Understanding Personal Finance: Ch 18-2 Budgeting and Credit
Answer the Following question by picking the correct answer
Question 1
What is a personal budget?
A plan for making and spending money
A list of financial goals
A record of past financial transactions
A government's financial plan
Question 2
What does the balance in a budget represent?
The amount of money left over after subtracting expenses from income
The total amount of money spent on expenses
The amount of money borrowed from a bank
The total amount of money received as income
Question 3
What is a deficit in terms of budgeting?
The total amount of money saved
The initial amount of money available for budgeting
A negative balance
A surplus of income over expenses
Question 4
What is credit?
A direct payment for goods and services
The amount of money in a savings account
A financial reward for saving money
Permission to pay later for goods or services obtained today
Question 5
What is the APR in terms of credit?
The monthly interest rate charged on a loan
The annual cost of credit expressed as a percentage of the amount borrowed
The total amount of credit available to a borrower
The fee a bank charges for managing a checking account
Question 6
What is collateral in the context of borrowing?
The total amount of money that can be borrowed
Property pledged as security for a loan
The difference between the loan amount and the interest
A fee charged for late payment on a loan
Question 7
Which of the following is a benefit of using credit?
Which of the following is a benefit of using credit?
Allows you to obtain something you want without waiting to save the entire purchase price
Reduces the total cost of expensive items
Guarantees an increase in your income
Question 8
What is a credit rating?
A government assessment of financial institutions
A list of all the credit cards owned by an individual
An estimate of a borrower's ability to repay a loan
The maximum amount of money a person can borrow
Question 9
Which of the following is a source of credit?
Banks and credit unions
Insurance policies
Debit card companies
Employment income
Question 10
What should a borrower consider when taking out a loan?
The APR and how it might change over time
The popularity of the lender among borrowers
The number of loans the lender has given out
The color and design of the credit card
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