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Consumer Economics Review Final Exam Sem 1 2018-19

Total questions: 125

Worksheet time: 1hrs 3mins

Name
Class
Date
1.

Your present self impacts your future self

a)

true

b)

false

2.

Which of the following activities will NOT improve your well being?

a)

Opening a savings account

b)

Going out for dinner with your sister

c)

Staying up all night to finish writing a paper

d)

Hanging out with your friends

3.

When setting financial goals and planning for the future, at what point should you stop planning?

a)

When your current financial goals have been met.

b)

When your money management plan has established your high well‐being.

c)

When you are 65 and ready to retire

d)

Never - financial planning is an ongoing process

4.

Laila would like to save $100 per month for six months so she can purchase a new phone. This is an example of what type of goal?

a)

short term

b)

long term

c)

mid term

d)

buying a new phone is not a goal

5.

When fully funded this will cover 6 months worth of expenses.

a)

financial plan

b)

umbrella policy

c)

emergency fund

d)

principal

6.

When taking advantage of the time value of money, which of the following is most likely to result in the largest return (profit from an investment)?

a)

Invest a large amount of money and then make no additional investments

b)

invest as much as possible as long as possible at the highest rate possible, starting when you're young.

c)

Invest a small amount of money for a short period of time at the highest interest rate possible

d)

Invest at a high interest rate because interest is the only factor that affects return

7.

Which of the following best explains compounding interest?

a)

The money he is paying the bank for his car loan

b)

Any form of interest earned from saving or investing

c)

Earning interest on the initial amount deposited plus interest already earned; repeating as long as the money is in the investment

d)

Interest earned on the principal investment

8.

When a goal has been set to save $100.00 a month for an emergency fund of $2000.00, giving up food from the vending machine or coffee every morning to achieve that goal is the:

a)

opportunity cost

b)

trade off

c)

interest

d)

hardest part

9.

Pay yourself first means

a)

spend on the fun stuff, then pay the bills

b)

pay the bills, then spend on fun stuff, then save some.

c)

put money in your savings first, then pay bills, then spend on fun stuff

10.

The most common relationship between risk and return in investing can be stated as:

a)

higher risk, higher return

b)

higher risk, lower return

c)

lower risk, higher return

d)

No relationship exists between risk and return

11.

Which of the following is NOT true in regards to investing in stock?

a)

A stockholder owns a part of a company.

b)

Stockholders pay different prices for the same stock

c)

A stockholder may or may not receive a dividend.

d)

A stockholder will always receive a profit when stock is sold

12.

It is best to have the rate of return on an investment __________ than the rate of inflation.

a)

Lower, in order to minimize taxes

b)

Lower, in order to minimize risks

c)

Higher, to maintain purchasing power

d)

Higher, to maximize risks

13.

Profits divided among stockholders is also called

a)

dividends

b)

interest

c)

a bonus

d)

volatility

14.

If you bought 1,000 stocks last yr at $21 and sold them this year for $29, you would have earned

a)

$8,000

b)

$2,100

c)

$2.900

d)

$5,000

15.

A person who handles the transfer of stocks between a buyer and a seller is known as a

a)

stockbroker

b)

banker

c)

lender

d)

financier

16.

In the Economics of Happiness, 4 circumstances were shown to make people unhappy; all except:

a)

high credit card debt

b)

long commutes to work

c)

high inflation

d)

driving a really old car

17.

Characteristics of people with high well being include all of the following except

a)

they are positive

b)

they love what they do

c)

they are in healthy relationships

d)

they get very little sleep because they are so busy studying

18.

Having positive relationships with family and friends contributes to which domain of well-being?

a)

social

b)

intellectual

c)

financial

d)

physical

19.

Which of the following contributes to high well being in the financial domain?

a)

wise money management and having an emergency fund set up

b)

feeling a sense of purpose

c)

getting enough sleep and exercise

d)

attending college

20.

After a person earns enough money to pay for living necessities, it is not so much the amount of money, but how a person chooses to manage the money, that increases well‐being.

a)

True

b)

False

21.

Managing money continuously throughout life is called

a)

spending

b)

saving

c)

preparing

d)

financial planning

22.

Experts say that you should have _____ months worth of expenses saved up in your emergency savings account.

a)

3

b)

6

c)

9

d)

12

23.

