Business Advance Studies - Financial Literacy Pretest

Business Advance Studies - Financial Literacy Pretest Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Rent, house payments, and installment loans are examples of _____. a. fixed expenses c. set-asides b. flexible expenses d. none of these ____ 2. _____ are amounts of money that you accumulate in your budget for special purposes, such as birthdays and holidays. a. Fixed expenses c. Set-asides b. Flexible expenses d. none of these ____ 3. Most bills come due _____. a. once a week b. once a month c. once a year d. none of these ____ 4. According to _____, a lender is required to notify you within 30 days after you have submitted a completed loan application whether the application has been approved. a. the Equal Credit Opportunity Act c. the Truth in Lending Act b. the Fair Credit Reporting Act d. none of these ____ 5. _____ requires that a credit agency show you your file if you are refused credit for a specific reason related to your credit report. a. The Equal Credit Opportunity Act c. The Truth in Lending Act b. The Fair Credit Reporting Act d. none of these ____ 6. _____ limits your liability for credit cards that are lost or stolen to $50 per card if you properly and promptly notify the card issuer of the loss. a. The Equal Credit Opportunity Act c. The Truth in Lending Act b. The Fair Credit Reporting Act d. none of these ____ 7. In the case of defective goods or services, you may withhold a credit card payment if _____. a. you don’t like the product b. the cost in dispute with a merchant totals more than $50 c. your money is needed for life-supporting items d. none of these ____ 8. Your total earnings before deductions are called _____. a. commissions c. gross earnings b. overtime pay d. salary ____ 9. Taxes, insurance, pensions, and other miscellaneous items are _____. a. wages c. gross earnings b. commissions d. deductions ____ 10. The signature of a payee on the back of a check is a _____. a. W-4 form c. commission b. pay stub d. none of these ____ 11. _____ is usually referred to as Social Security. a. b. c. d. The Equal Credit Reporting Act (ECRA) The Truth in Lending Act (TLA) The Federal Insurance Contributions Act (FICA) none of these ____ 12. Payment based on a certain percentage of sales is called _____. a. commission c. wages b. salary d. none of these ____ 13. Payment according to what a worker produces is called _____. a. salary c. piecework b. commission d. none of these ____ 14. Payments that all citizens are required by law to make to help pay the costs of government services are called _____. a. deductions c. taxes b. commissions d. none of these ____ 15. A legal statement that authorizes your employer to deduct taxes from your paycheck and to pay them to the government for you is a(n) _____. a. deduction c. endorsement b. W-2 form d. W-4 form ____ 16. _____ are people who lend money. a. Banks b. Creditors c. Credit unions d. all of these ____ 17. The amount of debt that you can afford to repay each month is _____. a. credit history c. a multipurpose card b. consumer finance d. credit capacity ____ 18. A _____ is a record of how you’ve borrowed and repaid debts. a. certificate of deposit c. multipurpose card b. bank d. credit history ____ 19. _____ specialize in real estate loans. a. Savings and loan banks b. Commercial banks c. Credit unions d. Consumer finance companies ____ 20. _____ usually have stricter lending requirements than other lending institutions. a. Banks c. Consumer finance companies b. Credit unions d. none of these ____ 21. _____ specialize in making small loans to borrowers with poor or no established credit. a. Banks c. Credit unions b. Consumer finance companies d. Savings and loan companies ____ 22. _____ require membership in order to borrow money. a. Banks c. Credit unions b. Consumer finance companies d. Savings and loan companies ____ 23. _____ are accepted by most stores, restaurants, hotels, and other establishments to pay for goods and services.. a. Credit unions b. Creditors c. Credit capacities d. Multipurpose cards ____ 24. _____ entitles you, as a consumer, to a free credit report every year. a. The Equal Credit Opportunity Act b. The Fair and Accurate Credit Transaction Act c. The Fair Credit Reporting Act d. none of these ____ 25. MasterCard, Visa, and American Express are examples of _____. a. single-purpose credit cards c. multipurpose credit cards b. revolving charge account cards d. none of these Business Advance Studies - Financial Literacy Pretest Answer Section MULTIPLE CHOICE 1. ANS: KEY: 2. ANS: KEY: 3. ANS: KEY: 4. ANS: KEY: 5. ANS: KEY: 6. ANS: KEY: 7. ANS: KEY: 8. ANS: KEY: 9. ANS: KEY: 10. ANS: KEY: 11. ANS: KEY: 12. ANS: KEY: 13. ANS: KEY: 14. ANS: KEY: 15. ANS: KEY: 16. ANS: KEY: 17. ANS: KEY: 18. ANS: KEY: 19. ANS: KEY: 20. ANS: KEY: 21. ANS: A PTS: budget | finances C PTS: budget | finances B PTS: budget | finances A PTS: finances B PTS: finances C PTS: finances B PTS: finances | conflicts C PTS: finances D PTS: finances | taxes D PTS: finances C PTS: taxes | finances A PTS: finances C PTS: finances C PTS: taxes | finances D PTS: taxes B PTS: finances D PTS: finances D PTS: finances A PTS: finances A PTS: finances B PTS: 1 DIF: Medium REF: Page 404 1 DIF: Medium REF: Page 404 1 DIF: Easy REF: Page 403 1 DIF: Difficult REF: Page 401 1 DIF: Difficult REF: Page 402 1 DIF: Difficult REF: Page 402 1 DIF: Medium REF: Page 400 1 DIF: Easy REF: Page 388 1 DIF: Medium REF: Page 388 1 DIF: Easy REF: Page 388 1 DIF: Medium REF: Page 390 1 DIF: Easy REF: Page 389 1 DIF: Medium REF: Page 389 1 DIF: Easy REF: Page 389 1 DIF: Difficult REF: Page 389 1 DIF: Medium REF: Page 397 1 DIF: Medium REF: Page 398 1 DIF: Easy REF: Page 398 1 DIF: Medium REF: Page 398 1 DIF: Difficult REF: Page 398 1 DIF: Medium REF: Page 398 22. 23. 24. 25. KEY: ANS: KEY: ANS: KEY: ANS: KEY: ANS: KEY: finances C PTS: finances D PTS: finances B PTS: finances | consumer C PTS: finances 1 DIF: Medium REF: Page 398 1 DIF: Easy REF: Page 399 1 DIF: Difficult REF: Page 401 1 DIF: Easy REF: Page 399