Economics: Today and Tomorrow © 2012

Chapter 4: Going into Debt

Going into Debt

1
The largest installment of debt in the United States is money people owe _____.
A)on cars
B)on home mortgages
C)on clothes
D)on appliances
2
The benefit of using credit is _____.
A)paying lower prices for expensive durable goods
B)being able to buy and enjoy a good or service now rather than later
C)not going into debt to buy things you want
D)paying interest on borrowed funds
3
To determine which creditor is charging the most for credit, a consumer should compare _____.
A)finance charges
B)annual percentage rates
C)monthly payments
D)length of the credit agreements
4
The credit device that allows a person to make purchases without paying cash and that can be used in many different stores throughout the U.S. is known as a_____.
A)savings and loan
B)charge account
C)credit card
D)finance charges
5
The cost of credit expressed as a yearly percentage is called _____.
A)annual percentage rate
B)annual credit rate
C)charge account
D)credit card
6
A person who has lost control of debt should _____.
A)make minimum payments on credit cards
B)concentrate on paying the high-interest credit cards first
C)borrow additional money to pay off existing debt
D)get someone to co-sign the loans
7
Which of the following is a loan guaranteed only by a promise to repay it?
A)Credit rating
B)Collateral
C)Secured loan
D)Unsecured loan
8
The credit industry is regulated by _____.
A)only the federal government
B)both federal and state governments
C)only state governments
D)financial institutions
9
Why should bankruptcy be considered a last resort to credit problems?
A)It is too expensive to declare bankruptcy easily.
B)It can be difficult to reestablish credit and borrow other funds for 10 years.
C)The interest you earn on your investments will decrease.
D)Consumer finance agencies will make your credit history worse.
10
All of the following companies provide consumers with free annual credit reports EXCEPT_____.
A)Experian
B)EEOC
C)Equifax
D)TransUnion
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