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WorksheetsEconomics & Personal Finance FINAL
Total questions: 125
Worksheet time: 1hrs 29mins
What term refers to the principle that society has limited resources and therefore cannot produce all the goods & services people wish to have?
inefficiency
inequality
scarcity
market failure
Economics is the study of how society manages its
limited wants and unlimited resources
unlimited wants and unlimited resources
limited wants and limited resources
unlimited wants and limited resources
In economics, the term "physical capital" refers to...
the finances necessary for firms to produce their products
buildings and machines used in the production process
the money households use to purchase firms' output
stocks and bonds
Which of the following is NOT a factor of production?
Land
Labor
Human Capital
Money
Which of the following is "human capital" necessary for producing a new video game?
Slaves
Knowledge regarding programming languages
Hammers & Screw Drivers
Carrots
Which of the following is an example of "land" necessary to produce "steel."
Iron Ore
How should I know where they produce steel?
The Pittsburgh Steelers
Factories
Today, the United States uses an economic system in which individuals make decisions about the "private property" they own, including the use of "money" as a medium for exchanging property. Based on this information, we can conclude that today the U.S. has a...
Traditional Economy
Market Economy
Command Economy
What type of economy involves a powerful government which owns all the "means of production" and makes all decisions regarding society's resources.
Traditional Economy
Market Economy
Command Economy
What is labor?
Hard Work
People who only do the physical work.
People who do the work to produce something.
None of the above.
What is entrepreneurship?
Shipping of products and services.
Starting or improving a business.
Improving needs and wants.
All of the above.
Which one of the four factors of production does the picture show?
Labor
Natural Resources
Capital
Entrepreneur
The production possibility curve shows
alternative combinations of two goods that an economy is capable of producing.
the actual levels of production of two goods that the economy is achieving.
alternative combinations of productive resources that can be used to produce two goods.
the total value of two goods produced in one time period.
Because of scarcity, people are forced to make _________ about how to use resources.
Choices
Opportunities
Houses
Desires
Which of the following is a negative incentive?
increase wages will increase hours
makes people better called "rewards"
lower interest rates
decrease wages - less incentive to work
If one follows the PACED decision making model to choose the good or service that grants them greater benefit than cost. They have made a
Good decision
Irrational decision
Dumb decision
Rational decision
Marginal analysis involves
Looking at the cost of an alternative
Looking at the benefits of an alternative
Evaluating the cost of an alternative
Comparing the benefits and costs of producing and consuming additional units of something.
When two people engage in trade, both sides will benefit if the trade meets which two requirements?
voluntary and non-fraudulent
non-voluntary and fraudulent
free and international
rational and marginal
What is the relationship between specialization and voluntary exchange?
voluntary exchange causes specialization
specialization exists because of voluntary exchanges
voluntary exchange negates the need for specialization
specialization leads to a need for voluntary exchange
What are TWO examples of ECONOMIC FREEDOM?
Guard against inflation
Businesses are free to choose who they want to hire
Individuals are free to choose their own occupations
Equal pay for equal work
What is ONE example of ECONOMIC EFFICIENCY?
Minimum wage
Equal pay for equal work
We determine the best use for our scarce resources
Protection from layoff and illness
What are TWO examples of ECONOMIC EQUITY?
Equal pay for equal work
Enables more people to work
Minimum wage
Protection from layoff and illness
What are TWO examples of ECONOMIC SECURITY?
Protection from layoff and illness
Equal pay for equal work
Individuals are free to choose their own occupations
Social Security
What is ONE example of PRICE STABILITY?
Equal pay for equal work
Minimum wage
Social Security
Guard against inflation
What are TWO examples of ECONOMIC GROWTH?
Growth is necessary to meet all needs
Enables more people to work
Guard against inflation
Businesses are free to choose who they want to hire
What does point A represent on the Circular flow diagram?
Households
Businesses
Factor Market
Product Market
Where are factors of production (land, labor, etc) exchanged in the circular flow model?
Factor Market
Product Market
Firms
Individuals
Where do factors of production (land, labor, etc) come from in the circular flow model?
Factor Market
Product Market
Firms
Individuals
In the circular flow diagram firms pay wages for which factor of production?
Land
Labor
Entrepreneurship
Raw materials
A firm that is owned by two or more individuals, where profits are split
sole proprietorship
partnership
franchise
corporation
A business organization that is owned and managed by one individual is called a(n)
sole proprietorship
franshise
corporation
partnership
What is a major advantage of a business that is a partnership rather than a sole proprietorship?
The responsibility for the business is shared
The partners are not responsible for business debts
The business is easy to set up
The business is easy to sell
This market structure is characterized by the lowest level of competition among producers.
monopolistic competition
monopoly
oligopoly
perfect competition
All of the following are characteristics of monopolistic competition except ___.
There are many buyers and many sellers.
The products sold are similar but differentiated.
A market leader may emerge from among the many suppliers.
There are many barriers to entry and exit.
