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practice tests for the wise certification test with verified solutions
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practice tests for the wise certification test with verified solutions
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practice tests for the wise certificationtest with verified solutions
Which of the following does the Federal Reserve use to regulate the nation's money
supply? CORRECT ANSWERS answer: Monetary policy
The Federal Reserve uses monetary policy to regulate the nation's money supply.
Monetary policy is directed at expanding or contracting the supply of money and credit
in the U.S. economy. In theory, if there is too little money in circulation, consumers will
spend less, interest rates will be high, and unemployment will rise. In this situation, the
Fed can deliberately increase the amount of money in circulation, leading to lower
interest rates, increases in consumer spending, and higher employment rates. If there is
too much money in circulation, however, prices rise and the value of the dollar
decreases (inflation).
Which of the following statements is usually true about individuals who are financially
literate? CORRECT ANSWERS B: They understand the basics of personal finance and
money management
Financial literacy is knowledge of facts, concepts, and technological tools that are basic
to being smart about money. People who are not financially literate are more likely to fall
prey to consumer scams, have excessive consumer debt, and spend their money
without a spending plan. Ultimately, they may end up in serious financial trouble.
Which of the following is a disadvantage of using phone cards, debit cards, electronic
transfers, and ATM cards? CORRECT ANSWERS B: They expose consumers to
greater likelihood of identity theft
The growing number of transactions that can be carried out without cash increases
convenience for consumers who have credit cards, phone cards, debit cards, etc., but
also exposes consumers to greater likelihood of fraud and/or identity theft.
A cash card generally: CORRECT ANSWERS B: Is purchased with a specific amount of
money that can be used to pay for goods or services
Consumers purchase cash cards for a specific amount of money. The amount paid is
stored in the card's memory, and the card can be used to pay for goods or services
specific to a particular store or action until the amount stored, or "loaded" on the card,
has been spent. Some retail chain stores sell cash cards which can be used to pay for
their products. Cash cards are either disposable or re-loadable. Disposable cash cards
cannot be replenished (loaded again). With re-loadable cash cards, the consumer can
return to the merchant and pay to have the balance on the card replenished.
, Jami lost her debit card. She did not report it missing for 3 months. If an unauthorized
person used her debit card, her maximum liability is CORRECT ANSWERS C:
Unlimited liability
According to the Electronic Fund Transfer Act, if a consumer reports the theft or loss of
an ATM or debit card to the issuing financial institution within two business days, he/she
is liable for not more than $50 of unauthorized purchases. If reported within 60 days, the
consumer is liable for up to $500 of unauthorized purchases. If reported after 60 days or
not reported, the consumer may be liable for the entire amount of unauthorized
purchases.
Scott just got an ATM card to use and must choose a PIN (Personal Identification
Number). How should he select a PIN that will give him maximum protection against
anyone else being able to find out what the PIN is? CORRECT ANSWERS B: Use a
random selection of letters and numbers
A PIN (personal identification number) is a secret code that protects the privacy of your
accounts and allows only you to access them. The numbers should not be composed of
numbers easily associated with the person choosing the PIN such as birth date,
telephone number, or street number address. It should be a random series of numbers
and letters that would be hard for unauthorized users to guess. Also, never write your
PIN on your ATM or debit card or in your check book because then a thief would you?re
your confidential information needed to make purchases or withdraw all the money out
of your account.
Which statement is FALSE about most ATM (Automated Teller Machine) cards?
CORRECT ANSWERS B: You can always get cash anywhere in the world with no fee.
You must have a bank account to have an ATM card because the ATM card is used to
electronically make deposits into, withdrawals from, or get information concerning your
bank balance at an ATM 24 hours a day, seven days a week. If you use an ATM that is
not in your bank?s ATM network, you will likely be charged a fee by the network that
owns that ATM. In addition, your own bank may add a fee to your monthly statement for
using an ATM outside their ATM network
Purchases made with your debit card are usually: CORRECT ANSWERS A: Deducted
immediately from your checking account
Debit card purchases are immediately deducted from your checking account balance
while credit card purchases are added to your credit card balance. You have about 20
days after receiving a credit card bill to pay it without being charged interest. Through
the use of a credit card, you get use of goods or services before they are paid for.
A type of electronic funds transfer (EFT) is: CORRECT ANSWERS D: An ATM
transaction
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