Quiz on Consumer Credit

What is consumer credit primarily used for?

• Buying luxury items

• Paying off debt

• Investing in stocks

• Covering unexpected expenses

What does credit creation facilitate in the economy?

• Bartering

• Decreased trade

• Trade and commerce

• Isolationism

How can credit creation promote economic growth?

• By decreasing investments

• By increasing savings

• By discouraging innovation

• By encouraging savings and investments

What is the importance of credit creation for social welfare?

• It has no impact on social welfare

• It leads to inflation

• It enhances social welfare and well-being

• It decreases access to education

Which type of credit involves repaying a fixed amount in equal instalments?

• Open-end credit

• Revolving credit

• Closed-end credit

• Variable credit

What serves as collateral for a car loan?

• Car insurance

• The car itself

• The borrower’s savings

• The borrower’s income

What is the main risk associated with mortgage loans?

• Depreciation of the house

• Interest rates

• Monthly repayments

• Loan term

What type of loan is a student loan?

• Open end credit

• Revolving credit

• Variable credit

• Closed end credit

What is the primary purpose of credit card?

• Saving money

• Investing

• Convenience and flexibility

• Paying off existing debt

What is a personal line of credit primarily used for?

• Investing in stocks

• Managing emergencies

• Buying luxury items

• Starting a business