Economics Final
Having multiple credit cards, some of which are paid late and even then only the minimum payment is made is an example of irresponsible credit behavior in which of the 5 C's of creditworthiness?
Character
Having one credit card which is paid in full every month is an example of responsible credit behavior in which of the 5 C's of creditworthiness?
Character
Does not own anything of enough value for guarantee of payment is an example of irresponsible credit behavior in which of the 5 C's of creditworthiness?
Collateral
Willing to pledge your vehicle as guarantee of repayment is an example of responsible credit behavior in which of the 5 C's of creditworthiness?
Collateral
What are the three main economic systems called?
Command, Market, and Traditional
Freelance worker with no guaranteed employment, using a bank that is on the verge of folding is an example of irresponsible credit behavior in which of the 5 C's of creditworthiness?
Conditions
Working in a growing industry that is not suffering from layoffs and having a stable bank account is an example of responsible credit behavior in which of the 5 C's of creditworthiness?
Conditions
What principle is being practiced when you have to decide on whether or not to allow your neighbor to hook you up with illegal cable or not?
Cost-verses-benefits principle
What is the best example of an entrepreneur?
Developer of a new product
Identify one disadvantage of a market economy.
Does not provide basic needs of everyone in society, which can lead people to slip into poverty
What is the study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources?
Economics
What is the best example of capital?
Education
On your road trip you decide to use your credit card and ended up going over your limit. As a result, you get a $40 overdraft fee and your credit score goes down by 15 points two months later." Which principle is being applied here?
Future-consequences-count principle
Collateral
Guarantees another personal asset as a source of repayment if you can't repay
Character
How you come off to your lender
What is the cost of the next best alternate use of money, time, or resources called?
Opportunity cost
What is the best example of labor?
People
Which category in the Circular Flow of Economic Activity Model is responsible for selling goods and services to consumers?
Product market
What are the four categories in the Circular Flow of Economic Activity?
Product market, businesses, resource market, individuals
Identify one advantage of a command economy.
Products produced fulfill needs
What are two main characteristics of a market economy?
Profit, not quotas, is the motive for increasing work and resources are owned by individuals
The bulk of banks' sources of funds comes from deposits - checking, savings, money market deposit accounts, and time certificates. What is the most common uses of these funds?
Real estate, commercial, and industrial loans
Which category in the Circular Flow of Economic Activity Model is allowed to use new ideas for manufacturing?
Resource market
What is the fundamental economic problem facing all societies?
Scarcity
What principle is being practiced when you are trying to do decide on whether to buy lunch out at a restaurant or put gas in your car? You cannot afford to buy both.
Scarcity-forces trade offs principle
What are two main characteristics of a command economy?
Wealth is distributed equally by the government and economic decisions are made by the government
What are the three economic choices every society must make?
What to produce? How to produce? Whom to produce it for?
What are the four factors of production?
land, labor, capital, and entrepreneurship
Capacity
Ability to repay your loan. (cash flow and sources of repayment)
Identify one advantage of a market economy.
Adjusts to change easily
What are two main characteristics of a traditional economy?
An economic system where tradition and custom govern economic decisions and resources are allocated based on inheritance
Which financial institution allocates funds from savers to borrowers in an efficient manner?
Banks
Which institution ranks 2nd highest in control of the market shares in the financial intermediary industry?
Banks
Which category in the Circular Flow of Economic Activity Model is responsible for manufacturing goods and services for the product market?
Businesses
Identify one disadvantage of a command economy.
Cannot determine societies objectives and consumer preferences as well as market can
Having stable employment and just received a raise is an example of responsible credit behavior in which of the 5 C's of creditworthiness?
Capacity
Just getting laid off from your job, not looking for a new one is an example of irresponsible credit behavior in which of the 5 C's of creditworthiness?
Capacity
Not having a car, renting your home, no retirement plan, and credit card debt is an example of irresponsible credit behavior in which of the 5 C's of creditworthiness?
Capital
Owning a home, a car, some stock investments and 401k is an example of responsible credit behavior in which of the 5 C's of creditworthiness?
Capital
What principle is being practiced when your parents pay you money for getting good grades?
Incentives-matter principle
Which category in the Circular Flow of Economic Activity Model controls the factors of production?
Individuals
Which economic indicator lets borrowers know when they should or should not borrow money?
Interest rate
Identify one advantage of a traditional economy.
Little friction among members because there is little competition
At the beginning of August, you and your family go the Valley Plaza Mall to go school shopping. You are able to find everything you need at the mall from about 4 stores without having to go anywhere else. Which principle is being applied here?
Markets-coordinate-trade principle
Capital
Money you have invested in your business
What is a basic requirement for survival that includes food, clothing, and shelter?
Needs
Conditions
The circumstances affecting your loan. (describes economic, legal, and regulatory circumstances)
Identify one disadvantage of a traditional economy.
There is little social mobility (your role is determined by birth)
What principle is being practiced when you find yourself having to decide whether to study one more hour, buy one more shirt, or eat one more slice of watermelon?
Thinking-at-the-margin principle
What is an alternative choice called?
Trade off
What is an alternative choice called? When you choose one thing over the other.
Trade off
What principle is being practiced when your family does not make all its own clothes, build all its own furniture, grow all its own food, and produce its own medicines?
Trade-makes-people-better-off principle
What is the best example of land?
Trees
What is something unnecessary, but desirable?
Wants
