economics
How does business competition impact the consumer? A) It hurts them because it leads to dishonest practices. B) It hurts them because it results in too many choices. C) It helps them because it ensures high-quality items are produced. D) It helps them because it keeps the price of goods low.
D) It helps them because it keeps the price of goods low.
How does Congress hold the Federal Reserve accountable? (Select all that apply.) The Federal Reserve's Board of Governors can be called to appear before a tribunal of the US Supreme Court. The president of the United States can interview the members of the Federal Reserve's Board of Governors. Federal Reserve appointees provide testimony to congressional committees. The Federal Reserve is audited by the Government Accountability Office (GAO).
Federal Reserve appointees provide testimony to congressional committees. The Federal Reserve is audited by the Government Accountability Office (GAO).
How can the national debt impact private businesses? (Select all that apply.) Government payments on interest cannot be used for programs. Government spending can drive up prices for everyone. Government tax policies can lead to an increase in demand. Government borrowing can crowd private investors out of the lending market.
Government spending can drive up prices for everyone. Government borrowing can crowd private investors out of the lending market.
Read the scenario. Miguel knows he wants to join the military. What should Miguel do before enlisting to help with employment after his service? (Select all that apply.) He should investigate training opportunities available while in the service and tuition assistance available afterwards. He should sign the paperwork, attend basic training, and see what training opportunities are available. He should take out a loan to help him pay for his future education options. He should speak with the recruiter about the specific opportunities and jobs that he will be able to pursue.
He should investigate training opportunities available while in the service and tuition assistance available afterwards. He should speak with the recruiter about the specific opportunities and jobs that he will be able to pursue.
What is true about the risk and return of an investment? Lower-risk investments offer the potential for a higher return. Time is the most important consideration, so the investment risk has little impact on the return. Higher-risk investments offer the potential for a higher return. The best way to determine the total risk of an investment is to review the return it offers.
Higher-risk investments offer the potential for a higher return.
Read the scenario. Ronnie is 21 and has three credit cards, each of which has a balance. His debt-to-credit ratio is 80 percent, and he has applied for his first car loan. Why will his interest rate be higher than what is typical? His interest rate will be higher because he has had a car loan in the past and made payments. His interest rate will be higher because he is 21, has perfect credit, and has proof of previous loans. His interest rate will be higher due to having several credit cards and a high debt-to-credit ratio. His interest rate will be higher due to having only three credit cards, which he pays each month.
His interest rate will be higher due to having several credit cards and a high debt-to-credit ratio.
For the set {20,21,21,23,26,30,36,39}{20,21,21,23,26,30,36,39}, what is the mode? 27 23 20 21
21
For the set {16,17,17,19,22,26,32,35}{16,17,17,19,22,26,32,35}, what is the mean? 23 17 35 22
23
Which are offered by joining the military after high school? (Select all that apply.) A) receive an associate's degree (AA) after serving a certain number of years B) receive tuition assistance after serving a certain number of years C) receive training while earning a salary D) receive training guaranteed to prepare a person for civilian life
B) receive tuition assistance after serving a certain number of years C) receive training while earning a salary
Read the scenario. George is 22 years old, single, and has just started his first job. He saves 5 percent of his monthly income for retirement. Kirsten is 30 years old and married with two children. She will start saving 6 percent of her income for retirement when she turns 35. Which person will have more money at age 65 if all other factors are the same? A) Both will because Kirsten will eventually catch up with George. B) Neither will because neither one is not saving enough each month. C) George will because he is younger and saving for a longer period. D) Kirsten will because she is adding more money to her savings.
C) George will because he is younger and saving for a longer period.
Which tax is the main source of revenue for the federal government? income property sales payroll
income
Read the scenario. Mia has had five credit accounts for 10 years. She has a debt of $2,000 and makes all of her payments on time every month. Sal also makes timely payments on his similar debt. Sal has had credit accounts for two years. Based on the information, who has a better credit score? Their credit scores would be equal because they owe approximately the same amount to the same number of creditors. Mia has a better credit score because she has managed debt for a longer period of time. They currently do not have credit scores because they still owe money. Sal has a better credit score because he has had debt for a shorter period of time.
Mia has a better credit score because she has managed debt for a longer period of time.
How can the World Bank help developing nations economically? It can protect and negotiate free trade deals between neighboring nations. It can work to remove serious health problems so resources can shift to economic growth. It can sell medical drugs and other treatments to clinics at a very low cost, saving the patients money. It can provide loans to developing countries to build new infrastructures.
It can provide loans to developing countries to build new infrastructures.
What are roles of the government in a mixed market economy? (Select all that apply.) It helps to prevent monopolies. It ensures businesses are able to make a profit. It enforces laws against false advertising. It helps to ensure that prices are fair.
It ensures businesses are able to make a profit. It helps to ensure that prices are fair. PARTIAL CREDIT
What is true regarding seasonal unemployment? It is not as troubling to the government as other types of unemployment. It has negative costs similar to those of other types of unemployment. It is likely to last longer than other types of unemployment. It is much harder to predict than other types of unemployment.
It is not as troubling to the government as other types of unemployment.
Why might the government intervene to set prices? (Select all that apply.) It wants to ensure that all people can afford food. It wants to ensure that businesses are operating efficiently. It wants to ensure that the country can produce items it needs in an emergency. It wants to ensure that the government has the resources it needs.
It wants to ensure that the country can produce items it needs in an emergency. It wants to ensure that the government has the resources it needs. It wants to ensure that all people can afford food.
Read the definition. a regular payment dispersed to an individual during retirement from an investment fund to which an individual or employer has contributed Which is being defined? premium equity dividend pension
pension
Review the list. a rising unemployment rate a decline in GDP What does the list indicate about economic growth? The economy is in a boom. The economy has reached a trough. The economy is about to grow. The economy is in a decline.
The economy is in a decline.
How do government benefit payments, such as social security and veteran benefits, help the economy? (Select all that apply.) They are a source of revenue that people use to consume goods and services. They prevent inflation because the payments are modest in amount. They provide individuals with the opportunity to further their education. They offer a safety net for people who may be struggling for some reason.
They are a source of revenue that people use to consume goods and services. They prevent inflation because the payments are modest in amount. PARTIAL CREDIT
Read the scenario. A company's production is slowing. Each additional variable produces more units but at a decreasing rate. This company is in which stage of production? They are in stage two. They are between stage one and stage two. They are between stage two and stage three. They are in stage one.
They are in stage two.
How might developing countries obtain funding? (Select all that apply.) They can acquire grants from foreign countries. They can gain loans from private investors. They can obtain financial assistance from World Bank. They can attain microloans from neighboring countries.
They can gain loans from private investors. They can obtain financial assistance from World Bank. needs a third one
What is true of geographic monopolies? They are usually broken up when new technology is introduced. They are prohibited by government regulation. They usually involve scarce natural resources. They often exist in areas where the customer base is small.
They often exist in areas where the customer base is small.
Which are advantages of credit? (Select all that apply.) You can buy items now and pay for them later. You make one monthly payment. It costs you money over time You have a temptation to buy more.
You can buy items now and pay for them later. You make one monthly payment.
Why was the Federal Deposit Insurance Corporation (FDIC) created? to protect people's deposits in the event of a bank failure to protect banks in the event people began to withdraw funds to protect the government from providing too much coverage to protect the economy from another stock market crash
to protect people's deposits in the event of a bank failure
Why would the government use an expansionary fiscal policy? to lower growth targets to lower aggregate demand to stimulate aggregate demand to prevent inflation
to stimulate aggregate demand
Which items are most likely to be highly elastic? (Select all that apply.) water gasoline apples jewelry
water gasoline
When does a country have a trade surplus? when the cost of a country's exports exceeds the cost of its imports when the cost of a country's exports is equal to the cost of its imports when the cost of a country's imports exceeds the cost of its exports when the cost of a country's imports is equal to the cost of its exports
when the cost of a country's exports exceeds the cost of its imports
When does a country have a trade deficit? when the cost of a country's imports is equal to the value of its exports when the cost of a country's imports exceeds the value of its exports when the cost of a country's exports is equal to the value of its imports when the cost of a country's exports exceeds the value of its imports
when the cost of a country's imports exceeds the value of its exports
When would nominal GDP appear lower than real GDP? when the rate of inflation is negative when the rate of inflation is positive when the rate of growth is positive when the rate of growth is negative
when the rate of inflation is negative
Read the sentences. When measuring GDP, it is important to note that businesses' goods flow to consumers, whose payments for those goods provide profits for those businesses. This process can be depicted as flowing in a _[blank]_ shape. Which accurately completes the sentence? circular unidentifiable linear rectangular
circular
What type of market involves the trade of raw materials such as gold, oil, and corn? grocery market commodity market stock market bond market
commodity market
Read the scenario. Company A uses social media to advertise, while company B places its product in the store. Which is an example of a push marketing strategy? company A neither company company B both companies
company B
Read the sentence. In the early 1800s, David Ricardo developed the theory of _[blank]_ advantage, which describes how a nation may have lower opportunity costs than another nation. Which best completes the sentence? opportunity absolute comparative laissez-faire
comparative
Entrepreneurs who like a challenge and are dedicated to bringing their ideas to life have which qualities? attuned to feedback and persevering competitive and innovative strong leadership and vision self-motivated and self-disciplined
competitive and innovative
What were the top two purposes of the Tennessee Valley Authority Act? (Select all that apply.) control flooding in the valley increase car traffic in the valley increase presidential favor in the valley create employment in the valley
control flooding in the valley create employment in the valley
What are variable costs? costs that remain the same no matter how much is produced costs that can be negotiated in advance costs that change based on production costs associated with additional units of production
costs that change based on production
What are fixed costs? costs associated with producing additional units of a product costs that vary based on the quantity of products produced costs that do not add value to product quality costs that do not change based on production
costs that do not change based on production
Read the description. This is a plastic card that provides access to an account. It can be used to make purchases at a wide variety of stores, restaurants, or other businesses. The holder can make deposits into their account. Money can also be withdrawn from the account as long as the amount withdrawn does not exceed the balance. Which product is described? ATM card debit card credit card gas card
debit card
Read the sentence. In addition to checking and savings accounts, many banks offer other services that assist customers in using and managing their money wisely. What are some of the services that customers may use? payday loans, certificates of deposit, and online bill pay direct deposit, mutual funds, and online banking financial management, student loans, and title loans mortgage, insurance, and stocks
direct deposit, mutual funds, and online banking
Read the sentence. The dollar can be broken down into cents. What characteristic is the dollar displaying in this example? durable transferable portable divisible
divisible
Read the sentence. One way that a strong economy affects _[blank]_ is that it makes business owners more prone to take risks. Which accurately completes the sentence? the standard of living government spending foreign trade entrepreneurship
entrepreneurship
What is a good or service sold to a foreign nation? commodity export import subsidy
export
What is the formula for measuring GDP? final goods and services multiplied by the price final goods and services divided by the price intermediate goods and services multiplied by the price intermediate goods and services divided by the price
final goods and services multiplied by the price
When the world was on the gold standard, which system was used to determine the value of a country's currency as compared to another country's currency? managed floating rate fixed exchange rate floating exchange rate flexible exchange rate
fixed exchange rate
Read the sentence. One way that a weak economy can affect _[blank]_ is that it can make accepting and distributing goods more difficult, as well as intensify scarcity. Which accurately completes the sentence? government spending foreign trade entrepreneurship the standard of living
foreign trade
What is a significant health care expense spent by state governments? funding the Centers for Disease Control and Prevention funding the National Institutes of Health funding Medicaid programs funding the Federal Employees Health Benefits Program
funding Medicaid programs
What are the Three Stages of Production? (Select all that apply.) diminishing returns marginal returns increasing returns negative returns
increasing returns negative returns diminishing returns
What are some of the most common obstacles to a developing country's economic growth? (Select all that apply.) lack of educational opportunities for the populace low population growth due to poor health care a lack of clean water and nutritious foods limited lending institutions that provide loans
lack of educational opportunities for the populace a lack of clean water and nutritious foods limited lending institutions that provide loans
Read the sentence. The Federal Reserve is considered to be the _[blank]_ bank of the United States of America. Which correctly completes the sentence? regional local state national
national
What are the largest categories of discretionary and mandatory spending? interest on debt and welfare national defense and Social Security education and transportation unemployment compensation
national defense and Social Security
How does a company entice the consumer to buy more using marginal analysis? (Select all that apply.) offering a buy one, get one free sale raising the price on the initial purchase giving away a prize with each purchase charging extra tax on a discounted item
offering a buy one, get one free sale giving away a prize with each purchase
Read the scenario. Sally needs to pay her bills this month. Her bills include rent, utilities, groceries, concert tickets, airfare, car insurance, a car rental, and a trip to an urgent care facility. What are Sally's fixed expenses? airfare and the car rental concert tickets and utilities groceries and the trip to an urgent care facility rent and car insurance
rent and car insurance
An entrepreneur with the ability to motivate others in a collaborative environment that fosters team goals and work productivity has which qualities? competitive and persevering strong leadership and vision self-motivated and self-disciplined attuned to feedback and innovative
strong leadership and vision
What is a benefit of international trade? a decrease in trade of ideas and cultural practices between nations the use of a fixed exchange rate in modern global society an increase in tariffs between competing nations the diffusion of culture and ideas between nations
the diffusion of culture and ideas between nations
Why is federal oversight crucial to the operation of the Federal Reserve Bank? The Federal Reserve sets rules and regulations for the New York Stock Exchange. The Federal Reserve is the nation's central banking system. The Federal Reserve controls the nomination of legislators to committees. The Federal Reserve funds mandatory government expenditures.
The Federal Reserve is the nation's central banking system.
What occurs when governments increase the minimum wage? There is an increase in consumer demand. There is a shortage of labor. There is a surplus of labor. The market reaches market equilibrium.
There is a surplus of labor.
Read the scenario. Emilio is starting a business similar to two others in the neighborhood. His price will be similar to those already established with a regular supply chain. The economy is currently steady and customers know what to expect in the business he is opening. Which factors does Emilio need to focus on to do well? (Select all that apply.) pay scale competition market share employee satisfaction
competition market share
In the realm of economics, how is labor defined? (Select all that apply.) work that people do to earn money to purchase goods or services consumption of natural resources during the production process automated work performed by computers and machines workforce hired by companies and businesses
work that people do to earn money to purchase goods or services workforce hired by companies and businesses
What is the meaning of the word economics? A) laws for the individual B) laws for the home C) laws for the people D) laws for the country
B) laws for the home
Which is true regarding consumer sovereignty? It is only present when there is perfect competition. It can be lost when monopolies are allowed to exist. It allows businesses to take advantage of consumers. It creates competition between buyers and sellers.
It creates competition between buyers and sellers. INCORRECT
What is true of a savings account? It is a low liquidity asset that receives a moderate return in interest. It is a somewhat liquid asset that receives a moderate return in interest. It is an asset that is not liquid and receives a high return on investment. It is an asset that is not very liquid and receives a moderate return in interest.
It is a low liquidity asset that receives a moderate return in interest.
When demand for a product is high, what should be done to prevent a shortage in the short term? The production should be halted immediately. The price should be adjusted upwards. The price should be adjusted downwards. The production should be increased immediately.
The price should be adjusted upwards.
Read the scenario. Jill makes $100,000 per year, and Kelly makes $40,000 per year. Under a flat tax, what would be true? The women would pay the same total amount. Kelly would pay a higher total amount. The women would pay the same percentage. Jill would pay a higher percentage.
The women would pay the same percentage.
What is the main advantage of a command economy? Everyone's basic needs are met. There is a strong incentive to innovate. People have a variety of career choices. Careful planning prevents shortages and surpluses.
There is a strong incentive to innovate. INCORRECT
Which is an advantage of the sole proprietorship and partnership business models? There is no tax liability with either type of business. They are both easy to start up. There is no personal liability with either type of business. They are both difficult to start but easy to maintain.
They are both easy to start up.
What are important arguments in favor of trade protection policies? (Select all that apply.) Trade protection policies protect infant industries. Trade protection policies increase tariff revenue. Trade protection policies protect a country's security. Trade protection policies increase people's wages.
Trade protection policies protect infant industries. Trade protection policies protect a country's security.
In an even number of points exists in a set, how do you find the median? You calculate the mean and add it to the answer found for the mode. You divide into quartiles and calculate the standard deviation. You find the mean of the two points in the middle of the set. You add all numbers in the set and subtract by the total number of the set.
You find the mean of the two points in the middle of the set.
