Introduction to Business

Section 1: Credit Essentials

Self-Checks

1.
The type of credit that people use for personal reasons is called _______ credit.
A)consumer
B)individual
C)personal
D)retail
2.
Credit used by a manufacturer to buy raw materials is called _______ credit.
A)commercial
B)contract
C)long-term
D)multi-purpose
3.
A _______ is a measure of a person's ability and willingness to pay debts on time.
A)credit limit
B)credit line
C)credit rating
D)credit scorecard
4.
In today's society using credit is _______ .
A)difficult
B)routine
C)time consuming
D)uncommon
5.
Credit _______ the growth of our economy.
A)contributes to
B)controls
C)does not impact
D)stifles
6.
If you buy something on credit and take six months to pay for it, your total payments will _______ the original purchase price.
A)be equal to
B)be less than
C)be more than
D)not be affected by
7.
If a consumer has a $10,000 credit limit on a credit card and an outstanding balance of $7,500, the cardholder can charge _______ more to the card.
A)$2,500
B)$7,500
C)$10,000
D)$17,500
8.
When you use a credit card, it is money you _______ .
A)owe
B)own
C)need
D)save
9.
Late or missed payments to credit card companies _______ your credit rating.
A)do not affect
B)limit
C)lower
D)raise
10.
When businesses borrow money they often pass along the cost of interest to consumers in the form of _______ .
A)finance charges
B)higher prices
C)interest and fees
D)lower wages
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