TSA Test Prep Domain 2 (Part 1)

What role do financial services play in allocating resources for businesses operating in an economy?

• Facilitating international trade

• Providing loans and capital to businesses

• Regulating tax policies for businesses

• Promoting social welfare programs

How do financial services create liquidity for businesses operating in an economy?

• By offering insurance services

• By providing investment advice

• By enabling risk management strategies

• By offering banking services and credit facilities

What is the primary function of financial institutions in directing the flow of capital and investment in an economy?

• Offering insurance services to businesses

• Providing tax consultation for investors

• Facilitating the movement of funds between countries

• Connecting investors with investment opportunities

Which financial service helps businesses secure themselves against unforeseen events and financial uncertainties?

• Investment banking

• Asset management

• Insurance services

• Credit card processing

How do financial services contribute to economic growth?

• By promoting excessive risk-taking among businesses

• By allocating resources efficiently to businesses with growth potential

• By imposing strict regulations on businesses

• By encouraging innovation and supporting entrepreneurship

Which financial instrument allows businesses to manage risks associated with fluctuations in interest rates and foreign exchange rates?

• Mutual funds

• Derivatives

• Stocks

• Bonds

What is the role of financial services in job creation within an economy?

• Offering employment opportunities within financial institutions

• Facilitating access to international job markets

• Providing training programs for high-skilled professions

• Supporting businesses' expansion and growth, leading to job creation

How do financial services contribute to the development of industries and infrastructure in an economy?

• By promoting income inequality among businesses

• By imposing strict regulations on industrial activities

• By facilitating the efficient allocation of capital and investment

• By encouraging businesses to prioritize short-term profits over long-term growth

What is one of the following is NOT a benefit gained by shopping locally?

• Increased tax revenue for the local community

• Promotion of economic diversification

• Enhanced cultural expression

• Contribution to international trade

How do small businesses contribute to economic growth in a local economy?

• By reducing reliance on large corporations

• By fostering social cohesion

• By promoting globalized markets

• By encouraging international investment