lesson 1 quiz: making decisions

The decision-making process starts with gathering information.

• True

• False

Procrastination is an example of an economic influence on decision-making.

• True

• False

Higher interest rates result in higher costs of borrowing money

• True

• False

Rising prices causing lower buying power is referred to as an inflation risk.

• True

• False

Interest earned on savings may be referred to as the “time value of money.”

• True

• False

The final step of the decision-making process is:

• evaluating the results

• gathering information

• identifying the problem

• selecting the best course of action

Changes in the buying power of the dollar are measured by:

• the unemployment rate

• the money supply

• the consumer price index

• interest rates

Consumer spending is likely to rise when:

• unemployment is high

• interest rates are low

• taxes rise

• people are putting more money into savings accounts

Investments that may be difficult to convert to cash quickly have a high ​ (a)   risk.

• liquidity
• inflation
• economic
• income

What a person gives up when making a decision is commonly called:

• the time value of money

• a personal risk

• an opportunity cost

• spontaneity