International Baccalaureate (IB) Practice Exam

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Which of the following statements does not represent a common credit myth?

Debt is a tool and should be used to create prosperity.
You have "arrived" financially once you get approved for a credit card.
The lottery and other forms of gambling will make you rich.
Borrowing money can have serious consequences and prevent you from building wealth.

The correct answer is: Borrowing money can have serious consequences and prevent you from building wealth.

The statement that does not represent a common credit myth is correct because it reflects a realistic view of borrowing and its potential impact on personal finances. Unlike the other statements, which promote misconceptions about credit and wealth, this option acknowledges the serious implications of borrowing money. It highlights the understanding that taking on debt can indeed hinder financial success by leading to a cycle of repayment, interest accumulation, and potential financial instability. Acknowledging the real consequences of borrowing is crucial for sound financial planning, guiding individuals to approach credit more responsibly and focus on wealth-building strategies that do not rely heavily on debt. In contrast, the other statements perpetuate myths: they suggest careless attitudes towards debt and false beliefs about sudden wealth, which can lead people to make poor financial decisions.