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Throck Eco ch 3-4
Ch 3-4 test review
| Question | Answer |
|---|---|
| any person or group who buys or uses goods and services to satisfy personal needs and wants | consumer |
| The ability to consume depends on... | a person's income |
| money that a person has left after all taxes have been paid | disposable income |
| necessities come out of what type of income | disposable |
| income left over for luxury items | descretionary |
| What is the first decision a consumer must make? | whether ot buy an item or not while considering trade off and opportunity costs |
| How is the resource of time being spent while making a decision? | you invest time in researching products to make an informed decision |
| What is the choice that has the greatest perceived value? | rational choice |
| What type of advertising attempts to show one product is superior to the rest? | competitive advertising |
| What type of advertising benefits consumers by giving price, quality and special features of a product? | Informative advertising |
| a type of false or deceptive advertising where customers are lured in with one item and then pressured to buy a more expensive one is known as what? | "bait and switch" |
| Deciding where to buy an item and which brand to buy is known as | comparison shopping |
| Products that have no recognizable logo and are usually cheaper are known as what | generic brands |
| Products that have a recognizable logo and backed by major companies are known as what? | brand name products |
| What is the movement to educate buyers about thier purchases and to deman better products called? | Consumerism |
| What can happen to products that are sold but later found to be dangerous, such as the curise control switch on millions of Ford vehicles? | recalled |
| What federal agency protects against monopolies, price fixing, false advertising and the labeling of products and violations against consumer credit laws? | Federal Trade Commission |
| Receiving funds either directly or indirectly to buy products with a promise to repay later is known as? | credit |
| Anytime you recieve credit, you are going into what? | debt |
| Good meant to last more than 3 years are known as? | durable goods |
| WHat happens to the amount of interest paid on installment loans when the number of months you pay back in is increased? | increases |
| What happens to total amount of money you repay when the number of installments is decreased? | decreases |
| What is the most common type of American debt? | mortgages |
| When you use your debit card, are you using credit? | No- it is an electronic transfer like a check |
| How do you find the finance charge for a $15,000 loan at 9.5% APR? | you multiply 15,000 by .095 |
| What type of institution is owned by its members and make loans? | Credit Union |
| What type of institution takes over installment debts from stores and adds fees for collecting the debt? | finance company |
| What back major credit cards such as Visa and Mastercard? | banks, not finance companies |
| What is the total cost of credit expressed in dollars, and includes annual fees? | finance charge |
| What is the cost of credit expressed in a percentage over a year? | Annual percentage rate (APR) |
| What is the amount of money a borrower must pay to use someone else's money? | interest |
| This is a type of calculation of interest based on the balance on day 1. Makes no difference if you pay off the balance this month, you will still pay finance charges | Previous Balance |
| Type of calculation where no finance charge is collected if balance is paid in full; you only pay interest on what is not paid by the end of the month | Past Due Balance |
| What organization checks your credit rating and decides if you are a risky or safe candidate for credit? | a credit bureau |
| If you have a poor credit rating, what type of interest rates are you likely to recieve? | high |
| What is necessary for secrued loans and can be taken if you do not pay your debt? | collateral |
| What do we call loans not backed by collateral, but only a promise to repay? | unsecure loans |
| What are state and federal laws called that restrict the amount of interest you can be charged? | usury laws |
| What law states that a person cannot be denied credit on the basis of gender, race, religion, national origin, marital status or age? | Equal Credit Opportunity Act |
| What act gave the government greater power in regulation credit agencies and protecting consumers? | The Truth in Lending Act |
| The inability to pay based on your income results in filing what in court? | bankruptcy |
| If you file bankruptcy, how many years will you be without the ability to use credit? | 10 |
Created by:
davislauren
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