Summer Final Practice part 1 2025

What does this information indicate about investment following the period depicted?

• High returns in the economy is growing. Investors should expect lower returns
• Low returns the economy is in decline. Investors should expect low returns.
• Stock prices to decrease. Economy is in growing. Stocks should remain low.
• Stock prices to increase. Economy is declining. Stocks should decline.

A hurricane hits the southeastern United States. During that time, citizens have limited access to drinkable water and gasoline for their vehicles and generators. Without Government intervening, what happens to gasoline?

• citizens purchase gas substitutes
• demand for gasoline will decline
• temporary shortage will result in a price decrease
• price of gasoline will increase

If OPEC announces an oil embargo, what happens?

• gasoline prices rise and there is a surplus
• gasoline prices rise and there is a shortage
• gasoline prices decrease and there is a shortage
• gasoline prices decrease and there is a surplus.

Europe votes to raise tariffs on US Steel, what happens?

• they want to increase trade with the US
• they want to protect their own steel industry
• they want to lower the cost of steel in Europe
• they want to raise demand for steel in Europe

Miguel invests $5,000 in an account that is expected to issue a 2% rate of return. Based on the Rule of 72, what should Miguel expect from this investment?

• 36 years to double in value
• 72 years to double in value
• in 36 years the investment will decline
• in 72 years the investment will decline

When a population's wants and needs exceed the productive resources under the population's control what happens?

• shortage of goods and services
• falling prices of goods and services
• surpluses of goods and services
• falling demand of goods and services

Newspaper states "US Officials announce new subsidies for the agricultural industry" What is the intended effect on US agriculture?

• Intended to reduce the level of competition domestically.

• Intended to help farmers meet demand.

• Intended to increase profits by raising prices

• Intended to encourage imports to lower domestic costs

For market economy, which is correct?

• Free enterprise, opportunity to profit motivates businesses

• Government directs production in command economies not free enterprise

• Free enterprise systems have high competition, and you get higher prices

• Free enterprise investors should expect stock to decrease.

What advantage is there to investing in one mutual fund instead of one company's stock?

• Mutual funds signify ownership in a company.

• Diversifying investments can reduce risk of loss.

• Mutual funds provide dividends

• Diversifying investments increases short term returns.

Which year would the economy be the healthiest?

• 2008, with unemployment of 8%, and 1% inflation

• 2010, with 10% unemployment, and 5% inflation

• 2012, with 6% unemployment and 1% inflation

• 2014, balance between low unemployment and low inflation