An industry or market that is dominated by a few firms is
a Monopoly
an Oligopoly
a Competitive market
What is monopolistic competition?
one company selling the identical product under different names
one company selling several different products under different names
a very few companies selling identical products
many companies selling similar but not identical products
MARKET STRUCTURE IN WHICH A LARGE NUMBER OF FIRMS PRODUCE THE SAME PRODUCT
OLIGOPOLY
MONOPOLY
PERFECT COMPETITION
MONOPOLISTIC COMPETITION
The Law of Supply says that as the price of a good increases then...
more of that good will be produced
less of that good will be produced
more of that good will be demanded
less of that good will be demanded
A decrease in supply is demonstrated by which of the following?
What are two things that can cause demand to shift?
number of producers
government action
taste and preferences
number of buyers
price of resources
What are two things that can cause supply to shift?
number of producers
price of related goods
taste and preferences
number of buyers
technology
rise in all goods purchased
decrease in prices
when prices stagnate
rise in general prices
What is GDP?
Gross Domestic Product
Get Duties Prior
Gross Department Power
Gross Duties Peer
What does GDP measure?
The annual dollar value of all foreign products purchased by one country
All the products made in the country
the dollar value of all final goods and services produced within a country in one year.
How fast Dominic Toretto cars are
Macroeconomics is?
is the study of the local economy as a whole. It is the study of the big picture
is the study of the large economy as a whole. It is the study of the big picture
is the study of the study economy as a study whole. It is the study of the big picture study
is the study of the global economy as a whole. It is the study of the big picture
The three macroeconomic goals are?
Promote Economic Growth
Limit employment
Keep Prices Stable (Limit Inflation)
Promote Economic Growth
Full Employment
Keep Prices Stable (Limit Inflation)
Promote Government Growth
Limit Unemployment
Keep Prices UnStable (Limit Inflation)
Gross Domestic Product is a method for calculating how much a country produces by adding which four spending categories?
Consumption, Investment, Government, Net Exports
Consumption, Investment, Government, Business expenditures
Consumption, Interest Rates, Government, Net Exports
Wages, Rent, Interest, Profit
Which of the following would not be included in the calculation of a nation’s GDP?
money spent on hair cuts at a hair salon
soda sales at a restaurant
the sale of a newly produced good, like a new car
the sale of a previously owned good, like a used car
Whose spending is included in GDP?
consumers
businesses
government
all of the above
What type of unemployment is due to a business shutting down for a part of a year?
Frictional
Structural
Seasonal
Cyclical
What type of unemployment occurs when advanced technology takes your job?
Frictional
Structural
Seasonal
Cyclical
What type of unemployment occurs during a transition period from one job to another job?
Frictional
Structural
Seasonal
Cyclical
What type of unemployment occurs when there is a decline in business activity resulting in layoffs?
Frictional
Structural
Seasonal
Cyclical
Which of the following best defines unemployment?
The state of being able to work and actively seeking work, but unable to find employment
The state of being able to work, but choosing not to
The percentage of the labour force that is able and actively seeking work, but cannot find employment
The total number of people who do not work
Most countries try to maintain an inflation rate of ______ per year.
1%
2%
3%
4%
What is the formula for the unemployment rate?
(labor force/unemployed)*100% = unemployment rate
(unemployed/labor force)*100% = unemployment rate
(GDP*labor force)/100% = unemployment rate
(unemployed)/( labor force) = unemployment rate
The Business Cycle measures ___ over time.
wealth
inflation
economic growth
A trend line will show-
an increase in Real GDP over time.
only economic recessions.
only economic expansions.
Which of the following is a recession, or contraction?
A
B
C
D
Which of the following is a peak?
A
B
C
D
Which of the following is an expansion, or recovery?
A
B
C
D
If a news headline says, "Finally!!! 2 straight months of increased jobs."
Where on the business cycle is the current economy?
Peak
Contraction/Recession
Trough
Expansion/Growth/Recovery
The Business Cycle charts...
the ups and downs of an economy
series of stages in the economy as it expands and contracts.
the periodic growth and decline of a nation’s economy, measured mainly by its GDP (Gross Domestic Product).
All of the above
Who is in charge of Monetary Policy
The Government
The Federal Reserve System
The states
The Department of the Treasury
Monetary Policy is the Federal Reserve Systems attempt to...
control the amount of money in circulation
control the Federal Government's debt
control state governments' spending
none of these answers are correct.
An expansionary policy means that the Fed is attempting to
increase the size of the nation's money supply
decrease the size of the nation's money supply
A contractionary policy means that the Fed is attempting to
increase the size of the nation's money supply
decrease the size of the nation's money supply
Which policy would help fight unemployment?
Expansionary
Contractionary
During a recession, the Fed should use...
an expansionary policy
a contractionary policy
Fiscal Policy is controlled by...
The Government
The Federal Reserve System
The states
The Department of Commerce
The two "tools" of Fiscal Policy are:
government taxes
government spending
the power to borrow money
the power to print money
The national debt is equal to which of the following?
