AnswersPersonal Finance - EL3403Spending

Spending Answers

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1
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This chart shows the actual pricing history for three items.

Question illustration
A
game system
B
smartphone
C
DVD
D
It's most beneficial to buy all now.
2
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What is advertising used for? Check all that apply.influencing consumer tastestracking product popularityincreasing product awarenesspromoting company brandinggathering data about potential consumers

A
influencing consumer tastes
B
tracking product popularity
C
increasing product awareness
D
promoting company branding
E
gathering data about potential consumers
3

Why might people choose to rent a home rather than buy a home?

A
They have a lot of money saved for a down payment.
B
The property maintenance is the owner's responsibility.
C
The interest rates on equity are too high.
D
They have a long-term commitment to the area.
4

Read the scenario.Raoul has just been promoted to a supervisor’s position, which is a steady job. He likes to enjoy life, take vacations, and change things up every now and then. That’s why he will not have a lot of extra money to spend on repairs and maintenance on his car.

A
buy a used car.
B
lease a used car.
C
buy a new car.
D
lease a new car.
5

Which option below is not a potential risk of purchasing a used car?

A
used cars can require repairs sooner
B
shorter lifespans of the engine and transmission
C
used cars can have lower initial cost
D
unexpected issues may arise
6

What is the purpose of comparison shopping?

A
ensuring you are not buying out of emotion
B
attempting to find the best deal on a product
C
determining whether you truly need a product
D
reading reviews to make sure a product is good
7

Which details apply to a financing contract? Check all that apply.

A
requires a credit check
B
are always less expensive than using a credit card
C
includes interest rate information
D
requires a signature for rent-to-own agreements
E
can be broken at any time
8

Mr. and Mrs. Atoll are planning a party for 10 people and want to make sure they have enough soda for everyone to have two bottles. Which of the following makes the most economic sense?

A
20 bottles of soda at $1.50 each
B
4 six-packs of soda at $5.00 each
C
one case of 24 sodas at $18.50
D
two cases of 24 sodas at $18.50 each
9

When companies spend millions of dollars developing logos and slogans, or use celebrity endorsements to encourage consumers to buy particular products, this is called

A
false advertising.
B
undue influence.
C
product branding.
D
quality assurance.
10

Which activity is done in Step 2 of comparison shopping?

A
Research a product.
B
Assess the purchase objectively.
C
Compare prices and features.
D
Buy a product.
11

Why do prices increase when demand for a product is high?

A
Companies know they can make more money by selling fewer products at higher prices.
B
Companies know that people will be willing to spend more to get an in-demand product.
C
Companies take advantage of the demand to make people spend more money on excess products.
D
Companies know they can stop production and still make money on sales.
12

Building equity in a home is a good thing because

A
mortgage payments decrease as equity increases.
B
credit scores increase as equity increases.
C
equity in a home increases the homeowner’s net worth.
D
property taxes decrease as equity increases.
13

A monthly fixed rate mortgage payment

A
could change.
B
never changes.
C
increases annually.
D
decreases annually.
14

[BLANK]

A
increases
B
decreases
C
stays the same
15

The point at which it is no longer advantageous to buy in bulk is known as marginal

A
cost.
B
tipping.
C
benefit.
D
error.
16

Read the scenario.Brad has a steady job, earns a solid income, and plans to live in a nearby city for the long term. He is looking to purchase both a car and a place to live, and he is very interested in building up equity and credit.

A
buying both a car and a home
B
leasing both a car and home
C
buying a car and leasing a home
D
leasing a car and buying a home

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Spending Answers — Personal Finance - EL3403