Economics and Finance Flashcard

Front

If you spend $100 on concert tickets instead of investing it in a savings account for one year at 5% interest, your opportunity cost is:

Back

The $5 you could have earned in interest

Front

Which of the following best shows the impact of inflation? A movie ticket that cost $8 last year now costs $10

Back

A movie ticket that cost $8 last year now costs $10

Front

Which asset is the most liquid? Options: A used car you’re trying to sell, A certificate of deposit that locks funds for 2 years, A checking account balance, A house in the suburbs

Back

A checking account balance

Front

An investor who diversifies is trying to:

Back

Reduce risk by not relying on a single asset

Front

Which scenario illustrates compound interest? Options: You lend a friend $100 and he pays back $110 after one year, A savings account pays interest on both your deposit and the interest already earned, You buy a stock that pays a one-time dividend, You earn $20 every month from renting your bike

Back

A savings account pays interest on both your deposit and the interest already earned

Front

Which situation would increase a country’s GDP? A parent cooks dinner for their family at home, A U.S. company builds and sells cars in Germany, A factory produces more goods that are sold in domestic stores, A citizen receives Social Security benefits

Back

A factory produces more goods that are sold in domestic stores

Front

If you own equity in Tesla, it means you:

Back

Own a share of Tesla’s value and profits

Front

Why would an investor buy a bond from the U.S. government?

Back

To receive regular interest payments and repayment at maturity

Front

If the U.S. places a tariff on imported steel:

Back

U.S. consumers pay more for steel products

Front

A government cuts taxes to encourage spending. This is an example of:

Back

Fiscal policy