True/False
Indicate whether the statement is true or
false.
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1.
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It is the responsibility of the consumer to make sure that products are used
according to directions.
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2.
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Dispute resolution programs are more costly alternatives than going to
court.
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3.
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People who share the same values may have different standards.
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4.
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A statement such as “This is the best cold remedy on the market” is
factual in nature.
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5.
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If an advertised “miraculous” product sounds too good to be true, it
probably is.
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6.
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News reports about the results of scientific studies are generally very
detailed.
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7.
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Some waste products in landfills can release poisons into the water
supply.
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8.
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A small percentage of people have more than one career in their lifetime.
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9.
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The desire for personal satisfaction is a common reason for starting a new
career.
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10.
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The financial rewards of owning a business can be great.
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11.
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At an interview, you should return a handshake with a firm grip.
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12.
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The best way to develop leadership skills is to take on roles of increasing
responsibility.
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13.
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A mentor is someone who acts as an informal teacher for a new employee.
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14.
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An employee should give at least two weeks notice before resigning.
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15.
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The government acts to give industries an incentive to avoid polluting the
environment.
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16.
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Public goods and services are those that federal, state, and local governments
provide to citizens.
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17.
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Employers and employees pay equal amounts of Social Security tax.
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18.
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Raising the reserve requirement increases the money supply.
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19.
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Fed policies affect interest rates that financial institutions pay to
consumers.
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20.
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Increasing the money supply encourages the creation of new jobs.
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21.
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If the value of the U.S. dollar is high, exports from the United States tend to
increase.
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22.
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Employer’s usually don’t provide benefits to temporary
employees.
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23.
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Tax planning can help you reduce the amount of tax you owe.
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24.
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One benefit of financial planning is that it can reduce or eliminate the need to
use credit.
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25.
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If you charged $2,000 in vacation expenses on your credit card, your net worth
would increase.
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26.
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Users of online banking services may be able to schedule bill payments to be
made at a future date.
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27.
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A disadvantage of paying bills online is that payments take longer to
process.
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28.
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Some software companies offer free demos that customers can download and try
out.
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29.
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Fixed expenses are often the easiest expenses to cut.
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30.
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When you move, you should provide your new address to your previous post
office.
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31.
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All financial advisors have passed a rigorous examination.
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32.
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You should avoid hiring a financial advisor who refuses to provide information
about credentials, services, and fees in writing.
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33.
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Some financial institutions offer better rates and fees if you maintain a
certain balance or combination of accounts.
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34.
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When banking by telephone, you can access your accounts by using a touchtone
keypad or voice activation.
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35.
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You should wait one week to report a lost or stolen debit card.
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36.
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A borrower must repay the original amount borrowed, plus interest paid for the
use of the creditor’s money.
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37.
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Secured credit is generally more difficult for customers to obtain than
unsecured credit.
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38.
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Credit used for personal purposes is called commercial credit.
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39.
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To offset credit costs, many businesses increase their prices.
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40.
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It is a good idea to check your credit report once a month.
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41.
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Credit reporting agencies offer a service that enables consumers to view
anyone’s credit score for a fee.
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42.
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An employer or a prospective employer can check your credit report without your
consent.
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43.
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You’re likely to spend more in the long run if you save up for a new coat
instead of buying it on credit.
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44.
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To reap the benefits of a savings account with a high interest rate that
compounds daily, you should withdraw money frequently.
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45.
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Money can be added to or withdrawn from a CD at any time.
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46.
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The higher the interest rate you receive for a savings option, the more
restrictions the account is likely to have.
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47.
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Putting all of your money into one promising investment reduces your
risk.
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48.
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Many people have more than one investment goal.
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49.
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In a Keogh plan, individuals set up their own plans according to federal
guidelines.
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50.
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When estimating the income you will need for retirement, you should factor in
inflation.
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51.
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Stock ownership tends to be a higher-risk investment because of the volatility
of the stock market.
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52.
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An investor should choose stocks from a variety of industries.
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53.
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Prepaying for a funeral guarantees the transfer of your arrangement to another
city.
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54.
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People purchase insurance to protect them from financial loss caused by
property, personal, and liability risks.
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55.
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You can buy insurance to protect you financially in case your neighbor’s
home burns down.
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56.
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When you apply for auto insurance, the company might ask you about previous
accidents to determine if you are insurable.
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57.
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Living in a large city and driving many miles to work each day will keep auto
insurance premiums low.
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58.
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Drivers over age 65 have more auto accidents than any other group.
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59.
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An endorsement can add flood insurance coverage to a standard home insurance
policy.
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60.
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Consumers rarely benefit from advertising, but advertising always benefits the
advertisers.
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61.
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Advertising can help consumers save money.
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62.
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The FTC protects consumers by providing standards that advertisers must follow
and by monitoring national advertising to ensure that ads are fair and accurate.
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63.
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Learning to recognize the persuasive methods advertisers use can help you to
become a wise consumer.
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64.
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Advertisers use humor in ads because they know that people will remember
something that makes them laugh.
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65.
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Items marked “irregular” have major defects that affect their
performance.
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66.
