An Informative Quiz On Financial Responsibility

The maximum amount one is allowed to carry as the balance on a credit card is called the credit limit. This limit is set by the credit card issuer and represents the maximum amount of money that can be charged to the credit card account. It serves as a safeguard to prevent cardholders from overspending and helps to manage their credit usage.

People who are described as having credit risks have a history of not paying their bills on time. This means that they have a track record of late or missed payments, which indicates a higher likelihood of defaulting on future obligations. This can make it more difficult for them to obtain loans or credit from banks or other lenders. They do not receive perks or benefits for being loyal customers, as credit risks are seen as higher-risk borrowers.

Having a good credit history allows individuals to easily obtain low interest rates on loans. Lenders consider a good credit history as an indication of a borrower's reliability and trustworthiness in repaying debts. This reduces the risk for lenders, leading to lower interest rates offered to borrowers with good credit. Consequently, individuals with a good credit history can save money by paying less interest on their loans, making it a significant benefit of maintaining a positive credit history.

Your overall lifestyle can affect your finances because the way you choose to live your life can have a direct impact on your financial situation. For example, if you have a lavish lifestyle with expensive habits and spending patterns, it can lead to financial strain and debt. On the other hand, if you adopt a frugal lifestyle and make wise financial decisions, it can contribute to financial stability and success. Therefore, your overall lifestyle choices play a crucial role in determining your financial well-being.

Banks can offer free financial advice to the people because they have financial experts who can provide guidance on managing money, budgeting, saving, investing, and other financial matters. Banks have a vested interest in helping their customers make informed financial decisions and improve their financial well-being. They may offer services such as financial consultations, educational resources, and workshops to help individuals and businesses make sound financial choices. Additionally, banks can provide information on various financial products and services that can help individuals achieve their financial goals.

If the economy does not grow for six months or more, it is likely to enter a recession. A recession is a significant decline in economic activity, characterized by a decrease in GDP, employment, and income levels. During a recession, businesses may struggle, leading to layoffs and reduced consumer spending. This can create a negative cycle, further impacting the economy. Therefore, the correct answer is recession.

Making a late payment on your bills can negatively impact your credit score. This can make it difficult to get approved for another loan in the future as lenders may view you as a higher risk borrower.

Principal refers to the amount of money that is borrowed or the initial amount of money invested. It is the base amount on which interest is calculated and is typically repaid in installments over a specific period of time. Collateral is an asset used to secure a loan, credit limit is the maximum amount a borrower can borrow, and interest is the cost of borrowing money. Therefore, the correct answer is principal.

Being a conscious shopper is not a good way to cope with inflation because it focuses on individual spending habits rather than addressing the root cause of inflation. While being a conscious shopper can help manage personal finances, it does not have a direct impact on controlling or mitigating inflation. Inflation is a macroeconomic phenomenon caused by various factors such as monetary policy, supply and demand dynamics, and economic growth. Therefore, other options such as investing in good businesses, getting a high paying job, and making a budget are more effective ways to cope with inflation as they address the underlying economic factors.

Binge watching TV shows can provide temporary distraction and entertainment during a recession, but it does not offer any practical or financial assistance. On the other hand, having an emergency fund can be extremely helpful during a recession as it provides a financial safety net in case of job loss or unexpected expenses. Therefore, the correct answer is "None of the above" as binge watching TV shows does not provide any tangible support during a recession.