Which is an example of a price floor? pay deduction rent control minimum wage annual raise
minimum wage
Read the sentence. The Federal Reserve Bank is responsible for entering _[blank]_ into circulation. Which correctly completes the sentence? money stocks bonds debt
money
Which type of competition is characterized by differentiated products? perfect competition oligopoly monopolistic competition monopoly
monopolistic competition
Read the sentence. When a nation has a(n) _[blank]_ advantage, they can produce a good or service at a lower cost than another nation that has the same resources. Which best completes the sentence? absolute comparative laissez-faire opportunity
absolute
What is a benefit of international trade? an increase in the variety of goods an increase in wages an improvement in working conditions an improvement in pollution
an increase in the variety of goods
What is the trade-weighted value of the dollar? an index showing the value of the US dollar compared against the US stock market an index showing the value of foreign currencies compared against the US stock market an index showing the current foreign exchange value of the US dollar compared to prior decades while accounting for inflation an index showing the measurement of the foreign exchange value of the US dollar in relation to foreign currencies commonly used in trade
an index showing the measurement of the foreign exchange value of the US dollar in relation to foreign currencies commonly used in trade
Which business is likely to have a surplus of goods? one that sets prices high one that offers discounted goods one that offers coupons one that does not produce enough
one that sets prices high
Read the scenario. Georgia wants to open her own business. She is looking for flexible hours, low overhead costs, and no need for a physical store with total control of the company. Which are her best options? (Select all that apply.) online business franchise corporation home-based business
online business home-based business
What is best defined as a "contract in which an individual loans money to a corporation and earns interest on a fixed schedule in return"? certificate of deposit mutual fund bond stock
bond
Why are many goods and services produced in a mixed market economy? businesses desire to make a profit based on the demands of their consumers a central command authority determines what will be produced and sold government regulations mandate producers to provide a selection of goods or services labor unions require members to provide a selection of goods or services
businesses desire to make a profit based on the demands of their consumers
Which product is most likely to have elastic supply in the short run? diamond ring oil MP3 player candy
candy
Which is best defined as "the borrowing of money to make purchases now and paying the money back later"? inflation credit debit collateral
credit
Which financial institutions typically have membership requirements, such as belonging to the military? commercial banks savings and loans central banks credit unions
credit unions
What is money created by government decree? fiat money commercial bank money fiduciary money commodity money
fiat money
What is defined as the market value of all final goods and services produced in a country in a specific time frame? consumer price index Dow Jones Industrial Average Human Development Index gross domestic product
gross domestic product
Who appoints the Board of Governors of the Federal Reserve System? the US Supreme Court the US Senate the US House of Representatives the US President
the US President
Read the scenario. William is looking to track sales at various stores. The price, color, and size of the item being tracked are the same at each store. Which is the dependent variable? the size the color the price the store
the store
What is the primary role of a financial intermediary? to channel funds between savers and borrowers to channel funds between foreign governments to trade stocks on the New York Stock Exchange to provide tax preparation services for corporations
to channel funds between savers and borrowers
What reasons would people have to promote social welfare? to eliminate tax burdens for the middle and upper middle class to provide for those who cannot afford food, shelter, or medical care to promote job growth and stimulate the economy to eliminate government involvement in social issues
to provide for those who cannot afford food, shelter, or medical care
A single cable company that buys up all other cable companies to reduce competition and raise prices is known as what? oligopoly antitrust trust corrupt
trust
Read the scenario. Brenda took a student loan for $24,000. She is paying 2.25 percent on an eight-year loan and has paid off $18,000 so far. How much does Brenda have left to pay? $5,400 $6,000 $10,320 $4,320
$10,320
According to the video and economists, what are some factors in supply-side economics? (Select all that apply.) price of the product lower income taxes availability of product salary of workers
price of the product lower income taxes
What is the main job of the Securities and Exchange Commission (SEC)? protect investors protect corporations protect brokers protect banks
protect investors
Which are fundamental principles of economics? (Select all that apply.) How will it be distributed? How will it be taxed? How will it be defended? How will it be produced?
How will it be distributed? How will it be produced?
Read the sentence. Some states collect a sin tax on products like alcohol and tobacco. What outcome would a state expect when levying a sin tax? It would expect an increase in demand. It would expect an increase in supply. It would expect a decrease in supply. It would expect a decrease in demand.
It would expect a decrease in demand.
Which law did President George W. Bush sign to buy toxic assets from financial institutions? FRB FDIC AIG TARP
TARP
What is true of a perfectly competitive market? The conditions do not exist in reality. The problem of scarcity does not exist. There are significant barriers to entry. The market share varies by firm.
The conditions do not exist in reality.
What happens to demand when prices increase? When prices go up, demand does not change. When prices go up, demand causes a shortage. When prices go up, demand goes down. When prices go up, demand goes up.
When prices go up, demand goes down.
How do gross national product (GNP) and gross domestic product (GDP) differ? While GNP includes investments as well as production of goods and services, GDP only includes production of goods and services. While GNP includes production by all people and businesses of a country, GDP only includes production within a country's borders. While GNP includes imports and exports of goods and services, GDP only includes the net exports of goods and services. While GNP includes production of all goods and services, GDP only includes production of final goods and services.
While GNP includes production by all people and businesses of a country, GDP only includes production within a country's borders.
Read the sentence. Sandy wants a new bed but does not want to pay for it right away. Which is her best option? a credit card a paper check a debit card a gift card
a credit card
What is the consumer price index (CPI)? a measure of tax rates a measure of unemployment a measure of inflation a measure of economic growth
a measure of inflation
Read the sentence. According to its charter, the Federal Reserve Bank is governed by a(n) _[blank]_ of governors. Which correctly completes the sentence? chamber league board association
board
Which are considered producers? (Select all that apply.) car buyer car mechanic car builder car salesman
car mechanic car builder car salesman
What is the primary tool used to measure inflation? gross domestic product durable goods shipments consumer price index gross national product
consumer price index
Which is most likely to be implemented by the government to overcome structural unemployment? temporary assistance programs to provide aid through the holidays courses or programs to help workers develop new skills tax incentives to stimulate business growth career counseling to help people find the jobs they really want
courses or programs to help workers develop new skills
What are major obstacles to economic development for developing countries? (Select all that apply.) debt to foreign banks low population growth progressive tax code external debt to foreign banks
debt to foreign banks external debt to foreign banks
What is a measure that demonstrates how producers respond to changes in the prices of products and services? equilibrium price market equilibrium law of supply elastic supply
elastic supply
Read the scenario. June has $8,000 in an online savings account at six percent interest. She needs to reach $10,000 to pay off her credit cards. How long does June have to save to reach her goal? five years four years three years six years
four years INCORRECT
Read the scenario. Kristine and Katherine are looking to team up. They want an already established business with a great corner store location and the independence to make something good turn into something better. Which are their best options? (Select all that apply.) corporation partnership online business franchise
franchise partnership
Read the sentence. To calculate _[blank]_, the quantity of final goods and services are multiplied by the price. Which best completes the sentence? gross domestic product interest rates consumer price index inflation
gross domestic product
What are the primary reasons for a market to fail? (Select all that apply.) increased burden on firms to differentiate their products due to free trade inadequate competition among firms resource immobility of land, capital, and labor inadequate information about markets among consumers and sellers
inadequate competition among firms resource immobility of land, capital, and labor inadequate information about markets among consumers and sellers
Where would an allowance be reflected on a budget sheet? income fixed expenses available to save variable expenses
income
What are consequences of a weak dollar? (Select all that apply.) increase in the cost of exports unemployment in export industries increase in the cost of imports unemployment in import industries
increase in the cost of imports unemployment in import industries
What is the rise in the general level of prices on goods and services over time called? deflation depression inflation recession
inflation
Which economics concept states that price and quantity of demand have an inverse relationship? law of macroeconomics law of demand law of supply law of microeconomics
law of demand
According to the law of demand, what increases the demand in the marketplace? lower prices more supply lower quality more choices
lower prices
What is the most important factor in maintaining a high credit score? having a low utilization ratio maintaining a variety of credit types establishing credit early making payments on time
making payments on time
Read the sentence. This economic concept exists whenever there is an exchange of goods and services between two entities. Which is most accurately described in the sentence? inflation oligopoly market monopoly
market
Read the sentence. A store orders twenty-two items from the manufacturer and sells twenty-two items. What economic condition is this? market upswing market downturn market equilibrium market crash
market equilibrium
What is a condition in which prices are stable and the quantity of the products supplied is equal to the amount of consumer demand? market equilibrium market uncertainty market crash market cost
market equilibrium
The exclusive control of the supply or trade in a product or service is identified as what? oligarchy monarchy monopoly oligopoly
monopoly
Which is a function of the Federal Deposit Insurance Corporation (FDIC)? (Select all that apply.) cover securities investments notify depositors when a bank closes verify soundness of insured banks protect consumer rights
notify depositors when a bank closes verify soundness of insured banks protect consumer rights
If Jim hides $30 under his mattress and he still has $30 there three weeks later, what function has the money fulfilled? store of value unit of account medium of exchange transferability
store of value
How are exchange rates determined in a flexible exchange rate system? supply and demand inflation and deflation US dollar compared to the pound US dollar compared to the euro
supply and demand
What is the biggest disadvantage to setting up a sole proprietorship? the financial system the personal liability the legal paperwork the tax burden
the personal liability
What is elasticity of supply? the difference between fair market value and market equilibrium the relationship between a change in price and a change in quantity supplied the difference between a shortage and a surplus for a product the relationship between a change in price and a change in consumer demand
the relationship between a change in price and a change in quantity supplied
What is the main advantage of a market economy? The government owns and manages production of goods and services. Income gaps between the rich and poor are minimized. Personal freedom allows people to innovate and allocate resources. The government can force quick economic change by amending the constitution.
Personal freedom allows people to innovate and allocate resources.
In an odd number of points in a set, how do you find the median? Find the number that appears most often in the list. Subtract the lowest number in the list from the highest. Add them all and divide by the total number. The median is the number in the middle of the set.
The median is the number in the middle of the set.
Which is a benefit of oligopolies? They tend to keep prices stable. They stimulate innovation. They are controlled by the public. They encourage competition.
They tend to keep prices stable.
What is true of labor unions? They support corporate tax cuts so that employee wages of its members will rise. They work toward worker safety at the state level and avoid most federal issues. They focus on increasing business productivity to increase employment. They use collective bargaining to gain rights for worker salaries and workplace safety.
They use collective bargaining to gain rights for worker salaries and workplace safety.
Which government tax policy is most likely to result in an increase in consumer demand? an increase in personal income tax a decrease in personal income tax a decrease in corporate tax an increase in corporate tax
a decrease in personal income tax
What is included in the consumer price index (CPI)? a sampling of goods from manufacturing all goods produced in the United States a sampling of goods across industries all goods produced by US companies
a sampling of goods from manufacturing
Which type of unemployment is caused by a contraction of the business cycle? frictional structural cyclical seasonal
cyclical
What were some of the tasks of the Tennessee Valley Authority Act? (Select all that apply.) manufacture nitrates and phosphorus for creating fertilizer create roads and bridges in the valley pay the senator for allowing this to happen generate and provide hydroelectric power to the valley
manufacture nitrates and phosphorus for creating fertilizer. generate and provide hydroelectric power to the valley
What is the purpose of a contractionary fiscal policy? to decrease the level of aggregate demand to slow rising inflation to decrease the level of aggregate supply to grow the economy to increase the level of aggregate demand to grow the economy to increase the level of aggregate supply to slow deflation
to decrease the level of aggregate demand to slow rising inflation
Which is an example of a shortage? A consumer tries to buy bread, but there is only one option. A consumer tries to buy bread, but the store is sold out. A consumer tries to buy bread, but the price is too high. A consumer tries to buy bread, but buys muffins instead.
A consumer tries to buy bread, but the store is sold out.
Which is a characteristic of the takeoff stage of Rostow's Five Stages of Economic Growth? A country begins to grow rapidly and new industries start to emerge that drive further economic development. The labor of a country is unskilled and focuses on agricultural production, animal husbandry, and the harvesting of timber. The population as a whole has its basic needs met and enjoys a high standard of living focused on consumer goods. Advancements in technology require a skilled labor force competent in electronics, medicine, and engineering.
A country begins to grow rapidly and new industries start to emerge that drive further economic development.
Which items can a person use to ensure the return of funds to a payday loan company? (Select all that apply.) ACH authorization personal check certified note verbal contract
ACH authorization personal check
Why might the economy slow during wartime? (Select all that apply.) An economy may need to divert resources to a war effort. A government may reduce tariffs with rival nations. People might stock up on products, which would cause inflation. People might choose to save money instead of buy new products.
An economy may need to divert resources to a war effort. People might choose to save money instead of buy new products.
How does an increase of the retiree (elderly) population impact the economy? An increase in nonproducing citizens increases gross national product. An increase in nonproducing citizens decreases per capita GDP. An increase in nonproducing citizens decreases the consumer price index. An increase in nonproducing citizens increases per capita GDP.
An increase in nonproducing citizens decreases per capita GDP.
What does the law of supply suggest? As prices increase, supply decreases. As prices increase, supply increases. Prices affect demand but not supply. Prices are determined by the supplier.
As prices increase, supply increases.
Which accurately provides an example of demand elasticity? As the price of gasoline increases by 5 percent, the demand for gasoline remains constant. As the price of penicillin decreases by 30 percent, the demand for penicillin remains constant. As the price of bananas decreases by 10 percent, the demand for bananas decreases by 10 percent. As the price of video games decreases by 20 percent, the demand for video games increases by 30 percent.
As the price of video games decreases by 20 percent, the demand for video games increases by 30 percent.
Read the scenario. Bill recently graduated from high school. He has decided to enter military service. Which statements best describe potential outcomes of joining the military? (Select all that apply.) Bill may have to pay higher taxes to repay the government for his military benefits. Bill may receive tuition assistance for school after serving for a certain number of years. Bill may have access to job training while he is earning a salary in the military. Bill may receive tax credits if he earns a teaching credential following his military service.
Bill may receive tuition assistance for school after serving for a certain number of years. Bill may have access to job training while he is earning a salary in the military.
For the set {16,17,17,19,22,26,32,35}{16,17,17,19,22,26,32,35}, what is the median? 20.5 17.5 22 35
20.5
ead the sentence. Jennifer wants to use her tax refund to pay off her credit card balance. How much money would Jennifer receive if her withholdings and exemptions are 100 percent accurate? $2500 $500 $0 $1000
$0
Read the scenario. Ricky wants a new car that costs $15,000. His credit union will give him a loan at 4.75 percent for 4 years. What is the total interest Ricky will pay? $641.25 $2,850.00 $3,847.50 $1,500.00
$2,850.00
How much did the United States earn in exports in 2015? $3.6 trillion $3.0 trillion $2.3 trillion $5.0 trillion
$2.3 trillion
Read the scenario. Alexa is balancing her checkbook before she leaves for college. She began with an account balance of $83. She deposited the $1200 that she earned from her summer job. She used her debit card to purchase a plane ticket back to college for $896. Going online, she was able to purchase all of her textbooks for $272. Then she put $115 into her meal account. What is the current balance in Alexa's checking account? $0 $83 $115 $32
0
Last month, Diana traveled to another state for work. She used a non-bank ATM a total of eight times. How much in non-bank ATM fees will be charged to her account? $16 $2 $10 $65
16
What is a desirable long-term growth rate of the GDP to show the economy is healthy while minimizing effects of inflation? 2 percent to 3 percent 6 percent to 8 percent 20 percent to 30 percent 10 percent to 15 percent
2 percent to 3 percent
Read the scenario. Bill applied for a payday loan. His loan amount was $300 and included a $50 fee. However, he could not repay his loan when it was due. He rolled over the loan two times, and each time it cost $45. How much did Bill spend to repay the entire loan? $410 $440 $375 $350
440
What is the price of widgets when the quantity demanded is 4? $8 $4 $6 $10
6
Which accurately describes advantages of a corporate business structure? (Select all that apply.) Owners of a corporation retain complete control of day-to-day business operations. The business becomes a legal entity separate from the person or people who set it up. A corporate business structure allows owners to raise capital by selling shares of stock. A corporation pays a corporate tax, and that rate may be lower than a personal income tax rate.
A corporate business structure allows owners to raise capital by selling shares of stock. A corporation pays a corporate tax, and that rate may be lower than a personal income tax rate. PARTIAL CREDIT
Which entity regulates the Federal Reserve Bank by requiring board governors to testify about their work? Department of Commerce US Mint Congress Supreme Court
Congress
Look at the table. Price Quantity Demanded $8 12 $4 24 What explains the change in quantity demanded, from 12 to 24, as the price decreases? Consumers cannot afford more expensive products. Consumers will buy twice as much if the price drops by half. Consumers will buy more at lower prices. Consumers react to price increases by buying more.
Consumers will buy more at lower prices.
What does the law of demand state about consumer decisions? Consumers will buy more at lower prices. Consumers will buy more based on the opportunity cost. Consumers will buy less at lower prices. Consumers will buy less based on the opportunity cost.
Consumers will buy more at lower prices.
Which describes frictional unemployment? Floyd loses his job at the factory, and he does not have the skills for other available jobs. Floyd quits his job at the store to look for a better-paying job in manufacturing. Floyd is working at a yogurt shop when he decides to quit his job and go back to school. Floyd works at a retail store during the holidays, and he is laid off at the start of the new calendar year.
Floyd quits his job at the store to look for a better-paying job in manufacturing.
Which is a true statement about demand? For demand to exist, there must be a price drop that stimulates interest. For demand to exist, the reasons a person wants a product must be reasonable. For demand to exist, there must be a desire, willingness, and ability to pay for a product. For demand to exist, the desire for a product must be coupled with available supply of the product.
For demand to exist, there must be a desire, willingness, and ability to pay for a product.
How has income inequality in the United States changed? (Select all that apply.) Income inequality has increased partly due to the rise of single parents. Income inequality has decreased due to improved public education. Income inequality has decreased due to welfare programs funded by the government. Income inequality has increased partly due to the demand for skilled workers.
Income inequality has increased partly due to the rise of single parents. Income inequality has increased partly due to the demand for skilled workers.