Anna is going to increase her savings so she can buy a new car before going to college by getting a second part time job. Which of the following is NOT a possible trade-off?

a)

her personal time

b)

being involved in school activities

c)

increasing income

d)

her sleep

24.

In it's simplest terms, compounding interest is

a)

a percentage rate

b)

risky

c)

interest earning interest

d)

a scam

25.

The time value of money concept is important to understand because your money today is worth ______________ the same amount in the future

a)

less than

b)

equal to

c)

more than

26.

People who invest in the stock market will automatically make money.

a)

True

b)

False

27.

A person who is 55 should take more risks when investing than someone who is 25.

a)

True

b)

False

28.

If a company fails, stockholders lose only the money they invested.

a)

True

b)

False

29.

The main reason companies "go public"or sell stock to investors is to raise money for expansion, research or development of products/services.

a)

True

b)

False

30.

You buy MCD stock at $96/share and sell them at $156 five yrs later, you made a good investment

a)

true

b)

false

c)

I need more information

31.

You buy MCD stock at $96/share and sell them for $156/share five yrs later, how much money did you gain per share?

a)

$60

b)

$252

c)

I need more information

32.
There are three questions that all economic systems answer.  Which of the following is NOT one of the basic economic questions?
a)
What goods and services are to be produced? 
b)
For whom should the goods and services be produced?
c)
How should goods and services be produced?
d)
When should goods and services be produced?
33.
Not having enough resources to satisfy every need or want is called 
a)
Capital 
b)
Resources 
c)
Wants 
d)
Scarcity 
34.
The economy of the USA 
a)
Communism 
b)
Capitalism 
c)
Socialism 
d)
Traditional 
35.
An economic system in which the government makes all decisions about what and how much is to be produced 
a)
mixed economy
b)
socialism 
c)
communism 
d)
capitalism
36.
The study of how people make decisions when they want so many things but can't have them all. 
a)
Economics 
b)
Linguistics 
c)
Psychology 
d)
Biology
37.

An example of a traditional economic system is:

a)

North Korea

b)

farmers in a third world country

c)

Brazil

d)

USA

38.
Which of the following are characteristics of capitalism? 
a)
Product popularity (demand) determines what businesses produce
b)
Producers choose how to make products based on the most economically sound decision.
c)
No one tells the consumer what to buy; no one tells the seller what to sell 
d)
All of the above.
39.
Freedom of choice allows you to do which of the following?
a)
enter the business you want to enter 
b)
earn a profit by competing in business 
c)
select the career you want most
d)
All of the above.
40.

The quantity of goods and services that customers are willing to buy at a specific price and a specific time is called

a)

inventory

b)

demand

c)

Supply

d)

