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