Which international agency consists of 189 countries, promotes international monetary cooperation, and facilitates international trade? European Union United Nations International Monetary Fund Eurasian Development Bank
International Monetary Fund
What is true of education spending? It costs the federal government more than Social Security benefits. It has increased at a greater rate than health care spending. It is a significant expense of state governments. It is the largest part of entitlement funds.
It is a significant expense of state governments.
Which act enacted by President Barack Obama includes expanded access to private and public health insurance for citizens, yet continues to be a point of contention both politically and socially? Personal Responsibility and Work Opportunity Act Patient Protection and Affordable Care Act Economic Opportunity Act Family and Medical Leave Act
Patient Protection and Affordable Care Act
Read the sentence. The local power company is a natural monopoly. What does this mean for the consumer? Consumers only have one choice even if there are several options. Prices are regulated by the government to keep costs lower. Upgrades to the system are paid for only by the power company. The power company can set whatever rate it chooses.
Prices are regulated by the government to keep costs lower.
Which region of the world accounts for the most people living in extreme poverty? India South America Sub-Saharan Africa China
Sub-Saharan Africa
The Tennessee Valley Authority Act helped open which river up for trade and navigation? Mississippi River Missouri River Colorado River Tennessee River
Tennessee River
Read the sentence. The gross domestic product (GDP) shrunk by 2 percent over a 12-month period. What can you infer about the economy? The GDP indicates an economic expansion. The GDP indicates a decline in interest rates. The GDP indicates an economic contraction. The GDP indicates a rise on interest rates.
The GDP indicates an economic contraction.
What is an argument for free trade? The supply of products decreases. The distribution of income improves. The availability of natural resources increases. The possibility of a trade freeze decreases.
The possibility of a trade freeze decreases.
Which was most used by early US colonists to purchase and trade goods? gold standard commodity money Spanish dollars barter system
barter system
What was the name of the money the Continental Congress authorized? greenbacks dollars gold standards continentals
continentals
On average, who earns the highest salaries? A) people with a professional degree B) people with a bachelor's degree C) people with an associate's degree D) people with a master's degree
A) people with a professional degree
Which disadvantage of the value-added tax (VAT) is most likely to be cited by people with low incomes? As a regressive tax, low-income families are forced to pay more than high-income families. As a progressive tax, high-income families are offered deductions that are not offered to low-income families. As a property tax, home ownership is more difficult for low-income families. As a consumption tax, everyone pays the same amount, regardless of ability to pay.
As a consumption tax, everyone pays the same amount, regardless of ability to pay.
Which items make up the marketing mix? A) place, product, personnel, pay B) place, price, promotion, product C) place, page, production, piece D) place, price, production, planning
B) place, price, promotion, product
What are variable costs? They are costs that remain the same regardless of units produced. They are costs that change based on the number of units produced. They are costs that change the most during stage one of production. They are costs that remain the same regardless of the stage of production.
They are costs that change based on the number of units produced.
How do business partners share liability? They share liability based on who invested the most. They share liability only if ordered to by a court ruling. They share liability based on the partnership agreement. They share all liability jointly.
They share all liability jointly.
How can the government combat structural unemployment? increase the retirement age to receive Social Security benefits increase spending on imports resulting in a trade deficit discontinue Pell grants for legal immigrants implement new training programs to help workers acquire new skills
implement new training programs to help workers acquire new skills
Read the sentence. The US government issued greenbacks during the Civil War. What were greenbacks? gold coins only issued through state banks copper coins that turned green through wear and tear paper money printed with green ink on the reverse side bonds using green paper to help support the war effort
paper money printed with green ink on the reverse side
What is the definition of risk? the rate of return on an investment the liquidity of an investment the value of interest rates at the time of investment the possibility of losing value on an investment
the possibility of losing value on an investment
Read the scenario. Debbie needs to know how much she will pay on her car loan. Using the simple interest formula, how much will she pay with a principal balance of $12,000, an interest rate of 5 percent, and a 60-month loan? $12,000 $36,000 $3,000 $15,000
$15,000
Read the scenario. Jan has auto insurance with a $250 deductible. When she is in a hit-and-run accident, she learns that the repairs will cost $4,500. What will Jan's out-of-pocket expenses be? $250 $4,750 $0 $4,500
$250
Read the scenario. Rob is balancing his checkbook. His beginning checking account balance was $1. He deposited a check for $77 from his part-time job and $37 in cash that he received in tips into the account. Using his debit card, he purchased $25 worth of gas. On a night out with friends, Rob used his debit card to spend $8 on a movie ticket and $12 on snacks. Rob's mother told him that he needs to put money into a savings account. So Rob withdrew the tip money from his checking account and put it into a new savings account. What is Rob's checking account balance? $70 $32 $33 $69
$33
Read the scenario. In the simple interest formula, I=PrtI=Prt, Robert needs to calculate total monies earned on a savings account with the following information: principal = $4,000; interest rate = 2.5 percent; and time = 7 years. What is the total money in the account? $4,700 $100 $4,000 $700
$4,700
Which most accurately describes a firm's goal regarding revenue? A firm will continue producing until its marginal revenue exceeds its marginal cost. A firm will stop producing before its marginal costs exceed its marginal revenue. A firm will stop producing when its marginal cost has reached stage III of production. A firm will continue producing until its marginal revenue equals its marginal cost.
A firm will continue producing until its marginal revenue equals its marginal cost.
What would be a government response to slow inflation? A government could increase interest rates to encourage business loans. A government could decrease taxes to decrease the money in circulation. A government could raise taxes to decrease the money in circulation. A government could decrease interest rates to discourage business loans.
A government could raise taxes to decrease the money in circulation.
What does a high credit score tell a lender? A high score suggests a person is very likely to repay debt. A high score suggests a person has no unpaid debt. A high score suggests a person has a lot of unpaid debt. A high score suggests a person is not likely to repay debt.
A high score suggests a person is very likely to repay debt.
How does the length of credit history impact a person's credit score? A longer history has a negative impact. A longer history is not considered a factor. A longer history is the most important factor. A longer history has a positive impact.
A longer history has a positive impact.
Which is an argument in favor of a minimum wage? The economy is less likely to enter a recession when workers make at least a minimum wage. A minimum wage helps workers afford housing and food for their families. An increase in minimum wage reduces inflation and protects the value of the dollar. Setting a minimum wage helps prevent the unemployment rate from rising.
A minimum wage helps workers afford housing and food for their families.
In which situation is a consumer exercising consumer sovereignty? A person likes the food at a restaurant and attempts to copy the recipes at home. A person does not like the food served at a restaurant and refuses to pay. A person likes the food at a restaurant and recommends it to friends. A person does not like the food served at a restaurant and chooses another restaurant.
A person does not like the food served at a restaurant and chooses another restaurant.
Which is an example of specialization? A college student works on a part-time basis while going to school. A person studies nursing and works in a hospital. A person stays at the same company until retiring. A college student gets a double major in math and economics.
A person studies nursing and works in a hospital.
Which accurately describes a principle argued by Adam Smith to drive a free market economy? Adam Smith co-wrote the Communist Manifesto with Karl Marx, which promoted communism. Adam Smith and Frederic Engels promoted socialism in which government owns manufacturing. Adam Smith argued for a traditional economy in which history and tradition determines manufacturing. Adam Smith argued for a laissez-faire economy that is free of government intervention.
Adam Smith argued for a laissez-faire economy that is free of government intervention.
Read the scenario. Jorge lives in a country that uses a progressive tax system in which his taxable income is taxed at a specific percentage. In 2016, Jorge made $90,000 and was taxed at 25 percent. He is due for a $5,000 raise in 2017. At that time, his tax bracket will change to 30 percent. Which is true regarding Jorge's financial situation after his raise? After the raise, Jorge will take home $5,000 more per year. After the raise, Jorge will take home $1,000 less per year. After the raise, Jorge will take home $5,000 less per year. After the raise, Jorge will take home $1,000 more per year.
After the raise, Jorge will take home $1,000 less per year.
Read the statement. _[blank]_ of the Constitution states that the government's collection of income taxes is legal. Which accurately completes the sentence? Article II Amendment XVI Article I Amendment XIX
Amendment XVI
Why is it important to use multiple methods of both broadcast and online media advertising? A) Using multiple methods allows for the most opportunity in case there are power outages. B) Using multiple methods allows for wider exposure to advertise the product or service. C) Using multiple methods restricts opportunities to advertise the product or service. D) Using multiple methods allows for the most criticism of the product or service.
B) Using multiple methods allows for wider exposure to advertise the product or service.
Read the sentence. Capitalism drives the constant rotation of business opportunity, _[blank]_, and failure. Which most accurately completes the sentence? A) deflation B) growth C) inflation D) change
B) growth
Which correctly explains fixed expenses? Barbara attended a hockey game with her friends last month. Barbara refilled her car with gas after driving to San Diego for a concert. Barbara paid the rent on the first day of the month to keep her apartment. Barbara purchased new clothes for the party this Saturday.
Barbara paid the rent on the first day of the month to keep her apartment.
What is economic incentive in a free enterprise economy? Buyers have the right to choose the goods and services they want and need. Businesses have the right to own property such as cars, houses, and land. People buy and sell products or services they want, which makes them happy. Businesses sell goods and services and people take jobs for income.
Businesses sell goods and services and people take jobs for income.
What impact could the opening of a military base have on a local economy? Unemployment would increase as government spending would decrease. Businesses would spring up to meet the needs of those on the base. The competition from the base would force local businesses to close. Police officers would be laid off since security would be provided by the military.
Businesses would spring up to meet the needs of those on the base.
Read the scenario. Car Company X manufactures automobiles. Its costs of production have recently risen because the cost of electricity needed to power the manufacturing plants have increased. Which best describes the outcome of the above scenario? Car Company X will decrease the supply of automobiles it produces and likely will sell them at lower prices. Car Company X will increase the supply of automobiles it produces and will sell them at higher prices. Car Company X will increase the supply of automobiles it produces and will sell them at lower prices. Car Company X will decrease the supply of automobiles it produces and likely will sell them at higher prices.
Car Company X will decrease the supply of automobiles it produces and likely will sell them at higher prices.
Which accurately describes price indexes economists use to monitor prices and inflation? Consumer price indexes economists use to measure prices and inflation include the gross national product and the gross domestic product. Consumer price indexes economists use to measure prices and inflation include the consumer price index, the producer price index, and the GDP deflator. Consumer price indexes economists use to measure prices and inflation include NASDAQ, S&P 500, and the Dow Jones. Consumer price indexes economists use to measure prices and inflation include the Lorenz curve and the Phillips curve.
Consumer price indexes economists use to measure prices and inflation include the consumer price index, the producer price index, and the GDP deflator.
0 of 0 Why would the government require businesses to disclose information to consumers? (Select all that apply.) Consumers may lack the level of knowledge to assess a threat on their own. Consumers often buy products without taking sufficient time to investigate them. Businesses could go bankrupt if they sell faulty products to consumers. Businesses may sell dangerous items to consumers in order to make a profit.
Consumers may lack the level of knowledge to assess a threat on their own. Businesses could go bankrupt if they sell faulty products to consumers.
How does the law of comparable advantage lead to international trade? Countries that have more resources are able to trade for a wider variety of items that can be offered for sale. Countries make products they can produce efficiently and are able to get the rest of what they need through trade. Countries that cannot produce products efficiently have to trade for the goods and services that other countries have. Countries that do not engage in trade are in a stronger position economically than countries that do trade.
Countries make products they can produce efficiently and are able to get the rest of what they need through trade.
What is the function of credit cards? Credit cards enable individuals to make purchases of goods and services as long as the balance is paid off by the end of the month. Credit cards enable individuals to make purchases of goods and services by withdrawing funds from a person's checking or savings account. Credit cards enable individuals to make purchases of goods and services by requesting companies hold items until they are paid with cash. Credit cards enable individuals to borrow against their line of credit to purchase goods and services.
Credit cards enable individuals to borrow against their line of credit to purchase goods and services.
Which accurately describes the difference between elastic and inelastic demand? Elastic demand refers to a change in production by producers when the price of a good or service changes, whereas inelastic demand refers to the lack of change in production as prices change. Elastic demand refers to a change in demand by consumers when the price of a good or service changes, whereas inelastic demand refers to the lack of change in demand as prices change. Inelastic demand refers to a change in demand by consumers when the price of a good or service changes, whereas elastic demand refers to the lack of change in demand as prices change. Inelastic demand refers to a change in production by producers when the price of a good or service changes, whereas elastic demand refers to the lack of change in production as prices change.
Elastic demand refers to a change in demand by consumers when the price of a good or service changes, whereas inelastic demand refers to the lack of change in demand as prices change.
Which accurately describes the difference between elastic and inelastic supply? Elastic supply refers to a change in production by producers when the price of a good or service changes, whereas inelastic supply refers to the lack of change in production as prices change. Elastic supply refers to a change in production by producers when the price of a good or service changes, whereas inelastic demand refers to the lack of change in production as prices change. Elastic supply refers to a change in spending by consumers when the price of a good or service decreases, whereas inelastic supply refers to lack of change in spending as prices decrease. Inelastic supply refers to a change in spending by consumers when the price of a good or service decreases, whereas elastic supply refers to lack of change in spending as prices decrease.
Elastic supply refers to a change in production by producers when the price of a good or service changes, whereas inelastic supply refers to the lack of change in production as prices change.
Which government agency provides consumer protection in case of a bank failure and plays a direct role in the US economy? Internal Revenue Service Securities and Exchange Commission Federal Deposit Insurance Corporation National Security Council
Federal Deposit Insurance
Which social welfare government acts and programs were enacted as a result of the Great Depression? (Select all that apply.) Patient Protection and Affordable Care Act Federal Deposit Insurance Corporation (FDIC) No Child Left Behind Emergency Banking Act
Federal Deposit Insurance Corporation (FDIC) Emergency Banking Act
What 1886 Chicago event was a disturbance that broke out during a campaign by union members who were advocating for an eight-hour workday? 12th Street Riot Pullman Strike Haymarket Riot Homestead Strike
Haymarket Riot
Which best describes Adam Smith's view on economics and government involvement in business? He preached enlightened absolutism and the monarchy's control of business and commerce. He wrote The Communist Manifesto and believed the government should control commerce. He believed in a laissez-faire policy in which the government does not interfere in commerce. He believed the Catholic Church should oversee a nation's business and commerce.
He believed in a laissez-faire policy in which the government does not interfere in commerce.
Read the scenario. Larry needs a new computer because his old one just crashed. The computer he chooses costs $1,200. He has enough in his checking account to cover the cost. He also has a credit card with a $2,000 limit and $1,200 available on it. How should Larry purchase his new computer? He should use his credit card because he gets points and does not need to pay back the card immediately. He should use his credit card and pay extra interest since his checking account is now empty. He should use his debit card, which will significantly reduce his future credit card options. He should use his debit card so that he does not risk paying extra money in interest over time.
He should use his debit card so that he does not risk paying extra money in interest over time.
What impact can taxes have on the economy? Lower taxes reduce trade because the government has fewer funds to invest on roads. Lower taxes increase unemployment because the government cannot hire as many workers. Higher taxes reduce supply because the government has more money to invest in goods and services. Higher taxes reduce demand because consumers have less money to spend.
Higher taxes reduce demand because consumers have less money to spend.
Which describes a way that gross domestic product (GDP) is used to measure the economy? If GDP increases for six months straight, a country is facing rapid inflation. If GDP decreases for 12 months straight, a country is in a trough. If GDP increases for 12 months straight, a country is in a contraction. If GDP decreases for six months straight, a country is in a recession.
If GDP decreases for six months straight, a country is in a recession.
How does a change in population impact gross domestic product (GDP)? If the population increases and production increases, per capita GDP will decrease. If the population decreases and production decreases, per capita GDP will increase. If the population decreases and production increases, per capita GDP will decrease. If the population increases but production stays the same, per capita GDP will decrease.
If the population increases but production stays the same, per capita GDP will decrease.
Which are disadvantages of credit? (Select all that apply.) There is an ease of shopping anytime, anywhere, even online or over the phone. If you are late making payments, interest rates can increase. Making payments on time shows lenders that you are financially responsible. If you fail to make payments, you can hurt your credit score.
If you fail to make payments, you can hurt your credit score. If you are late making payments, interest rates can increase.
What is a difference between perfect competition and monopolistic competition? In a perfectly competitive market, products are perfect substitutes for each other. In a monopolistic market, products are differentiated. In a monopolistic market, products are perfect substitutes for each other. In a perfectly competitive market, products are differentiated. In a monopolistic market, there are no barriers to entry. In a perfectly competitive market, the barriers to entries are high. In a perfectly competitive market, there are no barriers to entry. In a monopolistic market, the barriers to entry are high.
In a perfectly competitive market, products are perfect substitutes for each other. In a monopolistic market, products are differentiated.
What consequences occur when there is insufficient competition in the marketplace? (Select all that apply.) Inadequate competition can lead to poor allocation of scarce resources by large firms. Inadequate competition can lead large firms to lobby and influence politicians. Inadequate competition can lead to artificial shortages and higher prices. Inadequate competition can lead to laissez-faire practices by the government.
Inadequate competition can lead to poor allocation of scarce resources by large firms. Inadequate competition can lead large firms to lobby and influence politicians. Inadequate competition can lead to artificial shortages and higher prices.
