ECONOMICS UNIT 1

On average, who suffers from the highest unemployment rates?

people with a high school diploma

On average, who earns the highest salaries?

people with a professional degree

Read 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?

$0

Which accurately describes a push marketing tactic to help manufacturers sell more products?

A manufacturer offers department stores incentives for selling its product.

What is the process for qualifying for a payday loan?

A person must possess an active checking account, valid identification, and be at least 18 years old.

What is overdraft protection?

A service that prevents checking account holders from accidentally bouncing a check.

Comparative advertising includes which of the following criteria? (Select all that apply.)

Additional Features Increased Quantity Better Price

Question 1 (multiple choice) 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?

George will because he is younger and saving for a longer period.

Which form is used by employers to withhold the proper amount of income tax from employees' paychecks?

W-4

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.

Which accurately describe features on a credit report? (Select all that apply.)

a history of delinquent payments a person's personal information, such as date of birth and Social Security number. a person's credit account information, such as lines of credit from credit cards.

What would count as a negative on your credit score?

a payment made 30 days past due.

What does a high credit score indicate?

a person who has a history of repaying debts on time.

What is a budget?

a plan of spending your money to meet your wants and needs

What are typical fees associated with checking accounts from banks without any branches? (Select all that apply.)

account minimum fees ATM fees overdraft fees

Which best explains product advertising features?

advertising that focuses exclusively on the benefits of the product

What is creditworthiness?

an appraisal made by a lender as to how likely a customer is to repay a loan as agreed.

Which are part of the marketing mix? (Select all that apply.)

know what people will pay have multiple locations **PARTIAL**

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?

payday loan

Which tax is the main source of revenue for the federal government?

income

Which best defines disposable income?

income available after taxes and other mandatory expenses

Examples of Vendor Advertising

television ad for Apple iPads television and print ads for Nike athletic apparel Estee Lauder Cosmetics Company ads that run in fashion magazines Coca-Cola ads that air during televised sporting events

Which is the best example of direct vendor advertising?

television or radio ads from the local car dealer. **INCORRECT**

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

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?

$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

*LESSON 18*

*BANKING*

*LESSON 2*

*Budget and Goal Setting*

*LESSON 4*

*CREDIT*

Vendor Advertising

Another type of retail advertising is referred to as vendor advertising. This is advertising that comes directly from a particular vendor, intended to get consumers to exclusively buy a specific brand, without including a named price or specific deal on the product.

LESSON 5

BUILDING AND PROTECTING

Where would you find the most accurate information about future job prospects?

Bureau of Labor Statistics

Key Elements of Radio Advertisements

Businesses can focus on specific target markets and customers. Ads are aired across multiple types of radio stations, such as music stations and news stations. Ads rely on audio to deliver the message of the product or service.

Types of Accounts

Checking Accounts Savings Accounts Investment Accounts Loans

How does the government protect investors?

It oversees the buying and selling of securities so that consumers are not taken advantage of by businesses.

Key Elements of Television Advertisements

Companies have to cover the cost of producing the television commercial, including all elements of filming, hiring talent, etc. Companies also have to pay for airtime, typically sold by length of the ad (15 seconds, 30 seconds, etc.). Rates vary depending on the time of day the television commercial airs; early evening, which is considered prime time, is more expensive than late-night time slots. To be effective, a television commercial needs to provide a clear message or demonstration about the product and/or service the commercial is about. Television commercials are shown on major networks, cable channels, local television stations, and public access channels. Again, costs with these outlets vary widely, with local channels typically charging less than major networks.

Forms of Product Advertisements

Comparative Advertising, Direct Mail, Cooperative Advertising, Promotional Advertising

How do you benefit from understanding personal finance? (Select all that apply.)

Comprehending the difference between debit and credit cards. Making quality choices about money by creating and managing a budget.

Which accurately describe differences between debit and credit cards? (Select all that apply.)

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.

What does a person need to consider when planning his or her future? (Select all that apply.)

DO NOT SELECT ALL

Where would you find the most useful information about post-secondary education and training? (Select all that apply.)

