Mod. 6 Part B

The main benefit of a technical school certification is

• more limited choices for careers

• more time spent perfecting skills compared to college

• reduced costs compared to other degree options

• reduced earning potential compared to college

Jared's friends invite him to dinner at an expensive restaurant. Jared examines his budget and determines he cannot afford an expensive dinner, so he declines the invitation. Which of the following best represents the reason for Jared's decision?

• His dislike of the selected cuisine

• His limited income and budget

• Lower price of an alternative option

• Preference for another style of food

One bank offers a 4% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. Assuming no other differences between the loans, a customer should choose the fixed rate loan because

• the interest rate is higher and guaranteed to increase

• the interest rate is higher but will not increase

• the interest rate is lower and will not increase

• the interest rate is lower but is likely to increase

One bank offers a 2% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. It is likely better to choose the fixed rate loan, even though the interest rate is higher, because the rate on the

• fixed loan is open to fluctuation

• variable loan appears less attractive

• variable loan can increase dramatically

• variable loan will never increase

Roger always purchased insurance for the 10 years he owned an expensive speedboat. Since he never had an accident, the premiums he paid were

• beneficial because Roger was protected from financial loss

• fruitless because Roger received nothing in return

• unnecessary because Roger values long term security

• wasted because Roger preferred protection to present cash

In the event no property damage or loss occurs during an insurance contract period, the premium payments were wasted only if the policyholder

• derived more benefit than the premium cost

• paid a minimal cost compared to received benefit

• would have preferred added risk over security

• would have preferred added security over risk

If private investors put a lot of money into the U.S. economy, the gross domestic product will increase. What else will likely occur?

• A decrease in inflation and in the unemployment rate

• An increase in inflation and in the unemployment rate

• An increase in the unemployment rate and a decrease in inflation

• An increase in inflation and a decrease in the unemployment rate

A period of economic stability began in the 1980s. In 2001, prices began to increase. In 2007, an economic crisis caused prices to fall. Which of these dates would be considered the peak of this cycle?

• 1980

• 1990

• 2001

• 2007

In 2008, Federal Reserve Chairman Ben Bernanke made credit more available within the U.S. financial system by loaning money to banks. This action was to encourage a(n)

• contraction

• expansion

• peak

• trough

If a series of events results in a decrease in investments in U.S. businesses, what is the result on the U.S. economy?

• Contraction

• Expansion

• Peak

• Trough