1. If a consumer makes monthly payments of $250 to pay off a car loan, what type of credit is she
using?
(1 point)
nonrevolving
revolving
short term
unsecured
2. Caitlin wants to buy an airline ticket, but she’s uncomfortable taking that much cash to the
counter at the airport. Instead, she uses her credit card. Which advantage of credit is being
demonstrated here?
(1 point)
emergencies
building a credit line
protection of purchases
purchase power
3. Which is an example of a variable expense category? (1 point)
car payment
gym membership
birthday gifts
insurance
4. What is a benefit of using a financial tool to track your budget? (1 point)
It provides you discounts for the things you buy most often.
It gives you a visual of your income and expenses.
It keeps all of your personal information protected.
It makes banks more likely to offer you low-interest rates.
answers
b
d
a
c
To answer these questions, you can analyze the given options and choose the most appropriate answer by considering the characteristics of each category. Here's how you can determine the answers for each question:
1. If a consumer makes monthly payments of $250 to pay off a car loan, what type of credit is she using?
To figure out the type of credit being used, let's analyze the options:
- Non-revolving credit refers to a loan with a set amount and fixed repayment terms. This type of credit matches the scenario where the consumer is making regular monthly payments to pay off a car loan.
- Revolving credit refers to credit that can be used repeatedly (e.g., credit cards), with a balance that changes based on payments and usage. This does not align with the given scenario.
- Short-term credit refers to credit obtained for a short period, typically 12 months or less. The car loan in the scenario does not indicate a short repayment term.
- Unsecured credit refers to credit not backed by collateral or assets. The scenario does not mention any collateral.
Based on the analysis, the most appropriate answer is option b) non-revolving.
2. Caitlin wants to buy an airline ticket, but she's uncomfortable taking that much cash to the counter at the airport. Instead, she uses her credit card. Which advantage of credit is being demonstrated here?
To determine the advantage of credit being demonstrated, let's review the options:
- Emergencies: While emergencies could be a valid reason to use credit, the scenario does not mention an emergency situation.
- Building a credit line: The scenario does not indicate Caitlin's intention to build her credit here.
- Protection of purchases: This option aligns with Caitlin's concern of carrying a large amount of cash, as credit cards offer protection against loss or theft.
- Purchase power: This advantage is demonstrated as Caitlin can make a significant purchase (buying an airline ticket) without relying solely on her available cash.
Based on the analysis, the most appropriate answer is option d) purchase power.
3. Which is an example of a variable expense category?
To identify the variable expense category, let's consider the options:
- Car payment: This category typically has a fixed monthly amount and does not vary based on usage. It is an example of a fixed expense rather than a variable one.
- Gym membership: This expense can vary depending on usage. If the membership is charged based on visits or classes attended, it could be considered a variable expense.
- Birthday gifts: The amount spent on birthday gifts can vary depending on the recipient and the person's budget, making it a variable expense.
- Insurance: Insurance premiums are typically charged as a fixed amount, making it a fixed expense category.
Based on the analysis, the most appropriate answer is option c) birthday gifts.
4. What is a benefit of using a financial tool to track your budget?
To determine the benefit of using a financial tool, let's assess the options:
- It provides you discounts for the things you buy most often: This option does not align with the purpose of a financial tool designed to track budgets.
- It gives you a visual of your income and expenses: A financial tool can provide charts, graphs, or other visual representations to help you understand your income and expenses more clearly.
- It keeps all of your personal information protected: While many financial tools offer security measures, this benefit is not unique to using a financial tool to track your budget.
- It makes banks more likely to offer you low-interest rates: Using a financial tool alone does not directly influence the bank's willingness to offer low-interest rates.
Based on the analysis, the most appropriate answer is option b) it gives you a visual of your income and expenses.
So, the correct answers are:
1. b) non-revolving
2. d) purchase power
3. a) birthday gifts
4. c) it gives you a visual of your income and expenses.
3 and 4 are wrong.
3. D?
4. B?
3. D? - no -- obviously you haven't bothered to find the meaning of variable.
4. B? - yes
Please do not post these questions again.
1. If a consumer makes monthly payments of $250 to pay off a car loan, what type of credit is she using?
Answer: She's using "revolving credit," because she keeps making payments until the loan is completely paid off, like a revolving door of payments.
2. Caitlin wants to buy an airline ticket, but she’s uncomfortable taking that much cash to the counter at the airport. Instead, she uses her credit card. Which advantage of credit is being demonstrated here?
Answer: The advantage being demonstrated here is "purchase power," because with a credit card, Caitlin can make purchases without worrying about carrying a lot of cash and feeling uncomfortable, like a modern-day magician who needs no physical money tricks.
3. Which is an example of a variable expense category?
Answer: "Birthday gifts" is an example of a variable expense category because they tend to vary in amount and frequency, just like the joy of receiving a gift varies based on how much effort the giver put into it.
4. What is a benefit of using a financial tool to track your budget?
Answer: The benefit is that it gives you a "visual of your income and expenses," just like having a comedy show enhances your visual humor experience and makes financial tracking a little less boring.