loan"?

• A loan with no fixed repayment schedule

• A loan that can be borrowed again once repaid

• A loan with a fixed amount and repayment period

• A loan with a variable interest rate

What is a "variable rate"?

• An interest rate that remains the same throughout the loan term

• An interest rate that changes based on market conditions

• A fixed monthly payment

• A penalty fee for late payments

What is a "fixed rate"?

• An interest rate that changes periodically

• An interest rate that remains constant throughout the loan term

• A rate that varies with the prime rate

• A rate that is adjusted annually

Why is it important to read the "fine print" in a contract?

• It contains the main terms of the agreement

• It includes detailed information about fees and conditions

• It provides a summary of the contract

• It lists the benefits of the agreement

What is Chapter 13 bankruptcy?

• Liquidation of assets to pay off debts

• Reorganization of debts with a repayment plan

• Complete discharge of all debts

• Voluntary dismissal of bankruptcy

What is Chapter 7 bankruptcy?

• Liquidation of assets to pay off debts

• Reorganization of debts with a repayment plan

• Complete discharge of all debts

• Voluntary dismissal of bankruptcy

What is the purpose of the Fair Credit Reporting Act (FCRA)?

• To regulate the interest rates on loans

• To ensure the accuracy and privacy of credit reports

• To provide free credit scores to consumers

• To limit the amount of debt a consumer can have