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Worksheets2024 Fall BMF2 Exam Review
Total questions: 68
Worksheet time: 34mins
What is a true statement about how specialization increases productivity in a nation?
If a nation has an absolute advantage for producing a specific product, it should produce that product.
It allows a nation to allocate its resources more efficiently.
We can also call a trade surplus a(n)
Elastic Balance of Trade
Positive Balance of Trade
Flat Balance of Trade
Negative Balance of Trade
It was founded in 1995 to ensure compliance with GATT to negotiate trade agreements and to resolve trade disputes.
NAFTA
EU
WTO
ASEAN
These are determined by the supply and demand for a certain currency.
Exchange Rates
Tariffs
Trade Rates
Currency Type
This is an argument FOR protectionism.
Nations that trade together are less likely to go to war with each other.
Cheaper imported goods are available for consumers.
Jobs go overseas in favor of cheaper labor.
It enables greater specialization within nations.
Which of these is NOT a trade bloc?
ASEAN
WTO
NAFTA
EU
A good sent to another country for sale is called what?
Tariff
Quota
Import
Export
How some countries avoid the negative market effects of having a strong currency.
Protectionism
Free Trade
Floating Exchange Rates
Currency Manipulation
What happens if Canada’s currency appreciates?
Canada’s exports become more expensive.
Canada’s imports become more expensive.
All nations will stop trading with Canada.
Canada will lose its position in NAFTA.
Nation A imports $500 and exports $300. Nation B imports $250 and exports $275. What is a true statement about nations A and B?
Nation A has a trade surplus and Nation B has a trade deficit.
Nation A has a trade deficit and Nation B has a trade surplus.
Both nations have a trade deficit.
Both nations have a trade surplus.
An exchange rate is used to determine
the price of one nation’s currency against the price of another nation’s currency.
whether a nation has a trade surplus or a trade deficit.
whether free trade or protectionism is a better option for a nation.
opportunity costs of specialization.
We would consider an exchange rate that is pegged to the US dollar to be
floating.
backed by the gold standard.
fixed.
depreciated.
If the Mexican peso appreciates against the Chinese yuan, who will benefit?
Chinese importers
Mexican importers
Mexican exporters
Nobody benefits
This is an argument FOR free trade.
Jobs go overseas in favor of cheaper labor.
It causes stagnant wages at home.
Cheaper consumer goods are available.
Nations become less self-sufficient.
Who has the absolute advantage for books?
Fantasia
Mid-World
Who has the absolute advantage for scrolls?
Fantasia
Mid-World
Who has the comparative advantage for books?
Fantasia
Mid-World
Who has the comparative advantage for scrolls?
Fantasia
Mid-World
Who should import books?
Fantasia
Mid-World
Who should import scrolls?
Fantasia
Mid-World
The leader of Venezuela has refused to give up his position even though he lost the election. The EU has stopped trading with Venezuela until the election results are upheld. What type of barrier is it?
Tariff
Quota
Standard
Subsidy
Embargo
The US stopped imports of Canadian beef amid reports of Mad Cow Disease. What type of barrier is it?
Tariff
Quota
Standard
Subsidy
Embargo
In order to make their dairy farmers competitive with the rest of the world, the US government offers payments to dairy farmers. What type of barrier is it?
Tariff
Quota
Standard
Subsidy
Embargo
China allows only a certain number of textiles to be imported from Mexico each year. What type of barrier is it?
Tariff
Quota
Standard
Subsidy
Embargo
When evaluating alternatives in the PACED model, what is the main purpose of using criteria?
To pick a random option
To measure each alternative against specific needs and preferences
To eliminate every option but one
To choose the product everyone else is buying
What is the main advantage of a fixed-rate mortgage?
The interest rate adjusts over time.
The interest rate and monthly payments remain constant
You pay less in the early years.
The interest rate is lower than an ARM.
Which of the following is true about a debit card?