DO NOT SELECT ALL

What is true about the risk and return of an investment?

Higher-risk investments offer the potential for a higger return

Which are disadvantages of credit? (Select all that apply.)

If you are late making payments, interest rates can increase. If you fail to make payments, you can hurt your credit score.

Drawbacks of Online Advertising

Internet users often find that online ads can be annoying. They are always just one click away from leaving the ad behind. Internet users can use software or browser settings to limit their exposure to online ads. Online ads are easy to copy. For example, by merely cutting and pasting, someone can copy a logo or an image. The Internet can become easily cluttered with ads. Ad overload keeps users from focusing on any one ad, and often sends potential customers elsewhere.

Why is cooperative advertising the most common form of advertising used by wholesalers and manufacturers who jointly advertise a product? (Select all that apply.)

It allows for sales at a discounted price Large quantities can be held in stock

How do individuals benefit from creating a budget? (Select all that apply.)

It helps them devise a plan to save money. It helps them identify their income. It helps them identify their expenses.

Review the table and read the sentence that follows. Jim wrote a check for $30, but he only had $25 in the bank. What is Jim's account balance?

It is -$70 to cover the cost of the check and the overdraft fee.

What is the meaning of the word economics?

Laws for the home.

Which are accurate regarding debit card reward programs? (Select all that apply.)

Most debit card reward programs are less lucrative than credit card reward programs. Some debit card reward programs offer cash back at select retailers.

Benefits of Online Advertising

Online advertising reaches a wide consumer base. Businesses have many options in the way ads appear online. Options include pay-per-click advertising, pop-up style ads, or the establishment of a business's own website. Online advertising can be more cost-effective than radio or television, because it can be more narrowly focused. Online ads are easier to customize and can be personalized for customers in very specific ways, based on information such as search history and click history.

Drawbacks of Radio Advertisements

People who are listening, especially in their cars, can easily tune out advertisements simply by switching the station. Ads are dependent on audio senses only, forcing consumers to imagine the visual element. Radio ads are often very repetitive, and take up a lot of air time on many stations.

*LESSON 1*

Personal Finance and Advertising

Four P's

Product, Price, Promotion, Place

What are the four P's of marketing (also known as the marketing mix)?

Product, Price, Promotion, and Place.

Benefits of Radio Advertisements

Radio ads are less costly to produce than television ads. Businesses can easily customize a message to a target audience, based on the radio station format. For example, people who listen to one particular type of station (such as rock, country, etc.) will typically hear ads that more closely match their demographic. Radio ads can be inventive and clever, finding ways to create mental images that help people remember the products and increase effectiveness of the ads. Advertisers have more flexibility in choosing the best air times at affordable rates.

Radio

Radio is the oldest form of broadcast media, but advertisements through this form are still a widespread and valuable strategy to this day.

Advertising Price and Product Availability

Retailers must ensure product availability to consumers if they are going to advertise in this way. Advertising provides price information and any applicable discounts or sales promotions. Advertisements come from the retailer, either local or as part of a national campaign.

Which most accurately describes a pull marketing technique used to help manufacturers sell more products?

Setting up a booth at a consumer products show to encourage sales **INCORRECT**

Broadcast and Online Media

These mediums can be effective channels for advertising. They can generate appealing, animated images and connect directly with the audience in a more emotional way than most print ads.

What is an advantage of credit unions?

They are nonprofit institutions, and their primary concern is the member.

Drawbacks of Television Advertisements

Television ads, especially on national networks, can be extremely costly. The repetitive nature of commercials can eventually annoy consumers rather than attracting them. Viewers might mute the audio or just ignore the ads. The wide exposure can make it difficult for a major brand to make changes to its product. Consumers tend to like consistency, so there is a risk in attempting to change a product's message.

Benefits of Television Advertisements

Television commercials can increase sales by reaching a wide consumer base. Television commercials can be focused on a particular target market. For example, commercials that run during the daytime typically promote products and services geared toward those who are home during the day, such as homemakers or those who are retired. Commercials that run during sporting events tend to be focused toward sports fans. Children's programming typically show commercials for toys. Television commercials appeal to a multitude of senses and human emotions.

