6
practice testMultiple Choice

Practice Test

Question 6 • CMS 2026-2027 Economics and Personal Finance INITIAL CREDIT

What is the definition of liability?

Answer
A
the amount a consumer must pay after an incident before the insurance company starts paying
B
a responsibility to pay for or fix a problem
C
the monthly amount paid for insurance
D
intentionally destroying something in order to collect insurance

Explanation

A liability is a responsibility to pay for or fix a problem. The insurance deductible is the amount paid before insurance starts covering costs, so choice B describes a deductible, not liability.

AI-written and checked against the verified answer.

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