Economics Final Exam

Which factor is used to determine a person's credit worthiness?

• work ethic

• home location

• yearly income

• payment history

Based on the scenario, which statement BEST describes the two companies?

• Hi-Tech Computers is a partnership, and Digital World is a corporation.

• Hi-Tech Computers is a sole proprietorship, and Digital World is a corporation.

• Digital World is a partnership of investors, and Hi-Tech Computers is a family partnership.

• Digital World is a sole proprietorship of entrepreneurs, and Hi-Tech Computers is incorporated.

Opportunity cost means individuals

In the U.S. economy, a few firms dominate the wireless telephone provider industry. Which type of market structure does this represent?

• oligopoly

• monopoly

• pure competition

• monopolistic competition

If the Federal Reserve wanted to stimulate the U.S. economy and reduce unemployment, it would

• cause interest rates to decrease because low interest rates encourage business growth and expansion.

• cause interest rates to rise because high interest rates encourage business growth and expansion.

• increase the discount rate it charges banks, which would increase the money supply.

• increase consumer spending by reducing the money supply

If the U.S. government disagrees with a foreign country's politics and wants to prevent ALL trading with that country, the MOST effective action the U.S. government can take is to

• place high tariffs on all goods from that country.

• place an embargo on all goods from that country.

• enforce safety standards on all goods from that country.

• enforce a quota on all goods shipped from that country.

What is the MOST LIKELY result of an increase in the value of the U.S. dollar against the Chinese currency?

• U.S. workers in the United States would benefit.

• Chinese importers of U.S. goods would benefit.

• U.S. consumers of Chinese goods would benefit.

• Chinese consumers of Chinese goods would benefit.

Fifteen-year-old Calvin has inherited $3,000 from an aunt. He wants to invest in an option that has a very low risk but still increases the amount of money. He doesn't plan to access the money until he attends college in two years. Based on Calvin's requirements, in which option would he MOST LIKELY invest?

• precious metals

• corporate stocks

• a savings account

• a certificate of deposit

A bank charges 6% interest on personal loans and pays 3% interest on individual savings accounts. Why is there a difference in the two amounts of interest?

When Jason bought a car and went to register it with the state Department of Motor Vehicles, he needed to show proof of insurance. What kind of insurance did Jason need to have?

• disability insurance

• automobile insurance

• health insurance

• life insurance