Promotion

The company uses a combination of tools and techniques to spread information about the product. Questions: Should we focus our energy in online advertising or use television ads? Should we create a social media campaign?

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

Cooperative Advertising

This common form of advertising is used by wholesalers and manufacturers who jointly advertise a product. For example, if a manufacturer wants to promote a new coffeemaker, it might team up with a wholesaler or retailer of household goods to advertise the product. Because the product is advertised directly from the manufacturer, the wholesaler is then able to sell it at a discounted price, and keep track of supplies so it can have large quantities in stock.

Promotional Advertising

This form of advertising involves creating an ad campaign featuring a special activity of some kind as part of the promotion. For example, sale promotions might offer discounted prices on featured products for a limited time, or advertise a free gift with a minimum purchase. This type of advertising also applies to product displays that draw customers to buy products or services.

Direct Mail

This form of advertising was one of the earliest methods of sending product information to consumers. Often termed promotional mail, direct mailing includes catalogs, flyers, and product or service brochures.

Comparative Advertising

This form of product advertising involves a business comparing its product to those of its competitors. An ad could include offers such as better price, increased quantity for your money, or additional features or benefits.

Price

This identifies the cost of the good or service. The company sets a price for the good or service by considering many factors beyond the profit it wants to make. Questions: How much are people willing to pay? Should this product be a "high end" product that costs more, or a "value" option that saves people money?

Product

This identifies the good or service being sold and what is unique or special about it. Questions: What makes our product different from similar products? What will our product packaging look like?

Place

This identifies where and how the product is sold. Questions: Should we have retail stores, or sell our product entirely online? Should we have other retailers sell our product?

Advertising Product Features

This strategy can be carried out by a local store, but oftentimes it is part of the company's overall campaign. These ads tend to focus solely on a single featured product. Advertisements and promotions generally come directly from a manufacturer or producer of the product. Advertising focuses exclusively on the product features or benefits.

Which describes the best use of a checking account?

To access cash

What are the three largest credit reporting agencies?

TransUnion, Equifax, and Experian

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 type of services he will need

Which questions are asked on the W-4 form? (Select all that apply.)

Whether you are single or married Whether you are dependent or independent Whether you are head of household

How is whole life insurance different from term life insurance?

Whole life insurance doesn't expire, whereas term life insurance does.

Online

With advances in online technology, more businesses are turning to a newer form of advertising: online advertising.

Which are advantages of credit? (Select all that apply.)

You can buy items now and pay for them later You make one monthly payment.

Which is best defined as "the borrowing of money to make purchases now and paying the money back later"?

credit

What is the function of credit cards?

credit cards enable individuals to borrow against their line of credit to purchase goods and services.

What type of card is issued by a credit union or bank and allows the user to purchase goods and services electronically by deducting funds directly from his or her checking account?

debit card

Which items make up the marketing mix?

place, price, promotion, product

Which are offered by joining the military after high school? (Select all that apply.)

receive tuition assistance after serving a certain number of years. receive training while earning a salary.

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?

rent and car insurance

Which are considered fixed expenses?

rent, cable TV, and car insurance

Examples of Advertising Product Features

sleeping bag that can be used in temperatures as low as -40 degrees wrinkle-free and stain-resistant clothing programmable remote control vacuum athletic shoes that claim to make you run faster mattresses designed to help you sleep better nonstick cookware

What is the purpose of credit? (Select all that apply.)

to provide customers with the opportunity to purchase and consume goods and services to pay at a later date. to provide customers with a powerful tool for creating personal financial success and success in business.

Examples of Advertising Price and Product Availability

weekly grocery ads in newspapers or magazines retailer-created flyers distributed by mail signs inside or outside of the store television or radio ads from car dealers direct mail ads from a gym offering a reduced price for membership social media ads pointing out sales on products you have searched for online special in-store displays for sale items product demonstrations or free product samples in grocery stores / warehouse club stores