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