Short Answer Questions

1 What is meant by credit?

2 State two reasons for the increased use of credit by many consumers

3 What is the main advantage to a retailer of selling goods on credit

4 Why do some traders not offer credit to their customers?

5 Match the following terms with their definitions:

a Creditworthiness i delayed payment for goods and services

b Consumer durables ii amount of credit a person is given based on ability to pay

c Savings iii goods with second-hand value

d Consumer Credit iv money put aside to earn interest

Multiple Choice Questions

1 Why do so many consumers like buying on credit?

A It allows consumers to inspect goods before purchase

B It enables money to be transferred to another person

C They can use it to make small payments

D They can postpone payment

2 What is the main feature of all kinds of credit purchase?

A Cash advances

B Immediate ownership

C Liquidity

D Postponement of payment

3 Which of the following does not offer consumer credit

A Bank

B Consumer council

C Finance company

D Retailer

4 Why has the use of credit increased in many countries?

A Discounts are given when buying on credit

B Many people are unemployed

C People have insufficient cash to pay immediately for expensive goods.

D The government encourages buying on credit

5 What is an advantage of paying cash for goods?

A The buyer is always given discount

B The buyer has no debt to pay

C The buyer will be offered free delivery

D The buyer pays the cash in installments

For the short questions, try to state precise mention all the information needed.

For the mcq's, you can just add the number of question and then the option chosen.