Commerce grd 11 -mttest 2nd

What is the primary meaning of credit?

• A form of investment where interest is earned

• The ability to borrow money or obtain goods with the promise to pay later

• A method of paying in cash for purchases

• A guarantee for a loan from the government

Which of the following is a source of credit?

• Banks and financial institutions

• Government bonds

• Stocks and shares

• Property taxes

What is the primary function of credit?

• To provide cash payments to consumers

• To increase the amount of money in circulation

• To limit the access to financial resources

• To allow individuals to buy goods immediately and pay for them later

Which of the following is an example of trade credit?

• A bank loan to a business

• A consumer loan for purchasing a car

• A retailer allowing a customer to pay for goods after 30 days

• A credit card for personal purchases

What is the main advantage of using credit for consumers?

• It encourages saving money

• They can make purchases immediately without having the full amount of money available

• It allows them to buy stocks and shares

• It forces them to pay interest for every purchase

Which of the following is a type of credit commonly used by businesses?

• Personal loan

• Mortgage

• Trade credit

• Savings account

What is a key source of credit for consumers?

• Bank loans

• Savings bonds

• Public investments

• Tax returns

Which of the following is an example of a function of credit?

• It forces consumers to save money by making credit unavailable

• It reduces the overall supply of money in the economy

• It discourages investment in businesses

• It provides capital to businesses for expansion

Which of the following is NOT a source of credit for individuals?

• Insurance premiums

• Trade credit

• Credit cards

• Bank loans

How does credit benefit the economy as a whole?

• It helps consumers avoid purchasing goods and services

• It encourages investment and facilitates the flow of money within the economy

• It decreases consumer spending and investment

• It reduces government spending and taxation