Money Matters Final Exam

Deposits are insured by the Federal Deposit Insurance Corporation up to _____________ per depositor.

$100,000

Derek is paid $550 per week, but only brings home $375 due to deductions. Which of the following is Derek's net earnings? $925 $550 $375 $175

$375

Most countries try to maintain an inflation rate of __________ per year.

2-3%

Financial advisors typically recommend an individual has enough savings to cover at least _____________ months worth of bills.

3-6

A formal proposal which provides detailed descriptions of a new business to potential investors and lenders is known as which of the following? A company summary A business support initiative An entrepreneurial manual A business plan

A business plan

Which of the following best describes a credit union? A community organization providing business owners with education and donations A government foundation created to improve people's credit, particularly the credit of business owners A members-only cooperative created by labor unions or groups of employees A public establishment for the custody, loan and exchange of funds

A members-only cooperative created by labor unions or groups of employees

A good for which demand will not change in relation to price is known as which of the following? A compliment A luxury A necessity An inferior good

A necessity

Which of the following accurately describes a balance sheet? A guide to a business's pricing policies An explanation of how a business spends and earns money A summary of a business's assets, liabilities and equity A description of a business's products and services

A summary of business's assets, liabilities and equity

Which of the following is an accurate description of take-home pay? Total income Income which is not deposited into a checking account Total income plus any monetary gifts received After-tax income available for living expenses

After-tax income available for living expenses

Which of the following is one of the four economic stages of families? Compressing Mid-Life Landing Aging

Aging

Businesses can handle risks through which of the following? Controlling risks Transferring risks Avoiding risks All of the above

All of the above

Sources of capital include which of the following? Banks and credit unions Suppliers Previous owners of the business All of the above

All of the above

The factors of a start-up cost estimate include which of the following? Size of the business Type and amount of inventory needed Operating expenses which must be paid before any revenue is received All of the above

All of the above

Which of the following accurately describes a franchise? A business which is developed by a group of people through social media An agreement to operate a business in the name of an established company A company which sells no products, but a large variety of services A nonprofit organization created to improve relations among business owners

An agreement to operate a business in the name of an established company

The Federal Trade Commission Act considers which of the following an unfair and deceptive practice? Telemarketing Bait and switch Advertising aimed at children Variable pricing systems

Bait and switch

Which of the following are the largest lending agencies in the United States? Credit unions Banks Suppliers Business owners

Banks

Individual designated to receive a sum of money upon the death of a policy holder correctly defines which of the following? Account holder Beneficiary Liable individual Insured

Beneficiary

When you go to the movies you have $5.00 to spend on snacks. You want candy and popcorn, but each costs $5.00. You decide to buy popcorn. What is the opportunity cost of the popcorn?

Candy

Which of the following is NOT a financial obligation or opportunity of launching families? Child care Reevaluation of housing needs Savings and individual retirement accounts College expenses

Child care

Some businesses avoid risks by doing which of the following? Only doing business online Purchasing multiple insurance policies Keeping records of all transactions and customers Considering market research

Considering market research

Because the family life cycle changes, goals require which of the following? Priorities Long term target dates Constant updating Lots of thought

Constant updating

Which of the following is an indicator of how consumers are feeling about the economy? Producer confidence index Producer price index Consumer confidence index Consumer price index

Consumer confidence index

The __________ considers the weighted averages of a group of consumer goods and services. Consumer price index Aggregate supply Producer price index Aggregate demand

Consumer price index

Which of the following is also known as the "cost-of-living index"? Consumer price index Gross national input Gross national income Producer price index

Consumer price index

Which is NOT a criterion banks use for evaluating loan applicants? Capital Control Capability Circumstances

Control

Which of the following is the most complicated form of business? Corporation Franchise Partnership Sole proprietorship

Corporation

All are examples of economic risks except: Customer dishonesty Competition Product obsolescence Recession

Customer dishonesty

A specified amount of money an insured individual must pay before an insurance company will pay a claim correctly defines which of the following? Deductible Tangible Deposits Contributions

Deductible

_________ refers to a decrease in price level.

Deflation

Which of the following causes of inflation is often described as "too much money chasing too few goods"? Demand-pull inflation Cost-push inflation Demand-push inflation Cost-pull inflation

Demand-pull inflation

A torch is featured on the reverse of which of the following types of U.S. coins?

Dime

Which of the following types of inflation occurs when sales drop and retailers cannot place higher prices on customers? Deflation Disinflation Hyperinflation Pre-inflation

Disinflation

__________ is a decrease in the rate of inflation. Hyperinflation Disinflation Deflation Stagflation

Disinflation

After creating his budget, John realized his expenses exceed his income. To resolve this issue he can do which of the following? Go on a shopping spree Eat out less frequently Invest more in the stock market Work fewer hours

Eat out less frequently

Which type of risks occur from fluctuations in business conditions? Routine risks Human risks Economic risks Natural risks

Economic risks

Which of the following terms is used to describe the fluctuation in demand of a certain product in relation to pricing? Law of demand Elasticity Economics Economic inefficiency

Elasticity

(T or F) Hyperinflation means it is easier for people to make purchases because they are able to carry around a larger amount of money.

