Debt, Credit and year 9 Economics

Which of the following is the best definition of debt?

• An arrangement to borrow money and repay it later

• The amount owed by a borrower to the lender

• A legal arrangement to buy property

• Money owed that does not improve financial situation

What does credit allow you to do?

• Increase your net worth

• Borrow money now and repay it later

• Buy property with a bank loan

• Owe money that does not improve your financial situation

What is a mortgage?

• A type of bad debt

• An arrangement to borrow money and repay it later

• A legal arrangement to buy property with a bank loan

• Money owed by a borrower to the lender

Which of the following is considered 'good' debt?

• Credit card debt

• Car loans

• Study loans or a home loan/mortgage

• Money owed that does not improve financial situation

What is 'bad' debt?

• Debt that increases your net worth

• Money owed that does not improve your financial situation

• An arrangement to borrow money and repay it later

• A legal arrangement to buy property

What is the largest source of household debt in Australia?

• Mortgages for family homes

• Car loans

• Study loans

• Credit cards

Which of the following is NOT a common source of household debt in Australia?

• Mortgages

• Loans for investment properties

• Star Wars Merchandise

• Credit cards

What is a competitive advantage?

• Anything that places a firm in a better position than its competitors.

• A strategy to increase employee salaries.

• A method to reduce product quality.

• A way to increase production costs.

Which of the following is a source of competitive advantage?

• Cost leadership

• Employee dissatisfaction

• Increased production time

• Higher product prices

What does cost leadership involve?

• Providing a product at a lower price than the competition

• Increasing the cost of production

• Reducing product quality

• Offering fewer product options