The value of all government bonds held by the nation’s central bank
The value of all loans in the nation’s banking system
The current government budget deficit
The sum of all past government budget deficits and surpluses
The interest payments on the previous year’s government debt
A deficit is
when the government spends more than it collects in taxes and borrows to cover the difference.
the sum of all of the money owed by the government.
a very, very, very bad thing to have in government
okay to have.
The producer that can produce the most output OR requires the least amount of inputs (resources)
Comparative Advantage
Trade Offs
Absolute Advantage
Opportunity Cost
The producer with the lowest opportunity cost.
Comparative Advantage
Trade Off
Absolute Advantage
Opportunity Cost
Sally is not feeling well so her mother takes her to the doctor. The doctor tells her she has strep throat, gives her medication, and sends her home to recover. What types of insurance would be used in this case?
Health
Liability
Disability
Unemployment
Joey's father is in a car accident and cannot work. What type of insurance replaces his father's earnings?
Health
Life
Disability
Property and Liability
David's mother is killed in an automobile accident. What type of insurance would provide his family financial support to cover the paid and unpaid work his mother performed?
Life
Health
Disability
Worker's Compensation
The money paid to an insurance company to purchase a policy
deductible
insurance
premium
policy
The amount paid out of pocket by the policy holder for the initial portion of a loss before the insurance coverage begins.
Premium
Insurance
Deductible
Policy Holder
Risk
You buy this policy with a specified time period, usually one, five, or ten years.
Term Insurance
Whole Life Insurance
With this insurance policy the costs are spread out over your entire life.
Term Insurance
Whole Life Insurance
Money or other substance generally accepted as payment for goods and services.
Measure of value
Medium of exchange
Scarcity
Store of Value
A saving account in a bank represents the function of money:
Store of value
A medium of exchange
A standard for deferred payments
A measure of value
What function of money the picture represents?
Unit of Account
Store of Value
Durable
Medium of Exchange
At the grocery store last week, you purchased $94.25 worth of groceries. You paid for the groceries in cash. What is the primary function of money exhibited here?
Store of Value
Unit of Account
Acceptable
Medium of Exchange
Banks earn profit when they _______
print additional currency to loan
Charge borrowers less interest
charge depositors more interest
charge borrowers more interest from lending money
Which investment is the most risky?
bond
stock
mutual fund
savings account
Which type of investment is the least risky?
stock
bond
mutual fund
savings account
A savings plan operated by a state or educational institution designed to help families set aside funds for future college cost:
529 Plan
Guaranteed Investment Contract
401K's are sponsored by who?
The Government
The Employer
The Employee
The State you live in.
John throws all of the copies of his bills and credit card statements in the trash. He receives a call from his credit card company asking him if he has been to Cancun recently and purchased a large amount of diving equipment. John has never traveled outside of the United States. Which term describes how a thief got John’s credit card information?
Hacking
Phishing
Pretexting
Dumpster Diving
What is principal?
The fee that is paid to borrow money
The rate lenders charge borrowers for money.
original amount of the loan (no interest)
The paying off of a debt with a fixed repayment schedule in regular installments over a period of time.
Paying for a jacket with a credit card is considered what type of credit?
installment
revolving
single-payment
Monthly student loan payment
Installment
Revolving
Single Payment
Collateral
This is declared when an individual is unable to pay private or business debts.
Broke
Bankruptcy
Insolvency
Liquidation
This federal credit law requires disclosures of key loan terms such as rates, due dates, etc.
Fair credit billing act
Truth in Lending Act
Fair Debt Collection Practices
Equal Credit Opportunity Act
Debt that is borrowed in lump sum upfront then repaid in predictable increments.
revolving
installment
variable
fixed
Debt whose balance can grow and shrink based on purchases and payments the borrower makes.
revolving
installment
secured
unsecured
The schedule prepared showing the installment payments for the period (called the term of the loan) is called___________.
Amortization Table
Payment Method Table
Installment Payment Table
Mortgages Table
Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to…
Decrease your interest rate
Increase your term
Increase your total payments
Decrease your principal
Earnings paid to an employee based on an hourly rate.
Commission
Salary
Wages
Deductions
An employee's fixed agreed yearly income.
Commission
Salary
Wages
Deductions
Someone who is not bothered by risk, enjoys researching business performance, and is comfortable with making frequent decisions is most well suited to pursue which stream of income?
Interest
Capital Gains
Rental
Royalties
Your parents pay $3500 in taxes each year based off of the value of your home. Which type of tax is this?
Payroll tax
Property tax
Sales tax
Income tax
A tax for which the percentage of income paid in taxes remains the same at all income levels
Tax
Revenue
Progressive tax
Proportional Tax
Regressive Tax
A tax for which the percentage of income paid in taxes decreases as income increases
Tax
Revenue
Progressive tax
Proportional Tax
Regressive Tax
Net Pay is...
pay you get after deductions
pay you get before deductions
gross pay
regular pay + overtime pay
Gross income is:
the total amount of money you earn
the amount of money you receive after decuctions are subtracted
the total amount of money you spend
sales taxes on items you buy