How does increasing life expectancy affect population size? Increasing life expectancy increases the death rate, which decreases population size. Increasing life expectancy decreases the death rate, which increases population size. Increasing life expectancy increases the death rate, which increases population size. Increasing life expectancy decreases the death rate, which decreases population size.
Increasing life expectancy decreases the death rate, which increases population size.
Which accurately describes a downside of the Tennessee Valley Authority Act? Independent electric companies went out of business due to lower government rates. The Tennessee Valley Authority increased healthcare costs to residents of the Tennessee Valley. The Tennessee Valley Authority caused devastating air and water pollution to residents of the Tennessee Valley. People had to move due to the damming of the river and reduced flooding.
Independent electric companies went out of business due to lower government rates.
What are consequences of rapid inflation? (Select all that apply.) Individual purchasing power decreases, which results in a decrease in demand. Savings accounts become less desirable because interest earned is lower than inflation Individual purchasing power increases, which results in an increase in demand. People postpone purchasing expensive items, such as homes, until prices drop.
Individual purchasing power decreases, which results in a decrease in demand. People postpone purchasing expensive items, such as homes, until prices drop. needs a third one
How can a developing nation improve its economy if it lacks natural resources? It can place high tariffs on all of its imports. It can default on loans owed to foreign banks. It can engage in international trade. It can flood foreign exchange markets with its currency.
It can engage in international trade.
Why is measuring economic performance important? (Select all that apply.) It can help legislators know whether they should write more tax laws. It can help individuals know how their standard of living could be affected. It can help governments know how their spending could be affected. It can help businesses know how their ability to take risks with new products could be affected.
It can help individuals know how their standard of living could be affected. It can help governments know how their spending could be affected. It can help businesses know how their ability to take risks with new products could be affected.
What is true about spending on Social Security? It cannot be cut because it is part of mandatory spending. It is the only budget item classified as entitlement spending. It is second only to military spending as part of the federal budget. It is the largest portion of discretionary spending.
It cannot be cut because it is part of mandatory spending.
How does an increase in the price of a substitute affect demand for a product? It causes demand to remain the same because people are not concerned with substitutes. It causes demand to go up because the product is less expensive than its substitute. It causes demand to go down because people are concerned about the higher price. It causes demand to fluctuate because people are unsure of the market.
It causes demand to go up because the product is less expensive than its substitute.
What is the purpose of the Internal Revenue Service? It conducts the nation's monetary policy, such as setting interest rates. It provides deposit insurance for banking customers. It manufactures and prints the nation's money supply. It collects income taxes for the federal government.
It collects income taxes for the federal government.
How does the consumer price index help the consumer? It identifies tax loopholes in the US tax code. It provides information concerning interest rates. It compares the prices of items from month to month. It predicts future income tax rates for households.
It compares the prices of items from month to month.
What is the purpose of the Office of Inspector General? It conducts audits of the Federal Reserve to eliminate fraud and waste. It oversees trade activities of the Department of Commerce. It conducts audits of the Federal Trade Commission to eliminate fraud and waste. It provides security and oversight for the United States Mint.
It conducts audits of the Federal Reserve to eliminate fraud and waste.
The Federal Trade Commission (FTC) protects consumers in what ways? (Select all that apply.) It allows businesses to make money at the expense of the consumer. It develops rules and guidelines for maintaining healthy marketplaces. It sells private information to companies so that they can market to consumers. It conducts investigations that can result in lawsuits for lawbreakers.
It develops rules and guidelines for maintaining healthy marketplaces. It conducts investigations that can result in lawsuits for lawbreakers.
Which is a disadvantage of a free market economy? It forces businesses to make choices. It does not provide public goods. It requires government regulation. It promotes intense competition.
It does not provide public goods.
How is the Federal Reserve funded? It earns revenue by charging ATM and deposit fees. It earns interest from government securities. It is funded by Congress. It is funded by the White House.
It earns interest from government securities.
How does familiarity with prices affect the market? (Select all that apply.) It forces businesses to respond to consumer demand. It makes allocating resources more efficient. It leads to frequent changes in production. It allows people the opportunity to negotiate.
It forces businesses to respond to consumer demand. It makes allocating resources more efficient.
Why is scarcity a significant problem? It requires people to conserve resources. It determines the type of economic system used. It forces people to make choices. It leads to opportunity cost.
It forces people to make choices.
What does the JOBS Act do for companies? (Select all that apply.) It gives private companies more access to capital from various sources. It discourages entrepreneurship and encourages big business monopolies. It makes it easier for certain companies to go public on US stock exchanges. It allows companies to buy back stock at a discounted rate without penalty.
It gives private companies more access to capital from various sources. It makes it easier for certain companies to go public on US stock exchanges.
Why is the marketing mix important to advertisers? (Select all that apply.) It helps companies decide how long the product will take to be produced. It helps advertisers to spread the word about a product being available. It helps determine how much money people will have to buy a product. It helps define a particular product and identify what makes it different.
It helps advertisers to spread the word about a product being available. It helps define a particular product and identify what makes it different.
Why is most insider trading against the law? It helps insiders benefit from information that no one else can access. It hurts the economy by increasing the number of trades made in a short time. It creates opportunities for company employees that are not widely available. It allows government officials to profit on every stock trade.
It helps insiders benefit from information that no one else can access.
What is the purpose of the Tennessee Valley Authority? (Select all that apply.) It generates and provides inexpensive hydroelectric power to the Tennessee Valley. It improves navigation along the Tennessee River. It develops agriculture and forest land in the Tennessee Valley. It provides state-sponsored healthcare to citizens of the Tennessee Valley.
It improves navigation along the Tennessee River. It develops agriculture and forest land in the Tennessee Valley. PARTAIL CREDIT NEED TO PICK 3
How does a rise in life expectancy impact population growth? It reverses population growth. It does not impact population growth. It increases population growth. It slows population growth.
It increases population growth.
What is true of military spending in the United States? It is a major portion of mandatory spending. It is a minor portion of mandatory spending. It is a major portion of discretionary spending. It is a minor portion of discretionary spending.
It is a major portion of discretionary spending.
Which advantage of a value-added tax is most likely to win Americans' acceptance? It is much more difficult to evade paying taxes. People who make the least will not have to pay taxes. Many more deductions are available. The tax is on capital gains, not income.
It is much more difficult to evade paying taxes.
Which is a feature of a flat tax? It is regressive and increases for consumers with lower incomes. It is not progressive and remains the same for all consumers. It is more complicated than other tax systems. It provides greater tax deductions for consumers.
It is not progressive and remains the same for all consumers.
Which are characteristics of macroeconomics? (Select all that apply.) It demographically measures the number of households demanding products or services. It examines how much is produced and the consumers' willingness to buy. It measures exports and imports for international trade. It deals with the overall condition of the economy.
It measures exports and imports for international trade. It deals with the overall condition of the economy.
Read the statement. Country A is running a trade deficit. What must Country A do to reverse this trend? It must increase trade exports with other countries. It must continue the course it is currently following. It must print more money so people will spend more. It must hire more workers to increase products for export.
It must increase trade exports with other countries.
What are functions of the Federal Reserve? (Select all that apply.) It creates US coins. It offers financial services within the government. It enters US currency into circulation. It prints US dollars.
It offers financial services within the government. It enters US currency into circulation.
How does the World Bank Group assist developing countries? It offers loans to developing countries. It provides deposit insurance for banking customers. It creates legislation to eliminate tariffs. It funds military campaigns against terrorist organizations.
It offers loans to developing countries.
What is the function of a union? It enforces legislation that ensures workers receive fair compensation. It works to pass right-to-work laws in all states so that anyone can get a job. It offers protection for workers who may have little power as individuals. It negotiates strong salaries so that workers never have to go on strike.
It offers protection for workers who may have little power as individuals.
How does the government protect investors? It provides higher interest rates so that consumers can get a larger return on their investments. It sells insider trading information to consumers so that they will make knowledgeable decisions about where to invest their money. It buys securities in new companies to help them grow so that investors will not go bankrupt. It oversees the buying and selling of securities so that consumers are not taken advantage of by businesses.
It oversees the buying and selling of securities so that consumers are not taken advantage of by businesses.
How is the JOBS Act helping to stimulate business? (Select all that apply.) It offers easier registration for a public company under federal regulations. It restricts companies on initial public offerings (IPOs) of their stock. It allows businesses to claim bankruptcy and not have to pay taxes. It permits companies to sell securities through crowdfunding or the Internet.
It permits companies to sell securities through crowdfunding or the Internet. It offers easier registration for a public company under federal regulations.
Which is an argument against implementing a value-added tax (VAT)? It places an unfair burden on people with higher incomes. It places an unfair burden on people with lower incomes. It places an unfair burden on large corporations. It places an unfair burden on small businesses.
It places an unfair burden on people with lower incomes.
Read the sentence. A few states have adopted a balanced budget amendment. What is the purpose of the balanced budget amendment enacted by these states? It requires states to spend a set minimum on public education. It requires states to spend a set minimum on entitlement programs. It prevents states from deficit spending. It prevents states from accepting federal funds.
It prevents states from deficit spending.
What is the purpose of a minimum wage? It offers companies a subsidy when they cannot afford to pay high salaries. It offers a subsidy to workers whose job does not pay enough. It protects workers by providing a price floor for wages. It protects companies by setting a price ceiling for wages.
It protects workers by providing a price floor for wages.
How does the Federal Reserve stabilize and safeguard the nation's economy? (Select all that apply.) It distributes currency and oversees fiscal conditions. It regulates banks and defends consumer credit rights. It implements American monetary policy. It regulates and oversees the NASDAQ stock exchange.
It regulates banks and defends consumer credit rights. It implements American monetary policy. needs a third one
What does the FDIC do when a bank fails? (Select all that apply.) It sells off a bank's remaining assets to settle any debts. It prosecutes any bank owners who violated the law. It notifies depositors if their bank has been sold. It provides advice to consumers on choosing a new bank.
It sells off a bank's remaining assets to settle any debts. It notifies depositors if their bank has been sold.
What is true regarding price? (Select all that apply.) It is the value of a product in terms of money. It is determined by businesses based on production costs. It tells the government how much they can charge in taxes. It sends a message to consumers about the worth of a product.
It sends a message to consumers about the worth of a product. It is the value of a product in terms of money.
Read the scenario. A business sells widgets. Each week, it receives a shipment on Monday and is sold out by Tuesday. This leaves many people in the community without widgets. What should the business do to help the market reach equilibrium? It should lower the price of the widgets. It should increase the price of the widgets. It should ration the widgets so everyone gets one. It should offer coupons for the widgets
It should increase the price of the widgets.
What does the consumer price index (CPI) measure? It measures the change in stock prices against a change in consumer prices. It averages the total cost of all final goods produced. It tracks increases in prices to measure inflation. It adds the cost of goods produced, and then subtracts exports.
It tracks increases in prices to measure inflation.
Why did Congress create the Federal Reserve? It was created to provide high interest rate loans to Mexico and Canada. It was created to provide economic stability and a remedy for uninsured investments. It was created to oversee trade and commerce between all 50 states. It was created to provide a standard form of currency for the 13 colonies.
It was created to provide economic stability and a remedy for uninsured investments.
What does the law of variable proportions say about marginal product? It will decline if multiple inputs are increased. It will decline if only one input is increased. It will increase if labor inputs are increased. It will increase if all inputs are increased slowly.
It will decline if only one input is increased.
Read the sentence. The latest holiday toy has arrived in the store. What will happen to the price as the holiday approaches? It will decrease due to more demand and less supply. It will decrease due to more demand and more supply. It will increase due to more demand and less supply. It will increase due to less demand and more supply.
It will increase due to more demand and less supply.
Read the sentence. A new technology is created to help a manufacturer. How will this affect production? It will increase demand because the price will increase to pay for the new technology. It will increase demand because the salaries will increase to pay for new production. It will increase supply because the new technology will cost more. It will increase supply because the item can now be produced at a lower price.
It will increase supply because the item can now be produced at a lower price.
Which antipoverty program offers medical insurance for low-income individuals and families? Social Security Pell grants Medicaid Capital gains
Medicaid
What were the final agreements between Microsoft and the Department of Justice? (Select all that apply.) Microsoft could continue as before in competing with other companies without penalty. Microsoft had to revise its licensing practices and grant usage rights to share its programming. Microsoft had to allow users to remove middleware products like web browsers. Microsoft could choose the oversight committee to ensure it complied with the decision.
Microsoft had to revise its licensing practices and grant usage rights to share its programming. Microsoft had to allow users to remove middleware products like web browsers.
What was the original ruling on the US vs. Microsoft Corporation case by Judge Jackson? Microsoft did nothing wrong, but it still had to donate computers to schools as punishment. Microsoft was a monopoly and had to be split into separate hardware and software divisions. Microsoft did nothing wrong and was just trying to compete in the marketplace. Microsoft was a monopoly, but due to its charitable donations, it could continue its business.
Microsoft was a monopoly and had to be split into separate hardware and software divisions.
How does competition differ between a monopoly and an oligopoly? Monopolistic competition has product differentiation, while oligopolistic competition does not. Monopolistic competition is imperfect, while oligopolistic competition is perfect. Monopolistic competition takes place in rural areas, but oligopolistic competition takes place in urban areas. Monopolistic competition involves many small firms, while oligopolistic competition involves a few large firms.
Monopolistic competition involves many small firms, while oligopolistic competition involves a few large firms.
Which is true regarding elasticity of supply? A product is either completely elastic or inelastic. A factor in supply elasticity is production difficulty. An inelastic product will never become elastic. A product's price does not play a role in its elasticity.
NOT: A product is either completely elastic or inelastic. An inelastic product will never become elastic.
What is a potential negative outcome when the government seeks to ensure specific market outcomes? lack of consumer protection unpleasant information shared by businesses decrease in business tax incentives regulations that slow down innovations
NOT: lack of consumer protection decrease in business tax incentives
What does a low price signal about a potential producer/supplier? that the producer may be creating a product shortage in a market that the producer might not find many consumers if it offers that product for sale that it will be easy for the producer to enter the market to offer that product that it is financially viable for the producer to offer that product for sale
NOT: that it is financially viable for the producer to offer that product for sale that the producer might not find many consumers if it offers that product for sale
Which is an example of regional cooperation to promote economic growth? Neighboring countries sign a pact to limit immigration into their countries. Neighboring countries set up quotas on resources that can be sold. Neighboring countries remain separate but work together to promote peace. Neighboring countries negotiate tariffs and duties regarding trade.
Neighboring countries sign a pact to limit immigration into their countries. Neighboring countries set up quotas on resources that can be sold. Wrong
Which explains why cutting the federal budget is difficult? Only discretionary spending can be cut, and it is a smaller portion of the budget. Discretionary spending has become a portion of the budget, so it is difficult to cut. Only mandatory spending is renewed every year, and it cannot be cut. Mandatory spending impacts more people, which makes it difficult to cut.
Only discretionary spending can be cut, and it is a smaller portion of the budget.
What is the definition of the Law of Variable Proportions? Output in the short run will change when one input is varied and others remain constant. As prices increase, the supply for goods and services increases. As prices increase, the demand for goods and services decreases. Additional output of a product is created when one more unit of input is introduced.
Output in the short run will change when one input is varied and others remain constant.
How does the existence of a large federal debt slow economic growth? (Select all that apply.) People are concerned about the future and do not want to invest. The government may raise taxes to eliminate deficits, which could slow down the economy Unemployment becomes a problem, which leads to less real income. Inflation rises rapidly, which discourages demand.
People are concerned about the future and do not want to invest. The government may raise taxes to eliminate deficits, which could slow down the economy
What impact can government policies have on the business cycle? Policies that raise interest rates may cause an economic contraction. Policies that lower taxes may cause an economic contraction. Policies that lower interest rates may cause an economic contraction. Policies that decrease spending may cause an economic expansion.
Policies that raise interest rates may cause an economic contraction.
Which correctly explains the effects of population growth in developing countries? Population growth leads to a larger labor force and skilled workers, which improves the economy in developed countries. Population growth is lower in less developed countries due to high infant mortality, creating fewer demands on education. Population growth improves a developing nation's credit in the eyes of foreign banks, and its ability to borrow money. Population growth is higher in less developed countries, creating greater demands on health care and education.
Population growth is higher in less developed countries, creating greater demands on health care and education.
How does an oligopoly help the consumer? (Select all that apply.) Product prices tend to remain stable, so the consumer comes back. New companies are easy to form and compete with established ones. Companies become innovators as they seek bigger market share. Consumers pay more since products are always changing to meet the need.
Product prices tend to remain stable, so the consumer comes back. Companies become innovators as they seek bigger market share.
What are potential causes of a business cycle expansion? (Select all that apply.) Production increases to meet new demands. Interest rates are raised to stop inflation. Interest rates are lowered to encourage borrowing. A new industry is developed.
Production increases to meet new demands. Interest rates are lowered to encourage borrowing. A new industry is developed.
Why would a business want to be in the diminishing returns stage of production? (Select all that apply.) Production is close to maximum. Production is still getting additional total product. Production is no longer necessary to monitor inputs. Production is no longer necessary to add inputs.
Production is close to maximum. Production is still getting additional total product.
What are potential causes of a business cycle contraction? (Select all that apply.) Production is slowed to minimize excess inventory. Interest rates are raised, making it more expensive to borrow money. War causes people to become reluctant to purchase goods. Interest rates are lowered, making it easier to borrow money.
