AnswersCMS 2026-2027 Economics and Personal Finance CREDIT RECOVERYMoney and Credit Management

Practice Test Answers

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1
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Which three items was she referring to?

A
food, transportation, and clothing
B
housing, medical, and food
C
housing, clothing, and savings
D
transportation, savings, and housing
2
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What is most likely Yuri’s motivation behind buying the pricier pair?

A
emotional spending
B
greedy spending
C
conspicuous consumption
D
confused sense of needs and wants
3

A mortgage is a legal agreement between a borrower and a

A
wealthy relative.
B
family court judge.
C
city agency.
D
bank.
4

Why were savings and loans (S&Ls) originally established?

A
to help people invest in the stock market
B
to help people invest in small businesses
C
to help people save money
D
to help people buy homes
5

Companies report people to credit agencies if they

A
use large amounts of credit at once.
B
borrow too much money.
C
fail to use different types of credit.
D
fail to pay their bills on time.
6

What is the definition of liability?

A
the amount a consumer must pay after an incident before the insurance company starts paying
B
a responsibility to pay for or fix a problem
C
the monthly amount paid for insurance
D
intentionally destroying something in order to collect insurance
7

A down payment is usually what percentage of the asking price of a home?

A
20–50 percent
B
5–20 percent
C
0–5 percent
D
50–75 percent
8

Yuri wants to pay for his new chair using a check. What must he consider before using that method of payment?

A
Yuri must know the interest rate on a furniture loan.
B
Yuri must check his credit card balance.
C
Yuri must check his credit history.
D
Yuri must be sure he has enough left in his checking account for any expenses and automatic payments.
9

What does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?

A
It shows that the owner is willing to budget for short-term financial risks to avoid long-term risks.
B
It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.
C
It shows that the owner is willing to share ownership of the business to reduce financial risk.
D
It shows that the owner expects financial risk and is eliminating it by making an insurance company liable.
10

Jessica is trying to get a credit card. She has a credit score of 790. How is Jessica’s lender likely to view this credit score?

A
Jessica is high risk but will not pay her outstanding balances on time.
B
Jessica is low risk but will not pay her outstanding balances on time.
C
Jessica is low risk and will pay her outstanding balances on time.
D
Jessica is high risk and will pay her outstanding balances on time.
11

What are possible advantages and disadvantages of using automatic withdrawal to pay bills? Choose four correct answers.

A
avoiding late payment fees
B
having to pay a fee for the service
C
having to share your account information
D
not having to keep track of the balance in a checking account
E
possible overdraft fees if there is not enough money in the account to cover the payment amount
F
not having to find a stamp and a mailbox
G
not knowing when the payment will be taken out of your account
12

A refrigerator is priced at 1 dollars comma 250 There are two options offered to reduce the price: either a 25 percent discount off the price or a rebate of 300 dollars Which is the better choice, and what is the extra amount saved?

A
The rebate is better; it saves 75 dollars more.
B
The rebate is better; it saves 12 point 5 0 dollars more.
C
The 25 percent discount is better; it saves 12 point 5 0 dollars more.
D
The 25 percent discount is better; it saves 75 dollars more.
13

Which is considered a good credit practice?

A
Make late payments.
B
Borrow more than one can afford to repay.
C
Use the credit card with the highest interest rate.
D
Pay more than the minimum amount that is due.
14

Which describes the difference between a personal loan and a credit card?

A
Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow.
B
Personal loans are secured for small purchases, while credit cards are unsecured loans for large amounts.
C
Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases.
D
Credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow.
15

Credit unions differ from retail banks because they are

A
owned by their members.
B
owned and managed by private corporations.
C
owned by their employees.
D
owned by shareholders who purchased stock.
16

Which detail is most likely to give consumers a false sense of security about using Edgozene?

A
for a limited time
B
our proven supplement
C
no other diet pill offers
D
two bottles for 29 point 9 5 dollars

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