EPF Unit 2 Test Review

How does inflation make the value of the dollar decrease?

• It increases purchasing power

• It changes the composition of the dollar, leading to changes in value

• It decreases purchasing power

• It changes the way money is printed, which can cost more for the government

How does the Consumer Price Index serve as an economic indicator?

• It shows the change in the GDP over calendar years

• It uses the blockchain to verify all economic transactions

• It shows the rate of decline in the business cycle

• It shows the rate of inflation or deflation of the price of goods over a period of time

How does cryptocurrency differ from fiat money?

• It is decentralized and is not controlled by any person, government, or corporation

• It is centralized and is controlled by the Federal Reserve

• It is only physical and cannot be used digitally

• It is a measure of inflation as the value of cryptocurrency fluctuates

If you draw on retirement savings before age ________, you will be penalized by the government.

• 65

• 60

• 62 ½

• 72

• 59 ½

What is the purpose of social security?

• To provide investment opportunities for people prior to retirement

• To change social policies within the government towards banking

• To provide monthly income for those that are retired from working

• To change the retirement age to 70 instead of 65

What is the difference between a 401(k) and an IRA?

• An IRA is only for those 40 and older, while a 401(k) is for anyone

• A 401(k) is an employer-sponsored retirement account, while an IRA is not

• An IRA is only for those employed full-time, while a 401(k) is for part-time

• A 401(k) grows in value based on the value of decentralized currency, while an IRA is based on fiat money

How does secured credit differ from unsecured credit?

• Secured credit is guaranteed by a form of collateral, while unsecured is not guaranteed

• Unsecured credit is a home or auto loan that have a physical item attached, while secured credit is only revolving money

• Secured credit is not guaranteed by any collateral, while unsecured is guaranteed by collateral

• Secured credit changes its limits according your credit score, while unsecured has hard limits

What is the most critical part of your credit score?

• Length of credit history

• Number of accounts

• Credit card usage

• Payment history

Why does money have value in our society today?

• Because it is backed by gold

• Because it is a universally accepted medium of exchange

• Because it is made of valuable materials

• Because it is issued by the government

The Bitcoin mining process involves:

• Solving complex mathematical problems

• Printing new bitcoins

• Exchanging bitcoins for cash

• Using a credit card