Production is slowed to minimize excess inventory. Interest rates are raised, making it more expensive to borrow money. War causes people to become reluctant to purchase goods.
What prevents a monopolistic competition from being perfectly competitive? Products are not identical. The barriers to entry are significant. The market is dominated by one firm. Consumers are not knowledgeable.
Products are not identical.
Read the scenario. Goodwheel Tire Company discovered that the material it uses in its tires cause the tire to fail at high speeds. By law, what is Goodwheel required to do? Federal trade laws require Goodwheel to replace the tires if they have not been used. Buyer beware laws do not require Goodwheel to do anything because goods were purchased "as is." Public disclosure laws require Goodwheel to inform consumers as soon as possible. Consumer sovereignty laws do not require Goodwheel to do anything because they suggest that the buyer and seller have no relationship once the good is purchased.
Public disclosure laws require Goodwheel to inform consumers as soon as possible.
Which accurately describes differences between state and local government expenditures? State expenditures include police and fire departments, unlike local expenditures. Public welfare programs at the local level make up a small part of the budget compared to the state level. Local expenditures include national parks and correctional facilities, unlike state expenditures. Public welfare programs at the local level make up a large part of the budget compared to the state level.
Public welfare programs at the local level make up a small part of the budget compared to the state level.
How is real GDP different from nominal GDP? Real GDP is not adjusted for inflation and often appears higher than nominal GDP. Real GDP is not adjusted for inflation and often appears lower than nominal GDP. Real GDP is adjusted for inflation and often appears lower than nominal GDP. Real GDP is adjusted for inflation and often appears higher than nominal GDP.
Real GDP is adjusted for inflation and often appears lower than nominal GDP.
Why does nominal gross domestic product (GDP) sometimes seem larger than real GDP? Real GDP uses an accurate calculation, whereas nominal GDP does not. Real GDP includes inflation in its calculation, whereas nominal GDP does not. Real GDP counts only final products, whereas nominal GDP does not. Real GDP counts imports, whereas nominal GDP does not.
Real GDP uses an accurate calculation, whereas nominal GDP does not. Real GDP counts only final products, whereas nominal GDP does not. Wrong
What are examples of public disclosure required by the US government? (Select all that apply.) Real estate agents must disclose problematic information about a home to their clients. Food products must have nutrition labels and lists of ingredients. Sin taxes are applied to alcohol and tobacco because they pose health risks. Car companies must provide information regarding gas mileage.
Real estate agents must disclose problematic information about a home to their clients. Food products must have nutrition labels and lists of ingredients Car companies must provide information regarding gas mileage.
What are examples of government involvement in a mixed market economy? (Select all that apply.) Requiring drug companies provide a list of potential side effects. Requiring car companies to provide information regarding gas mileage. Requiring food companies to provide nutrition labels. Requiring steel, coal and oil companies to establish trade unions.
Requiring drug companies provide a list of potential side effects. Requiring car companies to provide information regarding gas mileage. Requiring food companies to provide nutrition labels.
How does the circular flow of the financial system work? Corporations deposit funds into financial intermediaries, who then lend a portion to Federal Reserve banks. Borrowers deposit funds into financial intermediaries, who then lend a portion to savers. Savers deposit funds into financial intermediaries, who then lend a portion to borrowers. The government deposits funds into financial intermediaries, who then lend a portion to regional banks.
Savers deposit funds into financial intermediaries, who then lend a portion to borrowers.
Which accurately describes disadvantages of a corporate business structure? (Select all that apply.) Setting up a corporation is complex and may require the advice of an attorney or accountant. A corporate business structure has a lot more regulations, or laws, compared to other structures. A corporate business structure does not allow owners to raise capital by selling shares of stock. Owners of a corporation have unlimited liability that includes their personal assets.
Setting up a corporation is complex and may require the advice of an attorney or accountant. A corporate business structure has a lot more regulations, or laws, compared to other structures.
Read the scenario. Jill is going to buy a car. She wants to get a vehicle with a good safety record and high mileage to the gallon. She compares cars by visiting the manufacturers' websites. Which is true regarding Jill's approach? She is likely to receive accurate information from the manufacturers because laws require them to provide it. She will not find the information she wants on the manufacturers' websites, so she will have to find other resources. She can get the cars' safety information online, but the mileage is available only at the dealer. She cannot trust the manufacturers' information because they have an incentive to be dishonest.
She is likely to receive accurate information from the manufacturers because laws require them to provide it.
Read the scenario. Joanne just changed jobs and has the option of receiving a paper check or using direct deposit. She has an account with a credit union 10 miles from her home and is a very busy person with little free time. Which is most appropriate for Joanne? She should have her pay direct deposited so that she does not have to drive to the credit union every week. She should drive to her credit union and deposit the check there using the automated teller machine. She should cash the check at the local check-cashing company near her house and pay the extra fee. She should stand in line at her local bank every week to cash her check in person.
She should have her pay direct deposited so that she does not have to drive to the credit union every week.
What are examples of federal mandatory spending? (Select all that apply.) education Social Security Medicare transportation
Social Security Medicare
Which government entities play a direct role in the US economy and compete with private businesses? (Select all that apply.) Tennessee Valley Authority (TVA) Federal Deposit Insurance Corporation (FDIC) United States Postal Service (USPS) Department of Homeland Security (DHS)
Tennessee Valley Authority (TVA) Federal Deposit Insurance Corporation (FDIC) PARTIAL CREDIT NEED TO CHOOSE 3
What is one benefit of term life insurance over whole life insurance? Term life policies make it easier to add beneficiaries than whole life policies. Term life coverage is usually better than whole life coverage. Term life payout always happens faster than whole life payout. Term life premiums are generally less expensive than whole life premiums.
Term life premiums are generally less expensive than whole life premiums.
What were results of the Savings and Loan Crisis? (Select all that apply.) The Federal Deposit Insurance Corporation (FDIC) replaced the Federal Savings and Loan Insurance Corporation (FSLIC). People moved their deposits from savings and loan institutions to banks. Many large commercial banks failed as they were absorbed by savings and loan institutions. The final cost to taxpayers who had to cover the deposit insurance was more than $100 billion.
The Federal Deposit Insurance Corporation (FDIC) replaced the Federal Savings and Loan Insurance Corporation (FSLIC). People moved their deposits from savings and loan institutions to banks. The final cost to taxpayers who had to cover the deposit insurance was more than $100 billion.
Which accurately describes how the Federal Reserve is funded? The Federal Reserve is funded by international banks, including World Bank. The Federal Reserve earns interest from its ownership of government securities. The Federal Reserve is funded by Congress and is part of the Department of Commerce. The Federal Reserve receives a portion of income tax revenues paid for by the people.
The Federal Reserve earns interest from its ownership of government securities.
Why is the Federal Reserve managed by federal government oversight? The Federal Reserve is responsible for printing and coining money. The Federal Reserve is responsible for collecting income taxes. The Federal Reserve is responsible for stabilizing prices. The Federal Reserve is responsible for paying off government debt.
The Federal Reserve is responsible for stabilizing prices.
What are the duties and responsibilities of the Federal Reserve? (Select all that apply.) The Federal Reserve establishes rules and regulations concerning insider trading. The Federal Reserve stabilizes and safeguards the nation's economy. The Federal Reserve implements American monetary policy. The Federal Reserve establishes and oversees America's tax code.
The Federal Reserve stabilizes and safeguards the nation's economy. The Federal Reserve implements American monetary policy.
How does Congress hold the Federal Reserve accountable? (Select all that apply.) The Federal Reserve's board of governors can be called to appear before a tribunal of the US Supreme Court. The president of the United States can veto policies concerning interest rates. The Government Accountability Office (GAO) can audit the Federal Reserve's activities. Appointees of the Federal Reserve can appear before congressional committees to provide testimony.
The Government Accountability Office (GAO) can audit the Federal Reserve's activities. Appointees of the Federal Reserve can appear before congressional committees to provide testimony.
Which accurately describes events of the Industrial Revolution and subsequent emergence of capitalism? The Industrial Revolution created economic opportunities for the middle class (bourgeoisie) and the desire for profits without government interference. The Industrial Revolution resulted in the reemergence of the Catholic Church oversight of European monarchs and capitalist opportunities. The Industrial Revolution led to the discovery of heliocentric theory, influencing the writing of the Magna Carta and the separation of church as state. The Industrial Revolution resulted in better working conditions for people in the lower class and in fewer labor unions in France, Britain, and Spain.
The Industrial Revolution created economic opportunities for the middle class (bourgeoisie) and the desire for profits without government interference.
Which correctly demonstrates the law of demand? The Pizza Place increases the cost of a slice of pizza from $2.00 to $2.50. The number of slices sold in one day drops from 250 to 175. The Pizza Place increases the cost of a slice of pizza from $2.00 to $2.50. The number of slices sold in one day stays the same. The Pizza Place decreases the cost of a slice of pizza from $2.50 to $2.00. The number of slices sold in one day drops from 300 to 275. The Pizza Place increases the cost of a slice of pizza from $1.50 to $2.25. The number of slices sold in one day increases from 150 to 175.
The Pizza Place increases the cost of a slice of pizza from $2.00 to $2.50. The number of slices sold in one day drops from 250 to 175.
Which is an example of absolute poverty? The Davis family lives in an apartment complex in a large US city. The apartment complex is safe, yet there is some gang activity on a nearby corner. Jill lives in an expensive urban city and has $10,000 in credit card debt. She cannot afford to pay off her debt for many years. The Smith family lives in an unsafe, decaying apartment with mold issues, and they oftentimes cannot afford food each day. Bill works part-time as a construction worker. He cannot afford a car but earns enough money to pay his bills.
The Smith family lives in an unsafe, decaying apartment with mold issues, and they oftentimes cannot afford food each day.
What is the purpose of a balanced budget amendment to the US constitution? The amendment would force Congress to cut entitlement spending until the federal debt is gone. The amendment would require the US government to spend no more than it collects in taxes and other revenues, excluding borrowing. The amendment would forbid Congress from increasing taxes until spending is cut to a reasonable rate. The amendment would give states the opportunity to cut spending in order to balance the federal budget.
The amendment would require the US government to spend no more than it collects in taxes and other revenues, excluding borrowing.
Why do business owners have to answer the three economic questions? The answers help determine whether a resource is scarce. The answers determine the best way to use their resources. The answers are required by federal law. The answers are something banks want when they review a business plan.
The answers determine the best way to use their resources.
Read the scenario. Marc just turned 16 and is looking to purchase a vehicle. The bank will grant him a loan under the condition that he opens a checking account and has the monthly payment debited directly from his account. Why would the bank grant Marc the loan under these specific conditions? The bank wants more of his money to make loans to other people. The bank hopes Marc will default and it can take possession of his car. The bank enjoys giving loans to young people at no charge. The bank is trying to lessen the possibility of default on the loan.
The bank is trying to lessen the possibility of default on the loan.
Read the sentence. After four days, a company has sold only one of a new item, of which they have thirty in stock. What are its options? (Select all that apply.) The company can keep the price as is and berate the consumer. The company can raise the price and only put two of the items out for display. The company can offer a discount coupon with another purchase. The company can lower the price and wait for sales to increase.
The company can offer a discount coupon with another purchase. The company can lower the price and wait for sales to increase.
Read the scenario. The federal government announced significant tax cuts, enabling people to keep a greater portion of their income. What will happen to the demand curve in this situation? The demand curve will shift up. The demand curve will shift down. The demand curve will shift left. The demand curve will shift right.
The demand curve will shift right.
Read the scenario. A United States company produces widgets in Brazil. Which is true about the calculation of widget production? The dollar value of the widgets would be included in a GDP calculation. The dollar value of the widgets would be included in both a GNP and a GDP calculation. The dollar value of the widgets would not be included in either a GNP or a GDP calculation. The dollar value of the widgets would be included in a GNP calculation.
The dollar value of the widgets would be included in a GNP calculation.
Which accurately describes how the federal budget is established? The executive branch prepares a budget and sends it to both houses of Congress which will pass budget resolutions. The Senate prepares a budget and sends it to the Department of the Treasury for the Secretary of the Treasury to sign. The Federal Reserve prepares a budget and sends it to both houses of Congress which will pass budget resolutions. The House of Representatives prepares a budget and sends it to the Senate for all 50 senators to sign.
The executive branch prepares a budget and sends it to both houses of Congress which will pass budget resolutions.
Read the scenario. For three years in a row, the federal government's expenditures exceeded its revenue. As a result, the federal debt grew by $4 billion, and the interest payment on the federal debt increased substantially. Which are true about the scenario? (Select all that apply.) The federal government's interest payments toward its deficit totaled $4 billion. The federal government's increase in debt led to an increase in interest payments. The federal government's deficit spending led to an increase in the federal debt. The federal government's yearly deficit spending totaled $4 billion.
The federal government's increase in debt led to an increase in interest payments. The federal government's deficit spending led to an increase in the federal debt.
What are examples of discretionary government spending? (Select all that apply.) The government allocates discretionary spending for space programs. The government allocates discretionary spending for veteran benefits. The government allocates discretionary spending for national defense. The government allocates discretionary spending for national parks.
The government allocates discretionary spending for space programs. The government allocates discretionary spending for national defense. The government allocates discretionary spending for national parks.
How can heavy federal debt lead to higher interest rates? The government increases taxes to cover the debt, which leads to a decrease in individual income. The government has to pay interest on the debt, which means it has less money to spend. The government spends more money by borrowing, which causes a rise in prices. The government causes increased borrowing competition, which leads banks to increase interest rates.
The government causes increased borrowing competition, which leads banks to increase interest rates.
Which could be part of a fiscal policy? The government increases taxes. The government increases the reserve requirement. The government deregulates businesses. The government chooses to raise interest rates.
The government increases taxes.
What are the primary opposing viewpoints concerning social welfare? (Select all that apply.) Social welfare should be generated from local councils elected by homeowners. Assistance should be provided through foreign aid. The government or society should provide social welfare. Individuals and private groups should assist those in need; there is no place for the government.
The government or society should provide social welfare. Individuals and private groups should assist those in need; there is no place for the government.
Which accurately describes a cause for inflation? The Federal Reserve raises interest rates and slows economic activity. The government places too much money into circulation. The Federal Reserve requires banks to keep more money on reserve. The government places too little money into circulation.
The government places too much money into circulation.
Which explains the US government's role in promoting competition? The government plays a role in promoting competition only at the local level. The government plays a role in promoting competition only at the state level. The government plays an active role in promoting competition at all levels. The government plays no role in promoting competition at any level.
The government plays an active role in promoting competition at all levels.
Read the scenario. All-Skies Airlines (ASA) has had several safety violations. What is the most likely government response to this situation? The government will require the airline to report these violations The government will offer tax breaks to people who travel. The government will raise taxes for ASA airlines. The government will open its own airline to compete.
The government will require the airline to report these violations
How do public disclosure laws benefit consumers? The laws require businesses to provide accurate details so that consumers can make informed decisions. The laws require businesses to reveal information that will allow other businesses to compete with them. The laws require businesses to offer information that allows consumers to get the best price. The laws require businesses to explain to consumers if they have been party to any lawsuits regarding their product.
The laws require businesses to provide accurate details so that consumers can make informed decisions.
How do unfunded mandates impact state spending? The mandates do not have an impact because states can choose not to implement them. The mandates force states to spend money in ways they did not anticipate. The mandates increase spending by providing grants of funds to states for programs. The mandates decrease spending by requiring states to balance their budgets.
The mandates force states to spend money in ways they did not anticipate.
When businesses across an industry increase the price of a good, which could be true regarding market equilibrium? The market has not reached equilibrium and a price adjustment will help prevent a shortage. There is a surplus of goods available, so a price adjustment will help the market reach equilibrium. There is a shortage of resources, so a price adjustment will help the businesses avoid equilibrium. The market will reach equilibrium once all of the businesses implement the price increase.
The market has not reached equilibrium and a price adjustment will help prevent a shortage.
Read the sentence. The cost of lumber has increased 145 percent since last quarter. What is the most likely outcome in the furniture market? The market will see cost-push inflation because the increased cost of inputs force prices higher. The market will see a rapid rise in inflation because inelastic products respond quickly to market forces. The market will see no inflation because there has not been a change in personal income. The market will see demand-pull inflation because consumers need more of the product.
The market will see cost-push inflation because the increased cost of inputs force prices higher.
How does the national debt impact private investors? (Select all that apply.) The national debt requires the government to print more currency, which reduces inflation and the purchasing power of private investors. The national debt causes deflation and decreases interest rates for private borrowers. The national debt causes a crowding-out effect and increases interest rates for private borrowers. The national debt requires the government to increase revenue streams and potentially increase taxes.
The national debt causes a crowding-out effect and increases interest rates for private borrowers. The national debt requires the government to increase revenue streams and potentially increase taxes.
Which accurately describes advantages of a sole proprietorship? The owner of a sole proprietorship has the freedom to make all business decisions. The owner of a sole proprietorship has limited liability as the business pays all expenses. The owner of a sole proprietorship is able to sell stock to raise capital. The owner of a sole proprietorship keeps the profits.
The owner of a sole proprietorship has the freedom to make all business decisions. The owner of a sole proprietorship is able to sell stock to raise capital. PARTIAL CREDIT
Which is an example of the law of supply? The price of a product decreases, resulting in a decrease supply. The price of a product increases, resulting in a shortage. The price of a product increases, resulting in a decrease in supply. The price of a product decreases, resulting in a surplus.
