Economics and Personal Finance Review

Derrick worked his entire life at a car manufacturing facility owned by Big Block Cars, Inc. He is now seventy-three years old and enjoying his retirement. His main source of income is the money he receives from 401(k) from his time at Big Block Cars.

How would an extended period of unexpected inflation affect Derrick?

• The taxes on his retirement would increase.

• The taxes on his retirement would decrease.

• It would reduce the value of his source of income

• It would increase the value of his source of income.

For most individuals, which of the following is MOST LIKELY to increase earnings over the long-term?

• . finding a second job

• working longer hours

• becoming an entrepreneur

• investing in skill development

On what would property tax revenue MOST LIKELY be spent in the United States?

• retirement benefits

• public schools

• Social Security

• the Armed Forces

Cameron owns a small business and is looking for a new bank to hold his business deposits. He also wants to take out a loan to purchase some necessary equipment and would prefer to get a loan from the bank that he deposits his money with. He expects to keep an average of $25,000 on deposit and will need a loan of $250,000. After doing some research, Cameron created a table of the average interest rates various banks offered on deposits and the average amount they charged on loans.

Which bank should Cameron patronize?

• Bank 1

• Bank 2

• Bank 3

• Bank 4

In which situation would the borrower likely benefit the most?

• Kiara takes out a five-year car loan with a fixed interest rate just before a long period of rapid inflation.

• Paige takes out a five-year car loan with a variable interest rate just before a long period of rapid inflation.

• Sondra takes out a five-year car loan with a fixed interest rate just before a long period of rapid deflation.

• Gina takes out a five-year car loan with a fixed interest rate just before a long period of rapid deflation.

Mateo is a pizza delivery driver and is paid by the hour. He was forced to take two weeks off of work due to a serious illness and cannot afford his rent. He owns his car, but has no other significant assets. Should he seek a loan from a payday loan company or a title pawn lender? Why?

• He should go to a payday loan company because he will have to put up his car as collateral and risk losing it at a title pawn lender.

• He should go to a payday loan company because such companies are owned by their members and usually offer inexpensive loans.

• He should go to a title pawn lender because payday loan companies generally charge more interest than other types of lenders.

• He should go to a title pawn lender because such companies offer many helpful services to customers including debit and credit cards.

Based on the data in the table, which of the following statements is the MOST reasonable?

• The more education one has, the higher the salary one can expect to earn.

• All jobs require the same type of human capital.

• People with higher levels of education work hard, and people with lower levels do not

• High levels of formal education are needed for all jobs.

Based on the information in the table, which career choice has the highest level of salary?

• Office Clerk

• Police Officer

• Attorney

• Art Director

Based on the information in the table, which career choice has the lowest level of education required?

• Office Clerk

• Police Officer

• Attorney

• Art Director

An automobile insurance policy is LEAST LIKELY to cover expenses arising from which of the following?

• theft

• collisions

• natural disasters

• routine maintenance