exchange

41.
The quantity of goods and services that a business is willing to sell at a specific price and a specific time is called
a)
Supply 
b)
Inventory 
c)
Demand 
d)
Exchange 
42.
If the public expresses a strong desire (high demand) for a type of product (eg. Tickle-Me Elmo in the late 1990s), its price will tend to ____. 
a)
Increase 
b)
Decrease 
c)
remain the same
d)
Price is not affected
43.
Someone who creates and runs a business 
a)
Employee 
b)
Laborer 
c)
Entrepreneur 
d)
Employer
44.
The money, equipment and buildings that a business owns is part of which factor of production? 
a)
Natural Resources
b)
Human Resources
c)
Capital 
d)
Entrepreneurship 
45.
A person who works for a business, such as an engineer or cashier at Cub Foods, is part of which factor of production? 
a)
Natural Resources 
b)
Human Resources
c)
Capital 
d)
Entrepreneurship
46.
A person who takes risks and is willing to start a business to sell goods and/or services, is part of which factor of production?
a)
Natural Resources
b)
Human Resources 
c)
Capital 
d)
Entrepreneurship
47.
The raw materials that a business uses to produce its products, such as lumber, water and oil, is part of which factor of production?
a)
Natural Resources
b)
Human Resources 
c)
Capital 
d)
Entrepreneurship 
48.
An economic system that combines characteristics of a capitalist economy with those of a communist economy 
a)
Capitalism 
b)
Communism 
c)
Mixed (Socialism)
d)
Traditional
49.
In which type of economic system do suppliers and consumers control production and price of goods? 
a)
command (communism)
b)
market (capitalism)
c)
mixed (socialism)
d)
traditional
50.
An economic system is a method used by society to allocate goods and services among its people.
a)
True
b)
False
51.
In a command (communist) economy, the government controls 
a)
prices 
b)
ownership 
c)
property 
d)
all of the above 
52.
Today, most economies are really combinations of free-market and command economies, also known as ________ economies. 
a)
mixed
b)
market
c)
command
d)
traditional
53.
The free-market or free-enterprise economic system is also called ________. 
a)
communism
b)
capitalism
c)
socialism
d)
none of the above
54.
The demand for swim suits is likely to ________ during the summer. 
a)
fall
b)
rise
c)
stay the same
55.
The price of air conditioners is likely to ________ during the winter. 
a)
fall
b)
rise
c)
stay the same
56.
An Idaho farmer who has an extra-big harvest one year might have to raise the price of his potatoes to sell them all before they spoil. 
a)
True
b)
False
57.
If war breaks out in the Mideast and causes a gas shortage in the United States, the price of gas will rise. 
a)
True
b)
False
58.
There are three economic roles played by every individual.  The role you play when you vote or pay taxes is
a)
Consumer
b)
Worker
c)
Citizen
59.
There are three economic roles played by every individual. Your success as a _____ will be the most important factor in determining your standard of living
a)
Consumer
b)
Worker
c)
Citizen
60.
There are five basic rights that people who live in capitalist (free) societies, like the USA, have.  The right that allows individuals to buy what they want from the store they want is 
a)
Private Property
b)
Profits
c)
Competition
d)
Freedom of Choice
61.
There are five basic rights that people who live in capitalist (free) societies, like the USA, have.  The right that allows business owners to keep the money they earn from sales is
a)
Private Property
b)
Profits
c)
Competition
d)
Freedom of Choice
62.

Trading something for something else - no currency involved

a)

demand

b)

good

c)

barter

d)

market

63.

A person who buys goods and services

a)

consumer

b)

seller

c)

currency

d)

resource

64.

Another word for money

a)

currency

b)

barter

c)

economics

d)

price

65.

A general increase in prices

a)

price

b)

scarcity

c)

inflation

d)

demand

66.

The place where goods and services are exchanged

a)

barter

b)

currency

c)

resource

d)

market

67.

The amount of money we pay for a good or service

a)

currency

b)

price

c)

inflation

d)

economics

68.

When both the buyer and the seller have benefited from a trade and are happy with the transaction

a)

voluntary exchange

b)

supply

c)

demand

d)

equilibrium

69.

Why do markets create an incentive to produce high quality goods?

a)

if the product is bad (low quality) the seller won't be able to sell it

b)

if the product is bad (low quality) the seller will get a higher price for it

c)

there's no incentive; if the product is high quality, buyers won't be able to afford it

d)

there's no incentive since buyers have no choices

70.

In a free market, consumers cast a ______ every time they purchase an item

a)

price signal

b)

production clue

c)

dollar vote

d)

demand curve

71.

Which of the following is a true statement regarding supply, demand and prices?

a)

When supply is high and demand is high prices will fall

b)

When supply is high and demand is low prices will rise

c)

When supply is low and demand is high prices will rise

d)

When supply is low and demand is high prices will fall

72.

When prices are high, fewer people will purchase an item. When prices are low, more people will purchase an item.

This is called the

a)

Law of Demand

b)

Law of Supply

c)

Law of Equilibrium

d)

Voluntary exchange

73.

When prices are high, producers will produce more of an item. When prices are low, producers will produce less of an item.

This is called the

a)

Law of Demand

b)

Law of Supply

c)

Law of Equilibrium

d)

Voluntary Exchange

74.

When the price is high and supply is high, but there is low demand, this causes a

a)

shortage

b)

surplus

75.

When the price is low and there is low supply, but high demand for a product, this causes a

a)

shortage

b)

surplus

76.

For which of the following activities does the market approach not work when allocating resources?

a)

When you need a new car

b)

When you need an organ transplant

c)

When you need to buy a new pair of jeans

d)

When you need a drink from Starbucks

77.

To make your checkbook balance agree with the bank statement balance

a)

reconcile

b)

endorsement

c)

register

d)

statement

78.