The price of a product decreases, resulting in a decrease supply.
How does a flat tax differ from a value-added tax (VAT)? The rate remains the same under a flat tax, whereas the rate changes under a VAT. People with higher incomes pay a lower rate under a flat tax, whereas they pay a higher rate under a VAT. The rate changes under a flat tax, whereas the rate remains the same under a VAT. People with higher incomes pay a higher rate under a flat tax, whereas they pay a lower rate under a VAT.
The rate remains the same under a flat tax, whereas the rate changes under a VAT.
How could adding more efficient technology to the production process change a supply curve? The technology could cause a shift to the right as production costs decrease. The technology could cause a shift to the left as production costs increase. The technology could cause a shift to the left as production costs decrease. The technology could cause a shift to the right as production costs increase.
The technology could cause a shift to the right as production costs decrease.
What does a decline in gross domestic product (GDP) communicate to economists? The total dollar value of all final goods and services within a 12-month period decreased. The prices of all final goods and services within a 12-month period decreased. The total dollar value of all intermediate goods and services within a 12-month period decreased. The rate of inflation of all intermediate goods and services within a 12-month period decreased.
The total dollar value of all final goods and services within a 12-month period decreased.
Which is the best way a consumer can measure inflation over time? There is a general decrease in prices on the majority of products and services that consumers use. There is a general decrease in prices on some of the products and services that consumers use. There is a general increase in prices on some of the products and services that consumers use. There is a general increase in prices on the majority of products and services that consumers use.
There is a general increase in prices on the majority of products and services that consumers use.
Which depict a negative externality? (Select all that apply.) There was an expansion of an airport, which decreased property values of nearby homes. There was an expansion of an airport, which caused greater levels of noise pollution. There was an expansion of an airport, which increased revenue for local restaurants. There was an expansion of an airport, which reduced unemployment in the surrounding area.
There was an expansion of an airport, which caused greater levels of noise pollution. There was an expansion of an airport, which decreased property values of nearby homes.
Why do suppliers offer more for sale when prices are high? They do not respond well to price signals and do not realize they should exit the market. They want to offer a product at a lower price and beat the competition. They actually offer more for sale when prices are low and demand is high. They are motivated by profit and see an opportunity to make money.
They are motivated by profit and see an opportunity to make money.
What is an advantage of credit unions? They are for-profit institutions, and their primary concern is profit. They are nonprofit institutions, and their primary concern is the member. They are nonprofit institutions, and their primary concern is investment. They are for-profit institutions, and their primary concern is mortgages.
They are nonprofit institutions, and their primary concern is the member.
How are payroll taxes used? They are used for entitlement programs like Social Security. They are used for federal education programs. They are used for worker safety programs like the Occupational Safety and Health Administration. They are used for energy and environmental programs.
They are used for entitlement programs like Social Security.
What roles do unions play in business today? (Select all that apply.) They fund research studies that investigate working conditions. They ensure fair wages and benefits for employees. They ensure safe working conditions for employees. They oversee the accounting practices of companies listed on NASDAQ.
They ensure fair wages and benefits for employees. They ensure safe working conditions for employees.
Why would wealthy nations have an interest in the development of poor nations? (Select all that apply.) They feel an ethical or moral obligation to do so. They want to improve tariff revenues with imports. It leads to migration between the countries. It opens up new markets for goods and services.
They feel an ethical or moral obligation to do so. It opens up new markets for goods and services.
What are steps that businesses typically take during a recession? (Select all that apply.) They lower prices. They increase production. They raise prices. They reduce production.
They lower prices. They reduce production.
How do improvements in technology impact economic growth in the long run? They make production more efficient, which leads to growth. They generate an increase in capital investment, which slows growth. They trigger an increase in hiring, which leads to growth. They cause a shift in resources during implementation, which slows growth.
They make production more efficient, which leads to growth.
What is the relationship between price and demand? They move in a downward direction. They move in opposite directions. They move in parallel directions. They move in an upward direction.
They move in opposite directions.
What is the relationship between price and supply in the law of supply? They both have regular annual cycles. They move in opposite directions. They move in the same direction. They both need government regulation.
They move in the same direction.
Read the scenario. Your town has four coffee shops spread out over two square miles. How do they stay competitive with each other? (Select all that apply.) They sell different items of lower quality. They sell the same product at a lower price. They sell different items to attract customers. They sell the same product at a higher price.
They sell the same product at a lower price. They sell different items to attract customers.
Read the scenario. A city decides that the main road through town is too busy at 5:00 p.m., when everyone leaves work. The city decides to put up a toll booth where people have to pay one dollar to use the road from 4:00 p.m. to 6:00 p.m. After six months, the city realizes that there has been no change in the number of people using the road. If the city's goal was to decrease the traffic on that road, what did they do wrong? They charged people to drive on a road that is public property and should not have a fee. They only had the toll in place for two hours so they did not have time to collect enough money. They sent the wrong signal to consumers by setting a price that was too low. They did not leave the toll booth in place long enough before they analyzed the results.
They sent the wrong signal to consumers by setting a price that was too low.
Why did workers join forces? They desired government intervention to prevent surplus exhaustion. They wanted to address their legal troubles on a publicly acknowledged platform. They sought to align their interests with those of the industrialists. They sought a more powerful voice and legal leverage when negotiating with companies.
They sought a more powerful voice and legal leverage when negotiating with companies.
What position did labor unions take on the free trade agreements passed in the 1990s? They were in favor of them because they believed new products would be offered. They were opposed to them because they wanted the tariff revenue. They were in favor of them because they believed US wages would rise. They were opposed to them because they feared the loss of US jobs.
They were opposed to them because they feared the loss of US jobs
If a product is inelastic, how will consumers likely respond to a price increase? They will find a substitute for the product and purchase that instead. They will stop purchasing the product and wait until the price comes back down. They will initially increase their purchasing and stock up on the product. They will continue to purchase the product and decrease other purchases if necessary.
They will continue to purchase the product and decrease other purchases if necessary.
How can infant industries be harmed by open free trade? They will have to use expensive raw materials from their own countries. They will not survive due to high production costs. They will face pressure to produce products quickly. They will not receive the revenue from tariffs.
They will not survive due to high production costs.
When adjustable mortgage rates began to increase, what was the result? (Select all that apply.) Thousands of homes were foreclosed on. Banks tightened credit restrictions again. More mortgages were approved for customers. Banks lowered mortgage rates to help people.
Thousands of homes were foreclosed on. Banks tightened credit restrictions again.
What were the results of the Smoot-Hawley Tariff passed by Congress in 1930? Free trade emerged between the United States and the European Union (EU), resulting in a boom of the US economy. Thousands of imported goods from China were no longer taxed, resulting in a flood of Chinese electronics to the United States. Thousands of imported goods were taxed, resulting in a trade freeze between the United States and several countries. Tariffs were eliminated between the United States and Mexico, resulting in numerous US businesses relocating to Mexico.
Thousands of imported goods were taxed, resulting in a trade freeze between the United States and several countries.
Which accurately describes the barter system during the colonial era of the United States before a national currency evolved? Tobacco and animal skins were common mediums of exchange. Coffee and cocoa beans were common mediums of exchange. Squash and chili peppers were common mediums of exchange. Silk and tea were common mediums of exchange.
Tobacco and animal skins were common mediums of exchange.
What has happened when demand-pull causes inflation? Businesses made up for lost revenue by increasing prices. Incomes did not keep pace with the cost of goods. There was not enough money to buy up the supply. Too much money chased too few goods.
Too much money chased too few goods.
What is the difference between marginal product and total product? Total product is defined as the total output of a firm, whereas marginal product is defined as the change in output when a firm introduces one more unit of input. Total product is defined as the change in output when a firm introduces one more unit of input, whereas marginal product is defined as the total output of a firm. Total product is defined as the firm's net revenue, whereas marginal product is the total gross profit of a firm before taxes are withheld. Total product is defined as the total gross profit of a firm before taxes are withheld, whereas marginal product is the firm's net revenue.
Total product is defined as the total output of a firm, whereas marginal product is defined as the change in output when a firm introduces one more unit of input.
How does total revenue differ from marginal revenue? Marginal revenue is a measure of all the money a business makes, whereas total revenue measures the money from one additional unit. Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money left after expenses have been paid. Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money from one additional unit. Marginal revenue is a measure of all the money a business makes, whereas total revenue measures the money left after expenses have been paid.
Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money from one additional unit.
Which of Rostow's Five Stages of Economic Growth involves agricultural production and hunting and gathering? Takeoff Traditional society Preconditions for takeoff Drive to maturity
Traditional society
What are the three largest credit reporting agencies? TransUnion, Equifax, and Experian Federal Reserve, Fort Knox, and Wall Street Internal Revenue Service, Department of Commerce, and Department of Treasury JP Morgan Chase, Bank of America, and Wells Fargo
TransUnion, Equifax, and Experian
Which accurately describes aspects of a partnership business structure? (Select all that apply.) The business is a legal entity that spares partners from personal liability. The business pays taxes rather than the business partners paying them. Two or more individuals share the losses incurred by a business. Two or more individuals share the profits generated by a business.
Two or more individuals share the losses incurred by a business. Two or more individuals share the profits generated by a business.
Read the scenario. Bill recently moved into a new apartment. He wants to purchase a new television. Bill needs to decide between paying cash for a traditional model television or using credit for a newer HD version. Which are disadvantages of using credit? (Select all that apply.) Bill will have to make his purchase online rather than going to a store. Bill will have to wait until he pays for his purchase in full before he actually gets it. Using credit may tempt Bill to buy more than he can afford. Using credit will cost Bill more money over time.
Using credit may tempt Bill to buy more than he can afford. Using credit will cost Bill more money over time.
Which form is used by employers to withhold the proper amount of income tax from employees' paychecks? 1099 W-2 W-4 1040
W-4
How is health insurance different from auto insurance? While both types of insurance are required, if you do not have health insurance, you will be required to pay a fee on your taxes. Health insurance is required by the federal government; auto insurance is required by both the state and federal governments. People are required to have a minimum amount of auto insurance, which includes a deductible; people are required to have health insurance, but it does not include a deductible. While several companies sell both types of insurance, businesses only have to provide their employees with auto insurance.
While both types of insurance are required, if you do not have health insurance, you will be required to pay a fee on your taxes.
How is whole life insurance different from term life insurance? Whole life insurance is expensive, whereas term life insurance is not. Whole life insurance does not expire, whereas term life insurance does. Whole life insurance covers accidents, whereas term life insurance does not. Whole life insurance is not an investment, whereas term life insurance is.
Whole life insurance does not expire, whereas term life insurance does.
Which international agency would most likely be involved in funding the construction of a water pipeline in a developing country? OPEC International Monetary Fund ASEAN World Bank Group
World Bank Group
If you find an error on your credit report, what is your best option? You should contact all three agencies with proof of the error so that they can fix it. You should contact one agency to fix the error and let that agency deal with the other two agencies. You should let the agencies fix the error when the business eventually reports it to them. You should use each agency's website to complain about the error, then let it go.
You should contact all three agencies with proof of the error so that they can fix it.
What will happen if you avoid a review of your monthly budget? You will have no record to keep track of where your money is going. You will have additional bills arrive that you were not expecting. You will have more money coming in than you have going out. You will never know if you have checks in circulation that have not been cashed.
You will have no record to keep track of where your money is going.
What are possible consequences for not monitoring your budget? (Select all that apply.) You will be able to pay for any unexpected expenses that arise. Your 401(k) account will have plenty of money for retirement. Your ability to save and invest for the future may be negatively affected. You may run low on available money to spend.
Your ability to save and invest for the future may be negatively affected. You may run low on available money to spend.
What are bank reserves? stocks and bonds owned by a bank and held as collateral a bank's ownership of physical property such as real estate government securities owned by the Federal Reserve Bank a bank's holding of deposits and physical cash in the bank's vault
a bank's holding of deposits and physical cash in the bank's vault
What do traditional and command economies have in common? a focus on innovation rather than stagnation a focus on the community rather than the individual a focus on agriculture rather than technology a focus on self-interest rather than the community
a focus on the community rather than the individual
Read the scenario. Allen lives in the mountains in the northern part of his state. He has only one option for phone and Internet service. With what type of monopoly does Allen do business? a utility monopoly a technical monopoly a geographic monopoly a natural monopoly
a geographic monopoly
What is demand elasticity? a measure of the shift in the demand curve after a price change a measure of the impact a price change has on demand a measure of the usefulness of a product for consumers a measure of the value of a product in the marketplace
a measure of the impact a price change has on demand
Which accurately describe features on a credit report? (Select all that apply.) a person's federal and state tax returns and felony criminal records a person's credit account information, such as lines of credit from credit cards a person's personal information, such as date of birth and Social Security number a history of delinquent payments
a person's credit account information, such as lines of credit from credit cards a person's personal information, such as date of birth and Social Security number a history of delinquent payments
What is the definition of a stock? a contract in which an investor loans money to a corporation and earns interest on a fixed schedule a part of a company's profits that are shared with its employees through bonuses a security sold by a corporation in exchange for shares of ownership in the company a pooling of investors and their funds to purchase a range of financial assets
a security sold by a corporation in exchange for shares of ownership in the company
What would happen if the price of a product remained low even though demand for the product was very high? market equilibrium increased production a shortage a surplus
a shortage
Which could cause rapid inflation? a rise in stock prices an increase in supply a significant wage increase a decrease in the cost of natural resources
a significant wage increase
What is a proportional tax? a tax in which the percentage a person pays in taxes stays the same regardless of income a tax in which the percentage a person pays in taxes decreases as income decreases a tax in which the percentage a person pays in taxes increases along with income a tax in which the percentage a person pays in taxes decreases, but the total dollars increase as income increases
a tax in which the percentage a person pays in taxes stays the same regardless of income
What is a progressive income tax? a tax in which the rate does not change, regardless of a person's income a tax in which the tax rate increases as a person's income increases a tax in which the rate remains flat, regardless of a person's income a tax in which the rate decreases as a person's income increases
a tax in which the tax rate increases as a person's income increases
Read the sentence. A person visits the grocery store to buy the materials to make and sell fudge door-to-door. What factors of production are being used? all of the factors: land, labor, and capital only land and capital only labor and capital only land and labor
all of the factors: land, labor, and capital
What is the Government Accountability Office (GAO)? a private agency that advises the dent about fiscal policy an internal review agency of the Federal Reserve used to promote its mission an independent agency that answers to Congress and audits the Federal Reserve a government agency that answers to Congress and audits the United States Mint
an independent agency that answers to Congress and audits the Federal Reserve
When actively applying for a loan, what should you avoid doing with your credit? applying for new types of credit, such as credit cards or store cards paying as much as you can afford to pay down credit cards and paying on time using your credit cards to complete a shopping spree at the local mall calling your credit card company and asking for a lower interest rate
applying for new types of credit, such as credit cards or store cards
Which are considered white-collar occupations? (Select all that apply.) architect plumber electrician teacher
architect teacher
Read the sentence. Julian has an ATM card with his local bank and travels out of state. What features can he use out of state? (Select all that apply.) withdraw some cash apply for a loan check his balance make purchases
check his balance make purchases withdraw some cash
Which section on your credit report could cause the most damage to your credit score? inquiries on accounts collection items identifying information types of accounts
collection items
Read the passage. This is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy. It provides information about price changes in the nation's economy to government, business, labor, and private citizens, and it is used by them to help guide economic decisions. What is being described? import price index export price index consumer price index producer price index
consumer price index
Which form of currency was authorized by the Continental Congress and eventually became worthless due to inflation? English pounds greenbacks Spanish dollars continentals
continentals
Which is the term for borrowing money to make purchases right away and then paying the money back later? savings credit capital debit
credit
Which is the largest item in discretionary spending? transportation defense Medicare Social Security
defense
What is a measure that demonstrates how consumers respond to changes in the price of goods and services? law of diminishing returns unit elasticity law of demand demand elasticity
demand elasticity
What does gross domestic product (GDP) measure? consumer prices economic growth demand inflation
economic growth
What is a significant expense for states but not for the federal government? military veteran benefits education social security
education
What is defined as a common indicator of an economy's health based on the total value of goods and services produced during a fiscal year? consumer price index gross domestic product unemployment rate debt to equity ratio
gross domestic product
What were the functions of the Tennessee Valley Authority Act? (Select all that apply.) spend tax dollars for minimal gains allow for small planes to land in the valley improve navigation along the Tennessee River develop agriculture and forest land in the valley
improve navigation along the Tennessee River develop agriculture and forest land in the valley
What are ways a company can increase its market share? (Select all that apply.) decrease products fire employees improve products lower prices
improve products lower prices
Which items are typically included in a monthly budget? income, savings, and donations to charity income, income taxes, and savings income, all expenses, and income taxes income, fixed expenses, and variable expenses
income, fixed expenses, and variable expenses
Which action by the government would promote competition among firms? enacting government policies described by Friedrich Engels repealing antitrust laws enacted by the Senate increasing oversight and ownership of public utilities passing legislation that prevents price-fixing
increasing oversight and ownership of public utilities INCORRECT
Read the statement. If the price of a product becomes too expensive, then the demand for it decreases. Which economics concept is this? law of supply law of income law of production law of demand
law of demand
Which factors impact returns on investments? (Select all that apply.) level of risk involved with the investment level of diversification of a financial portfolio length of time the broker has been licensed length of time of the investment
level of risk involved with the investment length of time of the investment
A business situation in which a specific market segment is controlled by a group—typically two to ten businesses--is known as what? oligopoly monarchy monopoly oligarchy
oligopoly