F

(T or F) Raising your credit standing is an advantage of equity capital.

F

(T or F) Short-term goals cover a time period of one to two years.

F

(T or F) The law of supply is "as the price of any good falls, the quantity demanded will increase."

F

(T or F) Travel and recreational opportunities is a financial opportunity for the launching economic stage of families.

F

Financial institutions are monitored through which of the following? National Banking Union Administration Federal Deposit Insurance Corporation National Financial Institution Agency Federal Reserve System

Federal Reserve System

Which of the following is an example of a natural risk? Customer dishonesty Competition Fire Employee error

Fire

Which of the following verifies the identity and eligibility of an employee to work in the United State? Form I-9 Form W-2 Form W-4 Form 1040

Form I-9

Which of the following types of currencies was NOT used in the U.S.? British currency German currency French currency Spanish currency

German currency

Advantages of entrepreneurship include which of the following? Increased cash flow due to business revenue Getting to set your own work schedule Putting in less hours than a regular job All of the above

Getting to set your own work schedule

Which of the following is a measure of an economy's output or production? Gross national output Gross domestic product Gross domestic output Gross national input

Gross domestic product

A budget helps prevent debt by detailing which of the following? Listing expenses Creating new income Identifying shortages before they happen Showing current debts

Identifying shortages before they happen

The economy of the United States depends on which of the following? Imports and exports Corporate takeovers Individual participation The economies of other countries

Individual participation

Which of the following describes a stable or thriving economy? Individuals are spending less on wants and more on needs Individuals are increasing their savings Individuals are experiencing higher unemployment rates Individuals are increasing their spending

Individuals are increasing their spending

Which of the following is the amount charged as a percentage of the initial loan borrowed from a lender? Interest rate Rate of inflation Possession rate Principal rate

Interest rate

Which of the following is TRUE of external theft? It is a routine risk which is always preventable It is the costliest human risk to businesses It is an economic risk and should be covered by insurance It is the only risk which businesses have full control over

It is the costliest human risk to businesses

Which of the following is NOT an effect of inflation? Lowers purchasing power Lowers standard of living for those on fixed incomes Lowers employment rates among unskilled workers Lowers domestic competition if higher than in other countries

Lowers employment rates among unskilled workers

Money can be used to intermediate the exchange of goods and service. This describes which of the following basic functions of money? Medium of exchange Store of value Unite of accounts Standard of deferred payments

Medium of exchange

Which economic stage of families is characterized by parents refocusing on their relationship, the height of careers and earnings, and the possibility of becoming grandparents? Expanding Mid-years Launching Aging

Mid-years

Which of the following is an example of a new banking technology? Checking accounts Savings accounts Mobile banking applications Teller lines

Mobile banking applications

According to monetary theory, which of the following is the main driver in changing economic activity? Taxes Money supply Exchange rate Employment rate

Money supply

How does immigration impact the economy? Immigration causes an increase in the purchase of substitute goods, causing the purchase of normal goods to decrease More people means supply increases, causing prices to rise and demand to decrease More people means more money put into the economy, causing the system to stretch to accommodate everyone Immigration causes an increase in the number of choices people have, increasing opportunity cost

More people means more money put into the economy, causing the system to stretch to accommodate everyone

Which of the following interest rates is expressed in terms of current dollars as the percentage of the amount loaned? Simple interest rate Nominal interest rate Real interest rate Compound interest rate

Nominal interest rate

Which of the following is NOT a way one can participate in the consumer economic system? Shopping Not paying taxes Paying bills Maintaining checking account

Not paying taxes

Which of the following are prepaid debit cards which are reloaded with employee wages? Direct cards Debit cards Payroll cards Monetary cards

Payroll cards

hich of the following is a slip of paper which allows the user to make a payment from his or her bank account to a business or individual? Cash Debit card Personal check Credit card

Personal check

Which of the following measures the selling prices received by domestic producers? Gross national input Consumer price index Producer price index Gross national income

Producer price index

Colin is borrowing money from his uncle to start his business. In order to help avoid misunderstandings regarding the loan, Colin should do which of the following? Hire a lawyer Hire his uncle as the financial director of the business Put all agreements in writing Involve other family members as witnesses

Put all agreements in writing

Which of the following is the rate of rising prices in a country? Possession rate Principal rate Interest rate Rate of inflation

Rate of Inflation

Which of the following is NOT one of the constants the aggregate supply curve assumes? State of technology Resource prices Rules providing production incentives Rate of production

