practice tests for the wise certification test questions with correct answers

Which of the following does the Federal Reserve use to regulate the nation's money supply? Answer 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? Answer 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? Answer B: They expose consumers to greater likelihood of identity theft