Read the sentence. You own a greeting card startup business with a limited advertising budget. Which form of advertising offers the greatest benefit at the lowest cost? newspaper, because it reaches a small but educated subscriber base in most markets radio, because it has a focused consumer base and is cost-effective television, because it reaches the widest consumer base once production costs are met online, because it reaches the widest consumer base and is cost-effective
online, because it reaches the widest consumer base and is cost-effective
Which is an example of a federal government transfer payment? payment to federal court justices payment to automobile union members payment to individuals with disabilities payment to CIA and FBI operatives
payment to individuals with disabilities
Read the sentence. The _[blank]_ nominates chairmen and vice chairmen to the Federal Reserve. Which correctly completes the sentence? majority leader of the senate president secretary of state chief justice of the supreme court
president
Barring prices from exceeding a certain maximum is an example of which economics concept? inflation deflation price floor price ceiling
price ceiling
Read the sentence. Raul has paid the same amount for his apartment for twenty years. This is an example of which economics concept? price ceiling price discount price fixing price floor
price ceiling
Guaranteeing profit for the retailer is an example of which economics concept? price floor price ceiling inflation deflation
price floor
Which are examples of free enterprise? government regulation, profit sharing, competition private property, profit motive, competition no government interference, profit motive, economic freedom limited government, community property, economic freedom
private property, profit motive, competition
Read the statement. Monopolistic competition is separated from pure competition by _[blank]_. Which best completes the sentence? product differentiation collusion imperfect competition profit maximization
product differentiation
Read the sentence. The _[blank]_ approach adds up the value at each stage of production, where the value added is the total sales minus the value of intermediate inputs. Which accurately completes the sentence? spending advertising income production
production
Which characteristics of capitalism provide an opportunity for entrepreneurship and allow both buyers and sellers to feel they made a return on an investment? (Select all that apply.) freedom voluntary exchange and trade competition profit motivation innovation
profit motivation innovation
What are the functions of a finance company? (Select all that apply.) provide loans directly to consumers provide certificates of deposit to merchants purchase installment contracts from merchants purchase mutual funds from a collection of investors
provide loans directly to consumers purchase installment contracts from merchants
What is an economic indicator that calculates the total value of goods and services produced during a fiscal year that also factors in inflation? producer price index real gross domestic product gross domestic product consumer price index
real gross domestic product
Read the scenario. Joanne, a former account manager at a large corporation, recently lost her job. Although her family can still pay its bills and afford groceries, the family no longer has discretionary income for leisure activities, such as going to restaurants or movie theaters. They have much less money compared to their friends and neighbors. This is an example of _[blank]_. Which most accurately completes the sentence? relative poverty a population at risk absolute poverty the poverty threshold
relative poverty
Which criteria for effective taxes is violated by confusing instructions? usefulness efficiency equity simplicity
simplicity
In economics, what is the definition of margins? the edge of an economics textbook that you are using the border around a country on a map or globe the ability to buy stock cheaply and pay for the rest later the ability to identify and observe certain limits
the ability to identify and observe certain limits
What is marginal cost? the cost when taxes are taken into account the cost to produce one additional unit the costs that do not change regardless of the number of units produced the costs that change based on the number of units produced
the cost to produce one additional unit
What is fiscal policy? politicians providing tax breaks for large corporations in exchange for campaign contributions the House of Representatives passing new tax laws without consent from the Senate the government affecting the economy through tax policies and federal spending the Supreme Court ruling on tax policies passed by Congress but vetoed by the president
the government affecting the economy through tax policies and federal spending
What does the minimum price of an item reflect? the lowest price the consumer will pay the highest price a company can charge the highest price the consumer will pay the lowest price that will cover the costs of production
the lowest price that will cover the costs of production
Read the statement. A monopoly's prices are determined by _[blank]_. Which most accurately completes the sentence? market equilibrium the monopoly perfect competition competing firms
the monopoly
Read the scenario. Sally wants a new exercise machine but does not want to pay for it right away. She has a private label card with a sporting goods store offering zero percent interest for six months and then 29 percent interest. She also has a general-purpose card offering 16 percent interest after 30 days. She will receive a bonus from work in three months that will cover the cost of the machine she wants. Which is her best choice to pay the least amount of interest? a payday loan the private label card a cash advance the general-purpose card
the private label card
What is the definition of return? the percentage of loss from a short-term investment the profit or loss accumulated from an investment the liquidity, or lack of liquidity, for an investment the net profit of an investment when adjusted for inflation
the profit or loss accumulated from an investment
Where are the Federal Reserve branches located? only in Washington, DC throughout the United States along the Atlantic coast along the Pacific coast
throughout the United States
What is a goal of the North American Free Trade Agreement? to reduce legislative oversight and improve production to decrease trade barriers and tariffs to protect the jobs of workers and increase wages to increase tariffs and raise revenues
to decrease trade barriers and tariffs
Why does the consumer price index (CPI) measure inflation? to help the consumer set up a savings account to determine change in prices over time to help stimulate job growth in the United States to review the past and make the same choices
to determine change in prices over time
When might a country produce a product even though it cannot do so efficiently? (Select all that apply.) to ensure national security to increase the balance of trade to ensure a trade deficit to minimize the sale of exports
to ensure national security to increase the balance of trade
Why must you make adjustments to your budget if your income changes? (Select all that apply.) to ensure that your expenses and income remain balanced to notify your bank and other creditors of your change in income to change your variable expenses to fixed expenses to address the change in income to maintain an understanding of the amount of money you have available
to ensure that your expenses and income remain balanced to maintain an understanding of the amount of money you have available
Why do the credit reporting agencies track data on consumers? to help companies determine when to give cash back rewards to their best customers to prevent the consumer from receiving annual credit reports to provide companies with only derogatory data so that they decline your business to help a lender decide whether a person is a good credit risk
to help a lender decide whether a person is a good credit risk
What is the purpose of an expansionary fiscal policy? to decrease the level of aggregate demand to slow rising inflation to increase the level of federal spending to increase the nation's credit score to decrease the level of federal spending to lower the nation's gross domestic product to increase the level of aggregate demand to grow the economy
to increase the level of aggregate demand to grow the economy
What is the purpose of the North American Free Trade Agreement? to increase skilled labor forces in Mexico, Cuba and the United States to impose tariffs between Mexico, the United States and Canada to improve work visa programs between Mexico, Cuba and the United States to increase trade between Mexico, the United States, and Canada
to increase trade between Mexico, the United States, and Canada
Why would the government set a price floor for wages? to protect small businesses to stimulate the economy to promote a livable working wage to avoid high unemployment
to promote a livable working wage
Read the scenario. The United States engages in free trade with Holland. Last year, the United States decided to put a 75 percent tariff on imported tulips. Why would the United States impose that tariff? to ensure that the two countries have a steady supply of tulips to guarantee low prices for US consumers to protect US tulip growers from competition to promote other types of trade between the two countries
to protect US tulip growers from competition
What reasons do protectionists cite most for restricting trade? (Select all that apply.) to protect national security and prohibit US reliance on other countries to protect US jobs due to cheap labor in other countries to protect US taxpayers from increased income and corporate tax rates to protect US infant industries that tend to have high production costs
to protect national security and prohibit US reliance on other countries to protect US infant industries that tend to have high production costs needs a third one
When a business wants to calculate all of the money it collects, what is it concerned with? marginal revenue variable revenue total revenue fixed revenue
total revenue
What types of banking transactions can be performed through a mobile app? (Select all that apply.) transfer money between savings and checking accounts set up automatic bill pay transfer funds from a 401(k) to a credit card receive automatic payments from an employer
transfer money between savings and checking accounts set up automatic bill pay receive automatic payments from an employer
What is specialization? when an individual becomes an expert in a particular area when a business provides services that help communities when the government offers military protection when the market offers higher wages for more important jobs
when an individual becomes an expert in a particular area
In what year did Ken withdraw about $1,000 from his bank account? year 7.5 year 3.5 year 10 year 6
year 10
Read the statement. The exchange rate for converting US dollars to the British pound is .767. How much is $200 US worth in Great Britain? £153 £276 £352 £263
£153
Which are part of the marketing mix? (Select all that apply.) A) have the proper packaging B) sell out in the first week C) have multiple locations D) know what people will pay
A) have the proper packaging C) have multiple locations D) know what people will pay
Comparative advertising includes which of the following criteria? (Select all that apply.) A) increased quantity B) better price C) cheaper quality D) additional features
A) increased quantity B) better price D) additional features
Which noteworthy legislation limited how much banks could earn from investments, such as the selling of securities, and also established the Federal Deposit Insurance Corporation (FDIC)? Federal Reserve Act of 1913 Competitive Equality Banking Act of 1987 Banking Act of 1933 International Banking Act of 1978
Banking Act of 1933
What is a major difference between banks and credit unions? Banks are regulated by the Federal Deposit Insurance Corporation; there is no government oversight of credit unions. Banks tend to allow only certain people as members; anyone can open an account at a credit union. Banks charge fees for all of their services; credit unions do not charge fees. Banks seek to make a profit for shareholders; credit unions are nonprofit.
Banks seek to make a profit for shareholders; credit unions are nonprofit.
Read the sentence. When setting financial goals, it is important to set SMART goals. What does the acronym SMART stand for? A) Superior, Magnificent, Awesome, Rewarding, Terrific B) Significant, Modern, Analysis, Rational, Tolerable C) Specific, Measurable, Attainable, Relevant, Timely D) Simple, Manageable, Accurate, Reasonable, Telling
C) Specific, Measurable, Attainable, Relevant, Timely
Which is the best example of direct vendor advertising? A) television or radio ads from the local car dealer B) social media ads highlighting sales at a grocery store C) a commercial during the Super Bowl for Starbucks coffee D) print ads and coupons in the Sunday newspaper
C) a commercial during the Super Bowl for Starbucks coffee
Which is an example of a SMART financial goal? A) I want to save enough money to go to Europe next summer and visit Spain, Greece, and England. B) I want to purchase a new 60" television by working more hours at my job for the next two weeks. C) I want to buy a new car sports car before August 30 using money I've saved from mowing lawns. D) I want to save $25 dollars per week by packing my own lunch in order to pay off $100 in credit card debt in the next 30 days.
D) I want to save $25 dollars per week by packing my own lunch in order to pay off $100 in credit card debt in the next 30 days.
Which accurately describe differences between debit and credit cards? (Select all that apply.) Debit cards deduct funds from a person's banking account, whereas credit cards pull money from a predetermined line of credit. Debit cards charge interest after a 30-day grace period, whereas credit cards do not charge interest. Credit cards deduct funds from a person's banking account, whereas debit cards pull money from a predetermined line of credit. Credit cards charge interest, whereas debit cards do not charge interest.
Debit cards deduct funds from a person's banking account, whereas credit cards pull money from a predetermined line of credit. Credit cards charge interest, whereas debit cards do not charge interest.
What is true regarding economic growth? (Select all that apply.) Economic growth reduces the consumer price index (CPI). Economic growth decreases the tax base. Economic growth creates jobs and in turn provides income. Economic growth raises per capita gross domestic product (GDP).
Economic growth creates jobs and in turn provides income. Economic growth raises per capita gross domestic product (GDP).
What is an argument against the benefit taxation principle? Corporations would hire fewer workers because of the heavy burden. It unfairly taxes people who do not take advantage of a benefit. People who earn less money simply cannot afford to pay for some benefits. The regressive structure places a heavier burden on the wealthy.
People who earn less money simply cannot afford to pay for some benefits.
How does the Federal Reserve Bank fit into the balance of power among the three branches of the federal government established by the Constitution? The Chair of the Federal Reserve is appointed by the president and approved by the Senate. The Chair of the Federal Reserve is elected by popular vote. The Chair of the Federal Reserve is appointed in a secret meeting. The Chair of the Federal Reserve is appointed by Congress and approved by the Supreme Court.
The Chair of the Federal Reserve is appointed by the president and approved by the Senate.
Which accurately describes why the FDIC was created? The FDIC was created in 2008 after many bank failures caused the Great Recession. The FDIC was created in 1933 after many bank failures caused the Great Depression. The FDIC was created in 1918 after World War I caused national banks to fail. The FDIC was created in 1797 after the Revolutionary War caused local banks to fail.
The FDIC was created in 1933 after many bank failures caused the Great Depression.
Why were businesses opposed to labor unions during the late 1800s and early 1900s? Unions demanded the federal government adopt a command economic system in which it owned all manufacturing. Unions demanded higher pay and safer working conditions for workers, which cut into a company's profits. Unions demanded that businesses adopt laissez-faire practices and forbid government interference in private business. Unions demanded lower income tax rates for workers and higher corporate tax rates for businesses.
Unions demanded higher pay and safer working conditions for workers, which cut into a company's profits.
Which supports the idea that unions are essential in a free market? Unions help ensure that workers have jobs even when the economy is entering a recession. Unions provide campaign contributions to politicians, who can pass laws to help workers. Unions can provide better service to workers because they understand industry better than the government. Unions provide a way to support workers' rights, fair wages and workplace safety.
Unions provide a way to support workers' rights, fair wages and workplace safety.
Read the scenario. Anna says the tax system needs to be simplified. She says it takes the average US taxpayer approximately 14 hours to complete and file federal taxes. If Anna is correct, which tax would simplify the tax system and maintain equity and efficiency? a value-added tax that permits itemized deductions a progressive tax that permits itemized deductions a flat tax that does not include deductions a regressive tax that includes a standard deduction
a flat tax that does not include deductions
Read the scenario. The local electronics store advertises a television at a discount price to draw in customers. When they ask for the product, it is unavailable, but a higher priced item is offered. What is being described? price discrimination price-fixing advertised price bait and switch
bait and switch
Read the scenario. Rachelle is saving for college and does not want any student loans. She already has $22,000 but needs to get to $23,000. She has the choice of a bank savings account with 1.5 percent interest for 3 years, a certificate of deposit at 3.5 percent interest for 18 months, a credit union savings account at 2 percent for 2 years, or a savings bond at 1 percent for 5 years. Rachelle is beginning her sophomore year and is on track to start college in 3 years. Which is her best choice? credit union savings account bank savings account bank certificate of deposit savings bond
bank certificate of deposit
How does an individual become a governor of a Federal Reserve branch? by popular vote by presidential appointment by congressional appointment by Senate majority vote
by presidential appointment
Under which system do the forces of supply and demand establish the value of a country's currency as compared to another country's currency? flexible exchange rate trade surplus trade deficit fixed exchange rate
flexible exchange rate
Which items are primary areas of assistance for social welfare? auto insurance, homeowner's insurance, and life insurance water, gas, and electrical utilities urban safety, transportation, and tuition assistance food, housing, and medical care
food, housing, and medical care
Which economic system is based on private ownership of goods and private decisions to invest in trade or business industries, with the intent of making a profit? closed economy free enterprise economy communist economy command economy
free enterprise economy
What type of government expenditure is defense spending? per capita goods and services income transfer payment
goods and services
Read the scenario. A big-box store purchases 90 saws and charges $50 each. After one week, they have not sold any saws. What could the store do? keep the price the same and wait it out raise the price to see if consumers will buy any give the unsold items to their competitor lower the price to see if consumers will buy any
lower the price to see if consumers will buy any
Read the sentence. A high-priced product has not sold after an extensive ad campaign. What is the most effective solution to encourage sales? lower the price until the consumer creates a surplus of product stay the course until the consumer eventually breaks down and buys lower the price until an equilibrium price has been established ship the product back to the manufacturer and ask for a better product
lower the price until an equilibrium price has been established
Which type of loan is also known as a cash advance loan or a deferred deposit loan? payday loan boat loan mortgage loan personal loan
payday loan
Which type of loan requires the borrower to write a postdated check for the amount he or she wishes to borrow, in addition to a fee, in exchange for cash? car loan student loan payday loan home equity loan
payday loan
Read the scenario. All of the dry cleaners within 50 miles charge the same price for services. They meet each week to ensure every store is following along with the collusion. What is being described? unit pricing price-fixing taxation bait and switch
price-fixing
Read the scenario. George is saving for a mortgage on a $125,000 house. He needs 20 percent for a down payment. He currently has $22,000. How long will it take George to save the rest of the money when he earns 5 percent interest per year? two years five years three years one year
three years
Once the federal budget is set, how is money allocated? through the executive branch through mandatory spending through the appropriations committees through discretionary spending
through the appropriations committees
Read the sentence. Taxes are mandatory financial contributions to the government. What purpose do taxes serve in the United States? to provide savings for future government use to redistribute wealth to pay for government expenses to decrease undesirable behavior
to redistribute wealth to pay for government expenses to provide savings for future government use
Read the sentence. The three basic economic questions everyone must answer are _[blank]_. Which most accurately completes the sentence? how much money to make, how to produce, and where to sell what to produce, how to produce, and for whom to produce when to produce, what to produce, and where to produce how to produce, how much to produce, and where to sell
what to produce, how to produce, and for whom to produce
When is a product likely to have elastic supply? when production of a product is the result of a monopoly when production of a product is difficult to replicate when production of a product is easy to replicate when the production of a product is dangerous
when production of a product is easy to replicate
Which questions are asked on the W-4 form? (Select all that apply.) whether you are single or married whether you have ever failed to pay your taxes whether you are a head of household whether you are a dependent or independent
whether you are single or married whether you are a head of household whether you are a dependent or independent
In what key area does the benefit principle of taxation and the ability-to-pay principle of taxation differ? which types of items should be taxed how taxes should be collected what percentage of income should be taxed who should pay the taxes
who should pay the taxes
Read the sentence. The housing bubble expanded in 2003 when _[blank]_ were at a 50-year low. Which best completes the sentence? A) savings interest rates B) personal loan interest rates C) mortgage interest rates D) student loan interest rates
C) mortgage interest rates
What are typical fees associated with checking accounts from banks without any branches? (Select all that apply.) ATM fees day-trading fees account minimum fees overdraft fees
account minimum fees overdraft fees ATM fees
What is creditworthiness? the amount a customer will be charged in fees each month without having direct deposit an appraisal made by a lender as to how likely a customer is to repay a loan as agreed an appraisal made on a house so that the owners understand the value if they wish to sell it the ability to open a checking account from a bank and deposit money from a job
an appraisal made by a lender as to how likely a customer is to repay a loan as agreed
What are the most common fixed expenses for the majority of people? (Select all that apply.) automobile loans house payments travel costs entertainment costs
automobile loans house payments
Read the scenario. Paul is 16 years old and has a job at the local grocery store. He has a savings account and a driver's license. Why is he not eligible for a payday loan? He must be at least 18 years old and have a checking account. He must have signed paperwork from his bank giving permission. He must show two years of employment pay stubs and taxes. He must have a parent cosign the loan because he is under 18.