Rate of production

Which of the following types of inflation involves the government using financial stimuli to increase the country's output? Deflation Disinflation Reflation Hyperinflation

Reflation

Employee screening and training are considered which method of handling risk? Risk retention Risk avoidance Risk prevention and control Risk transfer

Risk prevention and control

Which of the following is NOT a type of business risk? Routine risk Human risk Economic risk Natural risk

Routine risk

Which of the following are meant to store money which is NOT intended for daily expenses? Checking accounts Loan accounts Savings accounts Credit accounts

Savings accounts

__________ occurs in the economy when unemployment and inflation are both high. Hyperinflation Disinflation Deflation Stagflation

Stagflation

Money can be saved and used in the future without rapidly losing its purchasing power. This describes which of the following basic functions of money?

Store of Value

If there is a change in the number of producers in the market, which of the following will also change? Supply Opportunity cost Elasticity Demand

Supply

( T or F) The Consumer Product Safety Commission is empowered to conduct research on safety and collect data regarding injuries.

T

(T or F) Cost-push inflation leads to a leftward shift of the aggregate supply curve.

T

(T or F) Current events can impact personal financial decisions, particularly through the stock market.

T

(T or F) Gross National Income includes all of the income earned by a country's residents and businesses including those earned abroad.

T

(T or F) Take-home pay minus total living expenses equals money available for savings and investment.

T

(T or F) The aggregate demand curve assumes all things are constant, including other countries' price levels and exchange rates.

T

(T or F)Demand can change due to a change in the number of people in a market, change in taste or preferences, expectations of the future, change in income, or change in the price of a substitute or complementary product.

T

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is responsible for which of the following? Child and Adult Care (CAC) program Family Investment Independence Program (FIIP) Work First programs Temporary Assistance for Needy Families (TANF) program

TANF program

The family life cycle helps marketers define which of the following? Budget expenses Target market Someone's age Family size

Target market

what is an entity which provides services for the consumer and is NOT part of the national government

The Better Business Bureau

Which of the following provides a basis for the regulation of the testing, manufacture, distribution and sale of food, drugs, cosmetics and medicinal products in the U.S.? The Uniform Consumer Credit Code The Federal Food, Drug, and Cosmetic Act The Consumer Products Safety Act The Food and Medicinal Production Health Act

The Federal Food, Drug, and Cosmetic Act

Which of the following best describes capital? What a business is worth The monetary funds invested in a project The level of experience the manager of a business has What equipment a business needs

The monetary funds invested in a project

CDs are similar to savings accounts because of which of the following? They have a fixed rate They accrue interest They have a fixed term They have high interest rates

They accrue interest

Which of the following treasuries are NOT a type of government bond? Treasury bonds Treasury funds Treasury bills Treasury notes

Treasury funds

Which of the following is an economic issue which seems to have a direct impact on crime? Elasticity Unemployment Global markets Supply and demand

Unemployment

Which of the following defines opportunity cost? A good whose consumption decreases when income increases What you are giving up or sacrificing by turning down one opportunity in order to take advantage of another opportunity As the price of any good falls, the quantity demanded will increase Measure of the general responsiveness of quantity to change in price

What you are giving up or sacrificing by turning down one opportunity in order to take advantage of another opportunity

Discrepancies in your checkbook occur in which of the following situations? When your expenditures differ from your income When your income differs month to month When your bills differ from your expected expenditures When your bank statement differs from your check register

When your bank statement differs from your check register

A $20 bill features which of the following on the reverse? U.S. Treasury White House U.S. Capital Independence Hall

White House

Which of the following provides wage replacement and medical benefits to employees who suffer from job-related illnesses or injuries? Paid time off Retirement plans Workers compensation Disability insurance

Workers compensation

Which of the following is a disadvantage of equity capital? You must repay or face the possibility of bankruptcy Your credit standing may be lowered by the sue of equity capital You must offer collateral in the form of valuable property You must contend with the investor as a co-owner of the business

You must contend with the investor as a co-owner of the business

A country possessing unique resources or capabilities to allow the lowest cost of production for a product is known as which of the following? Absolute advantage Monopoly Surplus Comparative advantage

absolute advantage

An individual who hold legal control of assets in a trust account is known as which of the following? Controller Beneficiary Claimer Dependent

beneficiary

How many categories are there of the family life cycle?

eight

Which of the following is the least common form of business organization?

partnership

Ron opened the first McDonald's® in his small town after reading about the success of others in his state. This is an example of which way to enter into business? Started his own business Purchased an existing business Purchased a franchise Took over the family business

purchased a franchise

A successful entrepreneur does NOT necessarily need which of the following? Superior organizational skills Strong coaching abilities Tremendous drive A strong support system

strong coaching abilities

Which of the following is NOT considered a living expense when determining expenses? Taxes Insurance Food Transportation

taxes