EverFi Module 4 Answers – EverFi Consumer Skills Test

EverFi Module 4, titled “Consumer Skills,” is a part of an educational program designed to teach essential life and financial skills. This module covers various aspects related to consumer skills, such as understanding credit scores, housing options, payment methods, and other financial literacy topics.

Question: Which of the following is NOT a useful strategy when making an informed purchase?

Answer: Buy a product influenced by a recommendation from a social media influencer.

Question: Which of the following is NOT an advantage of owning a car?

Answer: Leasing offers the benefit of lower initial and ongoing monthly payments.

Question: When you are deciding what to buy, you should…….

Answer: Examine the per-unit cost of products similar to your desired item for comparison.

Question: Why is figuring out the unit price of something useful when shopping?

Answer: It assists in identifying the most advantageous offer.

Question: When comparison shopping, all of these hint at a good deal EXCEPT_____________________.

Answer: Models with lower prices come with more features.

Question: Question: Which method of payment actually is a form of borrowing money that needs to be paid back later?

Answer: Credit card.

Question: Which fact supports the idea that renting is a good choice to reside in a location temporarily?

Answer: Most maintenance responsibilities are handled by landlords.

Question: Which one of these is NOT indicative of a potential scam when making significant purchases such as a car?

Answer: A cost that is easily manageable within your budget.

Question: When making a large purchase, you should avoid everything EXCEPT _______________________

Answer: A cost that is easily manageable within your financial plan.

Question: How is a post from a social media influencer different than a comment from a regular consumer?

Answer: The product is posted by the influencer in exchange for payment.

Question: Making a good purchasing decision requires __________.

Answer: Both choices.

Question: What is a budget?

Answer: A plan for managing income and expenses.

Question: Why is comparing prices important?

Answer: To find the best deal and save money.

Question: What is a credit score?

Answer: A numerical representation of your creditworthiness.

Question: How can you improve your credit score?

Answer: By paying bills on time and reducing debt.

Question: What is interest?

Answer: The cost of borrowing money.

Question: Why is saving money important?

Answer: For future financial security and emergencies.

Question: What is a loan?

Answer: Borrowed money that must be repaid with interest.

Question: What is a mortgage?

Answer: A loan used to purchase a home.

Question: What is insurance?

Answer: Protection against financial loss.

Question: What is a deductible in insurance?

Answer: The amount you pay before insurance covers the rest.

Question: What is a credit card?

Answer: A card used to borrow funds for purchases.

Question: What is a debit card?

Answer: A card that deducts money directly from your bank account.

Question: What is a savings account?

Answer: An account for storing money safely while earning interest.

Question: What is a checking account?

Answer: An account for daily transactions like deposits and withdrawals.

Question: What is a budget deficit?

Answer: When expenses exceed income.

Question: What is a budget surplus?

Answer: When income exceeds expenses.

Question: What is an investment?

Answer: Allocating money with the expectation of a future financial return.

Question: What is inflation?

Answer: The increase in prices over time.

Question: What is a warranty?

Answer: A guarantee about the quality of a product.

Question: What is a contract?

Answer: A legal agreement between parties.

Question: What is a credit report?

Answer: A record of your credit history.

Question: What is a fixed expense?

Answer: Costs that remain the same each month.

Question: What is a variable expense?

Answer: Costs that can vary each month.

Question: What is a financial goal?

Answer: A specific objective related to money.

Question: What is compound interest?

Answer: Interest calculated on both the initial principal and the accumulated interest.

Question: What is a lease?

Answer: A contract to rent something for a specified period.

Question: What is bankruptcy?

Answer: A legal process for dealing with debt when someone cannot repay their debts.

Question: What is collateral?

Answer: An asset used to secure a loan.

Question: What is a debit?

Answer: An amount deducted from a bank account.

Question: What is a credit?

Answer: An amount added to a bank account.

Question: What is a financial plan?

Answer: A strategy for managing finances.

Question: What is gross income?

Answer: Total income before taxes and deductions.

Question: What is net income?

Answer: Income after taxes and deductions.

Question: What is a tax deduction?

Answer: A reduction in taxable income.

Question: What is a tax credit?

Answer: An amount that reduces the tax owed.

Question: What is a 401(k) plan?

Answer: A retirement savings plan offered by employers.

Question: What is a pension plan?

Answer: A retirement plan that provides a fixed payout.

Question: What is financial literacy?

Answer: Understanding of financial principles and practices.

Question: What is a stock?

Answer: A share in the ownership of a company.

Question: What is a bond?

Answer: A debt investment in which an investor loans money to an entity.

Question: What is a mutual fund?

Answer: An investment program funded by shareholders.

Question: What is diversification in investing?

Answer: Spreading investments to reduce risk.

Question: What is risk tolerance? Answer: An individual’s comfort level with investment risk.

Question: What is a credit union? Answer: A member-owned financial cooperative.

Question: What is a budget revision? Answer: Adjusting a budget to reflect changes in income or expenses.

Question: What is a financial advisor?

Answer: A professional who offers financial guidance.

Question: What is a credit limit?

Answer: The maximum amount that can be charged to a credit card.

Question: What is a minimum payment?

Answer: The smallest amount you can pay on a credit card balance.

Question: What is identity theft?

Answer: The fraudulent acquisition and use of someone’s personal information.

Question: What is a financial emergency?

Answer: An unexpected expense that requires immediate funds.

Also Read “Fema IS-800 D Answers

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