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-asidesb. / 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-asidesb. / Flexible expenses / d. / none of these
____ 3. Most bills come due _____.
a. / once a week / c. / once a yearb. / once a month / 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 Actb. / 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 Actb. / 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 Actb. / 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 productb. / 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 earningsb. / overtime pay / d. / salary
____ 9. Taxes, insurance, pensions, and other miscellaneous items are _____.
a. / wages / c. / gross earningsb. / commissions / d. / deductions
____ 10. The signature of a payee on the back of a check is a _____.
a. / W-4 form / c. / commissionb. / pay stub / d. / none of these
____ 11. _____ is usually referred to as Social Security.
a. / The Equal Credit Reporting Act (ECRA)b. / The Truth in Lending Act (TLA)
c. / The Federal Insurance Contributions Act (FICA)
d. / none of these
____ 12. Payment based on a certain percentage of sales is called _____.
a. / commission / c. / wagesb. / salary / d. / none of these
____ 13. Payment according to what a worker produces is called _____.
a. / salary / c. / pieceworkb. / 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. / taxesb. / 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. / endorsementb. / W-2 form / d. / W-4 form
____ 16. _____ are people who lend money.
a. / Banks / c. / Credit unionsb. / Creditors / d. / all of these
____ 17. The amount of debt that you can afford to repay each month is _____.
a. / credit history / c. / a multipurpose cardb. / consumer finance / d. / credit capacity
____ 18. A _____ is a record of how you’ve borrowed and repaid debts.
a. / certificate of deposit / c. / multipurpose cardb. / bank / d. / credit history
____ 19. _____ specialize in real estate loans.
a. / Savings and loan banks / c. / Credit unionsb. / Commercial banks / d. / Consumer finance companies
____ 20. _____ usually have stricter lending requirements than other lending institutions.
a. / Banks / c. / Consumer finance companiesb. / Credit unions / d. / none of these
____ 21. _____ specialize in making small loans to borrowers with poor or no established credit.
a. / Banks / c. / Credit unionsb. / Consumer finance companies / d. / Savings and loan companies
____ 22. _____ require membership in order to borrow money.
a. / Banks / c. / Credit unionsb. / 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 / c. / Credit capacitiesb. / Creditors / d. / Multipurpose cards
____ 24. _____ entitles you, as a consumer, to a free credit report every year.
a. / The Equal Credit Opportunity Actb. / 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 cardsb. / revolving charge account cards / d. / none of these
Business Advance Studies - Financial Literacy Pretest
Answer Section
MULTIPLE CHOICE
1. ANS: A PTS: 1 DIF: Medium REF: Page 404
KEY: budget | finances
2. ANS: C PTS: 1 DIF: Medium REF: Page 404
KEY: budget | finances
3. ANS: B PTS: 1 DIF: Easy REF: Page 403
KEY: budget | finances
4. ANS: A PTS: 1 DIF: Difficult REF: Page 401
KEY: finances
5. ANS: B PTS: 1 DIF: Difficult REF: Page 402
KEY: finances
6. ANS: C PTS: 1 DIF: Difficult REF: Page 402
KEY: finances
7. ANS: B PTS: 1 DIF: Medium REF: Page 400
KEY: finances | conflicts
8. ANS: C PTS: 1 DIF: Easy REF: Page 388
KEY: finances
9. ANS: D PTS: 1 DIF: Medium REF: Page 388
KEY: finances | taxes
10. ANS: D PTS: 1 DIF: Easy REF: Page 388
KEY: finances
11. ANS: C PTS: 1 DIF: Medium REF: Page 390
KEY: taxes | finances
12. ANS: A PTS: 1 DIF: Easy REF: Page 389
KEY: finances
13. ANS: C PTS: 1 DIF: Medium REF: Page 389
KEY: finances
14. ANS: C PTS: 1 DIF: Easy REF: Page 389
KEY: taxes | finances
15. ANS: D PTS: 1 DIF: Difficult REF: Page 389
KEY: taxes
16. ANS: B PTS: 1 DIF: Medium REF: Page 397
KEY: finances
17. ANS: D PTS: 1 DIF: Medium REF: Page 398
KEY: finances
18. ANS: D PTS: 1 DIF: Easy REF: Page 398
KEY: finances
19. ANS: A PTS: 1 DIF: Medium REF: Page 398
KEY: finances
20. ANS: A PTS: 1 DIF: Difficult REF: Page 398
KEY: finances
21. ANS: B PTS: 1 DIF: Medium REF: Page 398
KEY: finances
22. ANS: C PTS: 1 DIF: Medium REF: Page 398
KEY: finances
23. ANS: D PTS: 1 DIF: Easy REF: Page 399
KEY: finances
24. ANS: B PTS: 1 DIF: Difficult REF: Page 401
KEY: finances | consumer
25. ANS: C PTS: 1 DIF: Easy REF: Page 399
KEY: finances