Consumer Economics - Major Purchases: Question Preview (ID: 26572)

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Which of the following does the Truth in Lending Act NOT do?
a) Requires lender to state the APR
b) Requires the lender to state the terms of the loan up front
c) Requires the lender to disclose any additional fees you may encounter
d) Requires the lender to offer you the most competitive market interest rate

In terms of auto insurance, what does comprehensive insurance cover you for?
a) Damage to your car in a car accident
b) Damage to another's car in a car accident
c) Damage due to vandalism
d) Medical expenses caused by an motorist without insurance

If you are rear-ended by another driver and nobody was injured, which of the following types of coverage would apply?
a) Property damage liability
b) Bodily injury liability
c) Collision
d) Comprehensive

Which of the following car insurance coverage is required by state law?
a) Collision
b) Comprehensive
c) Bodily Injury Liability
d) Medical Expense

If your deductible increases, what will happen to your premium?
a) It will go up
b) It will go down
c) It will stay the same
d) All of the above

What is the largest monthly expense you will likely encounter?
a) Food
b) Housing
c) Car
d) Insurance

Which loan option will cost the least amount in interest charges?
a) 3.9% for 48 months
b) 3.9% for 60 months
c) 5.0%for 48 months
d) 5.0% for 60 months

Why might you decide to take out a car loan with a long term of 60 or 72 months?
a) To increase your monthly payments
b) To lessen the amount of the down payment
c) To get a better APR
d) To keep your monthly payments low

Total car expenses should be under which percent of your monthly income?
a) 20%
b) 30-35%
c) 10%
d) 25%

On average, about how much of your monthly net income can you expect to spend on housing expenses?
a) 20%
b) 30-35%
c) 10%
d) 20-25%

Which of the following is an ADVANTAGE of renting?
a) You will build equity in the property
b) You can decorate however you like
c) You will be able to relocate easily if you are transferred jobs at work
d) You will get a tax deduction

All of the following refer to the owner of a rental property, EXCEPT which one?
a) Lessee
b) Lessor
c) Landlord
d) None of the above

If you are renting an apartment and you, in turn, decide to leave and rent to a third party, this is called a:
a) Lease agreement
b) Sublet
c) Roomate
d) Tenant

Cars are generally poor purchases when looked at as purely an investment because they only go down in value over time. What is this decrease in value called?
a) Wear and tear
b) Opportunity cost
c) Maintenance
d) Depreciation

Renter's insurance will cover which of the following:
a) Your liability if your friend injures themselves while in your apartment.
b) Water damage to your apartment building due to a flood.
c) Damage to your personal items due to a fire in your building.
d) The cost of your meals if your apartment was robbed of jewelry and cash.

Which of the following might be written into your apartment lease?
a) Who is responsible for paying utilities
b) Conditions under which you can break the lease
c) Whether you have the option to sublet your apartment
d) All of the above

If your net annual income is $50,000, what is the maximum amount you should budget for monthly car expenses?
a) $834
b) $500
c) $655
d) $908

Which of the following is an ADVANTAGE to buying a house?
a) Less financial risk than renting
b) Easier to relocate
c) Less maintenance
d) Building equity

What are the Illinois state minimums for car insurance?
a) 25/50/20
b) 50/100/50
c) 100/500/250
d) 20/75/50

What is the amount financed referring to on a new car loan?
a) The APR
b) The total amount of the car loan
c) The interest paid over the course of the loan
d) The amount of money paid for a car over time, including interest

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