He must be at least 18 years old and have a checking account.
How do individuals benefit from creating a budget? (Select all that apply.) It helps them monitor daily stock performance. It helps them identify their expenses. It helps them devise a plan to save money. It helps them identify their income.
It helps them identify their expenses. It helps them devise a plan to save money. It helps them identify their income.
Read the scenario. Maxine needs to balance her checkbook. She has a starting balance of $1,237 in her checking account. She received a $25 check for her birthday. She used her debit card to pay $115 for a haircut and manicure. She then purchased books for her classes for a total of $397. She wrote a check for $350 to pay her car loan as well as a check for $80 to pay her cell phone bill. She withdrew $50 from an ATM machine and paid a fee of $2. Maxine then put half of the remaining money in her checking account into her savings account. How much money did Maxine put into her savings account? $320 $134 $186 $268
$134
Read the scenario. Elizabeth has a checking account at a local bank. The bank charges account holders $5 at the end of the month if their account falls below $1,000. The bank also charges $35 at the time of an overdraft and $2 for every ATM use. Elizabeth has $43 in her checking account when she begins balancing her checkbook. She received a paycheck for $216 and a check from her parents for $50. She wrote a $45 check to pay her cell phone bill and a check for $117 to pay her electric bill. She also wrote another check for $110. She used an ATM twice, withdrawing $20 each time. Two weeks later, Elizabeth received her next paycheck for $197 and another check from her parents for $50. What is the current balance in Elizabeth's checking account? $205 $200 $204 $240
$200
Read the scenario. Allen is balancing his checkbook. He starts his ledger with $98. He deposited a paycheck of $453 from his first job and a paycheck of $127 from his second job. He spent $114 at the grocery store and bought $20 of gas. He then paid the minimum due on his credit card, which was $40. He also paid his electric bill for the month, which was $120, and his water bill, which was $68. Finally, Allen transferred $75 from his checking account to his savings account. How much money does Allen have remaining in his checking account? $414 $241 $316 $339
$241
Read the scenario. Miguel opened his first checking and savings accounts. Since Miguel now has checking and savings accounts, he will not have any fees. If he uses a STAR-ATM, he will not be charged a fee. However, if he uses a regular ATM, there will be a $2 fee for each use. Miguel starts with a balance of $65. He wrote a check to his cell phone company for $45. For his birthday, Miguel's family members sent him three checks for $20, $50, and $20. He then received a paycheck for $1,050 through direct deposit. He wrote a check for $305 for his car payment and a check for $95 for his car insurance payment. Miguel then used his debit card to pay his $116 electric bill. Finally, Miguel wanted to go to dinner and the movies with friends, so he withdrew $80 from a STAR-ATM. What is Miguel's balance? $544 $562 $542 $564
$564
Read the scenario. Heathcliff is balancing his checkbook. He starts his ledger with the $145 he has in his account. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. Then, he receives $540 from work. He then spends $54 at a restaurant and $38 at the movies. He deposits a check from his parents for his birthday worth $180. Then, his landlord cashes his check for rent for $600. How much did Heathcliff earn from work and for his birthday? $270 $720 $540 $360
$720
Read the scenario. Heathcliff is balancing his checkbook. He starts his ledger with the $145 he has in his account. He records $27 spent at the grocery store followed by $58 spent on his cellphone bill. Then, he receives $540 from work. He then spends $54 at a restaurant and $38 at the movies. He deposits a check from his parents for his birthday worth $180. Then, his landlord cashes his check for rent for $600. How much did Heathcliff spend at the grocery store and for his cell phone? $85 $58 $145 $180
$85
What is a benefit of creating a budget? A budget helps you decide where to invest your money. A budget helps you decide which bills to pay now and which to put aside until later. A budget enables you to learn how to live within your means. A budget enables you to complete your tax forms each year.
A budget enables you to learn how to live within your means.
What is the process for qualifying for a payday loan? A person must show proof of employment and his or her tax returns for the previous year. A person must possess an active checking account, valid identification, and be at least 18 years old. A person must possess a credit card with a $500 limit or greater and be at least 21 years old. A person must have an annual income of at least $25,000 per year and have a current paycheck stub as proof of that income.
A person must possess an active checking account, valid identification, and be at least 18 years old.
Which accurately describes a push marketing tactic to help manufacturers sell more products? A) A manufacturer offers department stores incentives for selling its product. B) A manufacturer launches a new print advertising campaign in several magazines. C) A manufacturer incorporates social media to increase brand awareness. D) A manufacturer creates a new television advertising campaign.
A) A manufacturer offers department stores incentives for selling its product.
Which best explains product advertising features? A) advertising that focuses exclusively on the benefits of the product B) advertising that focuses on getting consumers to exclusively buy a specific product C) advertising that focuses on creating appealing images of the product D) advertising that focuses on price information, and any applicable discounts, of a product
A) advertising that focuses exclusively on the benefits of the product
Which characteristics of capitalism drive retail companies to produce better goods and services by the best workers? (Select all that apply.) A) competition B) profit motivation C) innovation D) freedom E) voluntary exchange and trade
A) competition D) freedom
How do you benefit from understanding personal finance? (Select all that apply. A) making quality choices about money by creating and managing a budget B) comprehending the difference between debit and credit cards C) being able to complete personal taxes every year without paid assistance D) becoming qualified to work for the government in the field of economics
A) making quality choices about money by creating and managing a budget B) comprehending the difference between debit and credit cards
Read the sentence. The housing bubble was caused in part by people buying homes to fix and sell for a higher price. What is this known as? A) speculating B) foreclosing C) investing D) mortgaging
A) speculating
In which situation is the US government most likely to regulate the marketplace? A) when business practices decrease competition B) when consumers have a complaint C) when it is too difficult to own property D) when prices are too high for most people
A) when business practices decrease competition
Read the scenario. April wants to open checking and savings accounts. Her mom told her to be careful because banks charge fees that can really add up. Before she opens the account, April decides that she should research the fees the banks near her house charge. Which are fees that banks charge account holders? (Select all that apply.) overdraft fees minimum balance fees membership fees ATM fees
ATM fees overdraft fees minimum balance fees
Read the sentence. For a free enterprise system to exist, individuals need to be able to make _[blank]_. Which best completes the sentence? A) money B) problems C) choices D) credit
C) choices
What are the four Ps of marketing (also known as the marketing mix)? A) positioning, preference, purpose, and promise B) product, price, promotion, and place C) performance, persuade, public, and profit D) production, policy, packaging, and planning
B) product, price, promotion, and place
Why is cooperative advertising the most common form of advertising used by wholesalers and manufacturers who jointly advertise a product? (Select all that apply.) A) The manufacturer receives free advertising. B) Large quantities can be held in stock. C) It allows for sales at a discounted price. D) Tracking of sales is easier and more productive.
B) Large quantities can be held in stock. C) It allows for sales at a discounted price.
When should you start planning for retirement? A) You should start planning after college graduation and after you have developed your financial goals. B) You should start planning as soon as you decide on a career path. C) You should start planning only after receiving an income tax refund so that the money can be deposited immediately. D) You should start planning after starting a job and buying a home.
B) You should start planning as soon as you decide on a career path.
Where would you find the most useful information about post-secondary education and training? (Select all that apply.) A) job fairs B) military and school websites C) Department of Education D) college alumni associations
B) military and school websites C) Department of Education
Which accurately describe differences between credit and debit cards? (Select all that apply.) Debit cards charge interest after a 30-day grace period, whereas credit cards do not charge interest. Credit cards charge interest, whereas debit cards do not charge interest. Credit cards pull money from a predetermined line of credit, whereas debit cards deduct funds from a person's banking account. Credit cards deduct funds from a person's banking account, whereas debit cards pull money from a predetermined line of credit.
Credit cards charge interest, whereas debit cards do not charge interest. Credit cards pull money from a predetermined line of credit, whereas debit cards deduct funds from a person's banking account.
Read the scenario. Alfonso is 19 years old and has a high school diploma. Recently, he was promoted to assistant manager at the fast-food restaurant where he has worked since the age of sixteen. His dream is to become the restaurant's manager. What is his best option for achieving his dream? A) He should hope that his manager transfers to another location and that he is his replacement. B) He should find another job and work his way up to a higher position. C) He should work hard, work longer hours, and remain assistant manager. D) He should attend classes at the local college to receive training in management.
D) He should attend classes at the local college to receive training in management.
Read the sentence. Subprime mortgages allowed many individuals to become homeowners; however, sometimes their credit scores were _[blank]_. Which most accurately completes the sentence? A) average B) high C) good D) poor
D) poor
What is the consumer's role in the marketplace? A) someone who destroys goods and services without paying for them via economic exchanges B) someone who builds and sells goods and services through economic exchanges C) someone who ignores and snubs goods and services through economic exchanges D) someone who acquires and uses goods and services through economic exchanges
D) someone who acquires and uses goods and services through economic exchanges
Which is the best reason for why companies use product advertising features? A) to advertise the entire line of products B) to cross-promote another product C) to barter with bulk retail stores D) to focus on a specific benefit
D) to focus on a specific benefit
What is the primary role of producers in the marketplace? A) to provide competitive wages B) to provide a store in which to sell product C) to provide critiques of workers D) to provide goods and services
D) to provide goods and services
How does deposit insurance help prevent a bank panic? Banks make more responsible investments because they have the protection of the government. The government provides close supervision to ensure that banks maintain strong balance sheets so they do not fail. Depositors are less likely to worry about their money and create a run on the bank by withdrawing their funds. The stock market remains strong in the face of an economic slowdown because people know their investments are covered.
Depositors are less likely to worry about their money and create a run on the bank by withdrawing their funds.
Jim wrote a check for $30, but he only had $25 in the bank. What is Jim's account balance? It is $25 because the bank will not honor the check. It is -$5 to cover the cost of the check until he can deposit more money. It is $0 to cover part, but not all, of the check. It is -$70 to cover the cost of the check and the overdraft fee.
It is -$70 to cover the cost of the check and the overdraft fee.
What can happen when the United States government plays a direct role in the economy? (Select all that apply.) It operates as a monopoly. It negotiates trade agreements. It acts as an employer. It competes with private businesses.
It operates as a monopoly. It acts as an employer. It competes with private businesses.
What is a purpose of the Federal Deposit Insurance Corporation (FDIC)? It protects brokers from losing their investments in a stock market crash. It protects banks from closing if there is a run on the bank. It protects businesses from losing their resources in a recession. It protects consumers from losing their money if a bank fails.
It protects consumers from losing their money if a bank fails.
What is the primary function of the Federal Deposit Insurance Corporation? It is a government agency responsible for enforcing federal securities laws. It is a government agency responsible for tax collection. It is the US central banking system and sets interest rates. It provides consumers protection in case of a bank failure.
It provides consumers protection in case of a bank failure.
What were results of the federal government deregulating the airline industry in 1978, known as the Airline Deregulation Act? (Select all that apply.) Large airlines were able to improve productivity. Consumers gained better (lower) prices for airfare. Many small airlines were able to penetrate the market. Many small airlines went out of business.
Large airlines were able to improve productivity. Consumers gained better (lower) prices for airfare. Many small airlines went out of business.
Which is true regarding the FDIC? The FDIC writes fiscal policies approved by Congress. The FDIC enters money into circulation. The FDIC takes over for failed banks. The FDIC determines interest rates for mortgage loans.
The FDIC takes over for failed banks.
Read the sentence. The US government plays an impactful role in the economy, both directly and indirectly. Which is an example of the federal government indirectly affecting the market economy? The US government controls the Federal Deposit Insurance Corporation. The US government owns and operates the United States Postal Service. The US government provides social security benefits for senior citizens. The US government supplies electrical power to households via the Tennessee Valley Authority.
The US government provides social security benefits for senior citizens.
Which is an example of the indirect role of government in the economy? The government provides a service that private businesses will not offer. The government competes with private business to ensure quality products. The government has partial ownership in a business along with investors. The government passes laws that keep electricity rates affordable.
The government passes laws that keep electricity rates affordable.
According to the Monthly Budget worksheet, how does a person determine how much money he or she has available to put in savings? The person subtracts total expenses from total income. The person subtracts variable expenses only from total income. The person divides total expenses by twelve. The person divides total income by twelve.
The person subtracts total expenses from total income.
What would count as a negative against your credit score? a credit utilization ratio of 20 percent a credit history longer than 10 years a payment made more than 30 days past due a mix of installment and revolving credit
a payment made more than 30 days past due
What does a high credit score indicate? a person who has not established a credit account a person who has a large number of credit accounts a person who has problems repaying debts on time a person who has a history of repaying debts on time
a person who has a history of repaying debts on time
What is a budget? a plan for spending your money to meet your wants and needs a plan for spending your money to keep you without money a plan for spending your money to keep your parents happy a plan for spending your money to meet the wants and needs of others
a plan for spending your money to meet your wants and needs
What is overdraft protection? a service that allows checking account holders to transfer funds from a certificate of deposit to their checking account a service that prevents checking account holders from accidently bouncing a check a service that allows checking account holders to transfer funds between checking and savings accounts free of charge a service that prevents others from monitoring and sorting through checking account holders' financial information
a service that prevents checking account holders from accidently bouncing a check
Which are characteristics that make up capitalism? (Select all that apply.) freedom government control competition equality
freedom competition
What were the goals of the Tennessee Valley Authority Act? (Select all that apply.) improve the economy of the Southeast provide power at a lower cost raise taxes on the people using the power plants allow private companies to run the power plants
improve the economy of the Southeast provide power at a lower cost
Which best defines disposable income? income used to purchase disposable items income available after taxes and other mandatory expenses income strictly used for food, clothing, and shelter income available before taxes and other mandatory expenses
income available after taxes and other mandatory expenses
What is disposable income? income before taxes and mandatory expenses have been taken out income that is set aside to pay for fixed expenses, such as housing and loan payments income that must be saved for unexpected emergencies and other variable expenses income that is available after taxes and other mandatory expenses have been paid
income that is available after taxes and other mandatory expenses have been paid
What do credit unions offer that banks do not? small business loans mortgages checking accounts memberships
memberships
Read the scenario. Anton needs financial management help to better invest his money. He wants to set up some certificates of deposit and mutual funds, as well as purchase stock in local companies. He knows he can go to his local bank and speak to a professional. Which bank official will best assist Anton with his needs? branch manager personal banker broker teller
personal banker
Which are considered fixed expenses? electricity, rent, gas, and Internet gas, rent, and a car payment rent, cable TV, and car insurance water, a car payment, rent, and car insurance
rent, cable TV, and car insurance
Which are regulations the government may impose on businesses? requirements to provide accurate information to consumers requirements to ensure that they participate in competition requirements to work with other businesses to control prices and access requirements to protect consumers as well as workers
requirements to provide accurate information to consumers requirements to ensure that they participate in competition requirements to protect consumers as well as workers
What is the purpose of credit? (Select all that apply.) to provide customers with a powerful tool for creating personal financial success and success in business to provide customers with loaned money with no interest that can be used at various shops and restaurants as they see fit to provide customers with the opportunity to purchase and consume goods and services and to pay at a later date to provide customers with the opportunity to purchase and consume goods and services for free
to provide customers with the opportunity to purchase and consume goods and services and to pay at a later date to provide customers with a powerful tool for creating personal financial success and success in business
Read the scenario. Zoe is preparing her monthly budget. She lists her income from her job. She then starts to list her expenses. Her first list of expenses includes food, entertainment, clothes, and gas. What type of expenses are on Zoe's list? optional variable mandatory fixed
variable
Read the scenario. Paul is 18 years old and has never had a banking account. He has a job and wants to start saving money to buy a car. What are some important things Paul should consider before opening an account? (Select all that apply.) whether the financial institution has government oversight the types of services he will need his current credit rating whether the financial institution gives rewards for membership
whether the financial institution has government oversight the types of services he will need