A bank form listing your monthly deposits, checks and ending balance

a)

reconciliation

b)

statement

c)

register

d)

invoice

79.

Checks that have been paid and returned with your statement

a)

outstanding

b)

void

c)

cancelled

d)

open

80.

Word written across the face of the check if you make an error

a)

void

b)

cancelled

c)

reconciled

d)

incorrect

81.

Writing utensil used to write checks

a)

black pen

b)

green pen

c)

pencil

d)

crayon

82.

A personal record of checks written and deposits made

a)

register

b)

statement

c)

reconcilliation form

d)

invoice

83.

Checks that have not been deposited or cashed by the payee; checks the bank has not yet returned to you

a)

outstanding

b)

void

c)

cancelled

d)

closed

84.

Your cancelled checks should be

a)

kept in the bank

b)

kept in a safe place

c)

thrown in the trash

d)

recycled

85.

Your signature on the back of a check

a)

register

b)

reconciliation

c)

endorsement

d)

void

86.

A written order of payment

a)

invoice

b)

deposit slip

c)

statement

d)

check

87.

A plastic card that is electronically connected to your bank account:

a)

credit card

b)

gift card

c)

visa card

d)

debit card

88.

When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which statement best describes what this is likely to mean for Bryce?

a)

The interest rates on his loan will be lower, since his credit score is low.

b)

The interest rates on his loan will be higher, since his credit score is low.

c)

The monthly loan payments will be lower due to his lower credit score.

d)

The purchase price of the item he needs the loan for will be higher due to his low credit score.

89.

Which of the following is NOT included in an individual’s credit report?

a)

Current and past addresses

b)

Account balances

c)

Medical information

d)

Bankruptcies and foreclosures

90.

Edward wants to develop a positive credit history. How should he do this? Select all that apply.

a)

Pay all bills on time

b)

Have someone with good credit co-sign a loan

c)

Become an authorized user on his parents' credit card account

d)

Pay cash for the majority of purchases

91.

To answer an essay test question about the meaning of open‐end credit, Ryan should include which statement?

a)

Payments are equal and required to be paid on a regular basis.

b)

Credit is extended in advance so the borrower does not have to apply for credit each time credit is desired

c)

A down payment must be made before receiving a loan.

d)

Individuals are allowed to borrow an unlimited amount of money as long as they pay it back

92.

CJ is trying to explain the difference between open‐end and closed‐end credit to her roommate. Which statement should she include in her description of closed‐end credit?

a)

It is a continuous loan the borrower must repay with a revolving balance

b)

A credit card is the best example of close-end credit

c)

Credit limits vary depending on the loan balance.

d)

Equal payments are required on a regular basis until the loan is repaid.

93.

Paying the minimum payment on a credit card every month will:

a)

help the cardholder create a plan for paying off a credit card in a decent amount of time

b)

allow the cardholder to avoid paying any interest charges

c)

make the final amount paid substantially higher than the amount initially charged to the card

d)

pay a large percentage of the total balance owed every month

94.

Ashley plans to do some of her Christmas shopping online. What is a safety tip to follow when she is shopping online?

a)

use her debit card

b)

use her credit card

c)

Shred all sales receipts as soon as the item purchased has been received

d)

Black out the bank account numbers on the credit card bill before returning it with payment.

95.

What type of alternative credit is this?

A relatively small amount of money ($500 max) lent at a high interest rate on the agreement that it will be repaid when the borrower receives his/her next paycheck.

a)

payday loan

b)

pawn loan

c)

rent-to-own

d)

refund anticipation loan

96.

What type of alternative credit is this?

Borrower leases tangible items with the condition that the item will be owned by the renter if the term of rent is completed

a)

payday loan

b)

pawn loan

c)

rent-to-own

d)

refund anticipation loan

97.

What type of alternative credit is this?

Borrower gives the lender their automobile title or personal property in exchange for cash; borrower pays the lender back within a certain period of time or the lender keeps the item.

a)

payday loan

b)

pawn loan

c)

rent-to-own

d)

refund anticipation loan

98.

What type of alternative credit is this?

Lender gives borrower a loan based upon their anticipated tax refund

a)

payday loan

b)

pawn loan

c)

rent-to-own

d)

refund anticipation loan

99.