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Factors to consider when evaluating retailers include return and refund
policies, special services offered, and overall reliability.
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67.
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Buying a more expensive item that carries a stronger warranty might be your most
cost-effective choice.
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68.
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Sometimes choosing a higher-priced item is a wise consumer decision.
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69.
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Generics are products that can be found only in a particular chain of
stores.
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70.
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Comparison shopping for services can be more challenging than for products
because the price of a service may be hard to determine.
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71.
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It’s easy to compare the quality of different service providers using
reviews and ratings.
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72.
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A contract should specify who is responsible for getting necessary permits and
cleaning up after the project.
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73.
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New technology can have negative effects on consumer choices.
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74.
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When they are brand new, technology products might have bugs or defects.
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75.
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Although digital wireless service provides more security and better voice
quality than analog, it does not provide access to the Internet.
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Multiple Choice
Identify the choice that best completes the
statement or answers the question.
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76.
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Net pay is the same as
a. | earned pay | c. | overtime pay | b. | hourly pay | d. | take-home pay |
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77.
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Which of the following is a TRUE statement about tariffs?
a. | All tariffs are designed to restrict trade | b. | A tariff is paid by
the exporter | c. | Tariffs discourage consumers from buying due to higher prices | d. | Tariffs lower the
prices consumers pay |
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78.
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Of the following, the action most likely to help boost the economy out of a
recession is
a. | cutting personal taxes | c. | decreasing the money supply | b. | decreasing
government spending | d. | raising
business taxes |
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79.
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A business cycle
a. | occurs every five years | c. | leads to a
depression | b. | includes four phases | d. | reaches a high point called a trough |
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80.
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FICA taxes are another name for
a. | excise taxes | c. | property taxes | b. | income taxes | d. | Social Security
taxes |
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81.
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Characteristics of the American economic system include all of the following
EXCEPT
a. | free enterprise | c. | limited government control | b. | limited consumer
choice | d. | private
property |
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82.
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A scholarship is an important asset for advanced education because it
a. | carries a low interest rate | b. | does not need to be repaid | c. | does not require
evidence of achievement | d. | is granted on the basis of financial
need |
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83.
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A telecommuter is a worker who
a. | communicates with a central office whole working at home | b. | frequently travels
to various cities as part of his or her job | c. | owns and manages his or her own
business | d. | rides public transportation to and from work each day |
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84.
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A good reference on a resume might be any of the following EXCEPT
a. | a family member | c. | a teacher | b. | a past employer | d. | your school
counselor |
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85.
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Planning for a financially secure retirement includes
a. | depending only on the income you will get from Social Security | b. | expecting your
employer to take responsibly for your plan | c. | starting early to give your investments time to
grow | d. | starting your contributions once you have been employed for several
years |
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86.
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The FTC’s Cooling-Off Rule gives consumers three business days to cancel
purchases of $25 or more that are made
a. | at liquidation sales | c. | in the consumer’s own home | b. | by
telephone | d. | in the
seller’s normal place of business |
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87.
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Disadvantages of shopping at home include all of the following EXCEPT
a. | you cannot inspect, touch, or try on merchandise | b. | you have limited
hours available for shopping | c. | you must usually pay shipping charges, even to
return items | d. | you sometimes must wait days or weeks for purchases to be
delivered |
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88.
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All of the following are things you should do AFTER placing an at-home shopping
order EXCEPT
a. | checking your order promptly upon arrival | b. | investigating the
company to find out if they are reliable | c. | keeping a record of your
transaction | d. | contacting the company if your order does not arrive within the time
proposed |
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89.
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The recommended size of an emergency fund is ___ times your monthly net
income.
a. | one to two | c. | three to six | b. | two | d. | five to ten |
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90.
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You can deduct money from your bank account to make a purchase by use of a
a. | charge card | c. | debit card | b. | credit card | d. | telephone card |
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91.
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If your ATM card is lost, you should
a. | cancel the last purchase made with the card | b. | move your accounts
to another financial institution | c. | notify the Federal Reserve System within 24
hours | d. | report the loss to the issuing bank |
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92.
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Electronic funds transfer (EFT) refers to
a. | the agency that insures deposits in banks | b. | the movement of
funds by electronic means | c. | the secret code for your
accounts | d. | using an ATM |
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93.
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The three C’s of credit include all of the following EXCEPT
a. | capacity | c. | character | b. | capital | d. | credibility |
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94.
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Rent is an example of
a. | discretionary expense | c. | net expenses | b. | fixed expense | d. | variable
expense |
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95.
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The best description of a budget is
a. | a financial tool for consumers who have very little money | b. | a plan for saving
& spending your money | c. | a set of restrictions on how you can spend your
money | d. | a statement of your assets & liabilities |
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96.
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Financial planning allows family members to
a. | buy more supplies on credit | c. | eliminate energy
bills | b. | buy stocks at bargain rates | d. | prepare for emergency expenses |
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97.
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By January 31, your employer will send you Form ___ showing your total earnings
for the year and the total amount of taxes withheld.
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98.
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Form ___ must be filled out by new employees so that the employer can deduct
the correct amount of tax from pay.
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