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Basics Beginner:
Things to Ask Yourself about Large Purchases
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
Which answer is most correct regarding the use of credit when making a major purchase?
Choose wisely. There is only one correct answer.
Because of the high interest rates, credit cards should never be used.
Credit cards can be used to establish credit or to reestablish credit.
Credit cards might be used when an emergency necessitates making a purchase immediately.
B and C
B and C. All efforts should be made to avoid using credit cards, but there are occasions when they can and should be used.
2.
It can be wise for an inexperienced credit card user to make a large purchase with a credit card.
Choose wisely. There is only one correct answer.
True
False
True. The purpose of making such a purchase is to establish credit; the user should make sure to have to funds to pay it off.
3.
Which of the following are conditions for determining whether a purchase is a major one?
Choose wisely. There is only one correct answer.
If it will be of value for a long time
If it exceeds a certain dollar amount that you set
If it is not currently in your budget
All of the above
All of the above. People use any or all of these to determine whether something they want to buy qualifies as a major purchase.
4.
Which of the following are advantages of buying used rather than new?
Choose wisely. There is only one correct answer.
You can still get the bells and whistles that you want.
You can afford your major purchase now rather than waiting until you have saved enough.
You can avoid using credit for your purchase.
All of the above
All of the above. There are even more advantages than these; for example, you might still get some kind of a warranty.
5.
A luxury item is typically a _______.
Choose wisely. There is only one correct answer.
Need
Want
Neither
Want. Luxury items are typically not necessities and are therefore wants.
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DONE