A prospective lender will review your creditworthiness using the 5 C’s of credit. What are lenders looking for in terms of "character"?

a)

What are your assets and net worth?

b)

What do you have of value that you pledge to the lender that they can repossess if you fail to honor the terms of the agreement?

c)

Can you repay the loan?

d)

Do you pay your bills on time?

100.

A prospective lender will review your creditworthiness using the 5 C’s of credit. What are lenders looking for in terms of "capacity"?

a)

What are your assets and net worth?

b)

What do you have of value that you pledge to the lender that they can repossess if you fail to honor the terms of the agreement?

c)

Can you repay the loan?

d)

Do you pay your bills on time?

101.

Your debt to income ratio should not exceed ___% excluding a mortgage.

a)

50

b)

10

c)

20

d)

35

102.

Which of the following are signs of a debt problem? Select all that apply.

a)

Having trouble paying even the minimum monthly balance

b)

Paying only the minimum balance each month.

c)

Lenders offer you low interest rates when applying for a loan.

d)

Missing loan payments or paying late.

103.

A person or organization who makes funds available for others to borrow

a)

credit collector

b)

lender

c)

consumer

d)

borrower

104.

A credit history is

a)

A record of a person’s use of their bank

b)

A numerical summary of your credit history that indicates your credit worthiness

c)

A record of the borrower’s past loans and credit‐related transactions

d)

A credit reporting agency

105.

A credit report is

a)

A record of a person’s use of credit

b)

A numerical summary of your credit history that indicates your credit worthiness

c)

A record of the borrower’s past loans and credit‐related transactions

d)

A credit reporting agency

106.

An automobile loan is an example of

a)

open-end credit

b)

closed-end credit

c)

shark loan

d)

revolving credit

107.

Businesses hired by lenders to pursue payments on debts not paid back according to contract terms

a)

Data furnishers

b)

Pawn shops

c)

Collection agencies

d)

Credit Reporting Agencies

108.

When the borrower fails to keep up with mortgage payments and the lender takes possession of the property

a)

bankruptcy

b)

collections

c)

foreclosure

d)

repossession

109.

Lenders report _____ information, whereas data furnishers report _____

a)

positive, negative

b)

only negative, all credit information

c)

all credit information, only negative

d)

negative, positive

110.

Which of the following is not true about a credit score?

a)

It is a numeric “grade” of a consumer’s financial reliability

b)

It reflects only some of the information in a credit report

c)

It ranges from 300 to 850

d)

It is a mathematical number created to help evaluate the risk with lending a consumer money

111.

There are five factors, each weighted differently, that make up your credit score. Which one is weighted the heaviest?

a)

payment history

b)

length of credit history

c)

new credit

d)

amount owed

112.

Credit is (select all that apply)

a)

useful for small purchases like fast food and candy bars

b)

an arrangement to receive cash, goods or services now and pay for them in the future

c)

Is based on trust in people’s ability and willingness to pay bills when due

d)

not a major force in our economy

113.

Of the following, which type of purchase would you typically NOT use credit?

a)

automobile

b)

house

c)

renovations

d)

fast food

114.

What type of tax?

Funds the Social Security and Medicare programs

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

115.

What type of tax?

The fee to license a car is this type of tax

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

116.

What type of tax?

A tax on earned and unearned income

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

117.

What type of tax?

The tax on airline tickets and gasoline

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

118.

What type of tax?

This tax is determined by a set percentage of earned income

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

119.

What type of tax?

A tax on purchased goods and services

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

120.

What type of tax?

The specific amount paid for this tax depends on many factors but increases as income increases

a)

payroll

b)

property

c)

income

d)

excise

e)

sales

121.

Taxes only provide benefits to a select group of people living in the United States.

a)

true

b)

false

122.

Taxes are one of the largest expenses for many people

a)

true

b)

false

123.

Money earned from working at your job

a)

unearned income

b)

earned income

c)

social security

d)

taxes

124.

Income received from sources other than employment such as child support or interest from a savings account

a)

unearned income

b)

earned income

c)

social security

d)

taxes

125.

A sum of money demanded by a government to support the government itself as well as specific facilities or services

a)

unearned income

b)

earned income

c)

social security

d)

taxes

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128 questions

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123 questions

ÔN CUỐI KÌ I (3) - Multiple Choice and True/False

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Worksheet

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