Money Matters Chapter.12 Test Bank Answers

1.

What is the first step in developing a meaningful financial philosophy?  
 

2.

To develop a personal financial philosophy is to  
 

3.

A formal plan that accounts and plans for income and expenditures is referred to as a 
 

4.

A budget is a 
 

5.

How can you evaluate whether your budget is working or not? 
 

6.

You should review your budget monthly and revise it as necessary in order to evaluate 
 

7.

A nonprofit organization that can help you design a plan to pay off your debts is referred to as a(n)  
 

8.

Cutting up your credit cards and reading the newspaper online are two ways to 
 

9.

You have listed your expenditures for the past year and continue to keep track of everything you spend. In order to have a balanced budget, you also need to keep track of 
 

10.

Which of the following is not a good strategy for dealing with financial difficulties? 
 

11.

You've been spending more than you make. The two things you can do to rebalance your budget is increase your income and 
 

12.

What is the relationship between credit cards and your credit history? 
 

13.

In most cases, students who are signing up for their first credit card 
 

14.

Your roommate bailed on you and you lost your job. Your credit card bills are piling up and you haven't paid the balance off for over six months. What is the first thing you should do? 
 

15.

What is a financial award that does not have to be repaid? 
 

16.

A grant is referred to as the 
 

17.

Payments on many college loans are deferred, which means 
 

18.

When you don't have to start paying your college loans back until after you graduate, your loans are 
 

19.

Perkins, Stafford, and PLUS are all types of 
 

20.

Funds provided by a bank, credit union, or other agency that must be repaid are referred to as 
 

21.

The stated amount of a loan is referred to as the 
 

22.

The length of time for which money is lent is referred to as the 
 

23.

What is the standard form used by almost every college to assess a student's financial capabilities and determine how much the student and family can be expected to contribute toward college expenses? 
 

24.

The FAFSA form 
 

25.

You received your financial aid package but it doesn't seem like it will be enough money for you to be able to attend college. Your next step should be to 
 

26.

What is the best way of describing the relationship between the cost of a college education and its value? 
 

27.

You received a $2,500 tax credit that frees up some of your college funds. This credit is known as the 
 

28.

You're an older student going back to school to work on some of your skills. You received a 20 percent tax credit, which is referred to as a 
 

29.

A lifetime learning tax credit 
 

30.

A Pell grant 
 

31.

A work-study grant 
 

32.

A Hope scholarship 
 

33.

According to your textbook, which of the following are effective ways to save money? Click all that apply. 
 
____  Check bills for errors.
____  Make and take your own lunch.
____  Buy items you want when you see them.
____  Control impulse buying.
____  Use credit as much as possible.

34.

Although credit cards can be useful for emergencies, they should be used with caution in other situations. Which of the following are reasons for using credit cards with caution? Click all that apply. 
 
____  Credit is more acceptable to merchants than cash.
____  They can have high interest rates.
____  Late payments can damage your credit rating.
____  They can lead to addictive spending.
____  The more you use them the more rewards points you get.

35.

What are some of the benefits of having a credit card? Click all that apply. 
 
____  Spending is easy.
____  Interest rates can be high.
____  They are helpful in emergency situations.
____  They are convenient.
____  You can establish a good credit history.

36.

What are some of the negatives of having a credit card? Click all that apply. 
 
____  Spending is too easy.
____  Interest rates can be high.
____  They are helpful in emergency situations.
____  It's easier for someone to steal your identity.
____  They are convenient.

37.

A scholarship is an award of money to a student based on merit or need. 
 
True    False

38.

If you spend more than you make, you can either decrease your spending or increase your income to balance your budget. 
 
True    False

39.

A good credit history means you have never missed a loan payment and you always pay on time. 
 
True    False

40.

Credit cards make you less susceptible to identity theft. 
 
True    False

41.

An important step in budgeting is to make sure that your income does not exceed your expenditures. 
 
True    False

42.

People who are college graduates earn more money than people with only a high school degree. 
 
True    False

43.

It is sometimes better to work excessive amounts to avoid having to take out more student loans to cover the costs of college. 
 
True    False

44.

More than half of college graduates feel burdened by their debt. 
 
True    False

45.

As you search for sources of financial aid, your first stop should be your academic adviser. 
 
True    False

46.

Research shows that college students who work make poorer grades. 
 
True    False

47.

You are about to start your first semester in college and have decided to work out a budget for the year.

a. What are the advantages of preparing a budget in advance?
b. What information do you need to gather to be able to write up your budget? 
 

48.

You have received formal notification of your aid package for the upcoming semester and are shocked to discover that the loan amount you are to receive has been cut by 50 percent from last year's amount. You will not have enough to pay your tuition. What steps can you take to remedy the situation?  
 

49.

You have been accepted into the college of your choice and now you need to find the money to pay for your education.

a. What sources of information could you use to research the financial aid available?
b. Briefly describe the types of financing that should be available. 
 

50.

Due to unexpected car problems and being laid off from your part-time job, you have run up an overdraft on your checking account, reached the limit on your credit card, and are unable to pay this month's rent and utility bills. It is two months before the fall semester begins, and you receive your next loan payment. What can you do to deal with your immediate financial problems?