It allows you to borrow money from your bank
It withdraws money directly from your checking account
It earns rewards for purchases
It affects your credit score
John has an ARM with an initial interest rate of 3.5% for the first five years. What might happen after the five-year period?
His interest rate and monthly payment will stay the same.
His interest rate could increase or decrease based on market rates.
His loan will be paid off automatically.
He will need to refinance the loan.
What is the purpose of overdraft protection?
To increase your credit limit
To prevent your account from being overdrawn by automatically covering shortfalls
To help build your credit score
To avoid ATM fees
How can making extra payments on a mortgage save you money?
It lowers your interest rate.
It reduces the principal balance, decreasing total interest paid.
It extends the term of the loan.
It increases your credit score.
Why is it important to pay your credit card balance in full each month?
To increase your credit limit
To avoid interest charges and improve your credit score
To earn more rewards points
To reduce your bank fees.
Emily is choosing between two credit cards. One has a 0% interest rate for the first 12 months but a 20% APR after that. The other has a 15% fixed APR with no introductory offer. She plans to carry a balance. Which card should she choose to minimize interest payments?
The card with a 0% interest rate for the first 12 months
The card with a 15% fixed APR
How does a high credit score affect your interest rates on loans?
It leads to higher interest rates.
It has no effect on interest rates.
It leads to lower interest rates.
It results in longer loan terms.
What does “amortization” refer to?
Increasing the amount of interest charged on a loan.
Gradually paying off a loan through regular payments.
A penalty for early repayment of a loan.
Refinancing a loan to reduce monthly payments.
Which of the following is a key disadvantage of a payday loan?
Low fees and short repayment periods.
High interest rates and fees, leading to potential debt cycles.
They are available only to people with high credit scores.
They offer long repayment terms and low interest.
Which of the following is a drawback of using a credit card for cash advances?
There are no fees for withdrawing cash.
Interest begins accruing immediately, often at a higher rate than purchases.
You earn rewards on the amount of cash advance.
It improves your credit score.
How does refinancing a mortgage typically benefit borrowers?
It increases the interest rate on the loan.
It allows them to replace their loan with one that has better terms.
It shortens the term of the loan.
It forgives the remaining balance on the loan.
Mark has an auto loan with a 5% interest rate for 5 years. After 3 years, he receives a bonus and decides to pay off the loan early. What will likely happen?
His monthly payments will increase.
He will save on interest costs.
His interest rate will increase.
He will incur a prepayment penalty.
Jordan is buying a home with a 30-year mortgage and a 5% interest rate. His monthly payment is $1,500. How much of his payment goes toward interest in the early years?
Most of the payment goes toward the principal.
Most of the payment goes toward interest.
What is the main advantage of a debit card over a credit card?
Debit cards allow you to build credit.
Debit cards withdraw money directly from your account, preventing debt.
Debit cards charge lower interest rates.
Debit cards offer rewards like credit cards.
What is the first step in the PACED decision-making model when buying a product?
Purchase the product
Define the problem or need
Compare prices
Choose the most expensive option
Which of the following factors is most likely to lower your monthly mortgage payment?
Shortening the loan term
Increasing the down payment
Selecting a higher interest rate
Paying off the loan early
Tina is deciding whether to refinance her 30-year fixed-rate mortgage to a 15-year term at a lower interest rate. What is a potential benefit of refinancing to a shorter term?
She will pay less interest over the life of the loan.
Her monthly payments will decrease significantly.
She will have to pay less each month.
She won’t need to make a down payment.
What is a key disadvantage of an adjustable-rate mortgage (ARM)?
The interest rate is fixed throughout the loan term.
Monthly payments may increase if the interest rate adjusts higher.
It requires a larger down payment than a fixed-rate mortgage.
It offers no flexibility in payment terms.
Anna is deciding whether to lease or buy a new car. She drives about 10,000 miles per year and likes upgrading to a new model every few years. Based on this, which option might be best for her?
Lease the car
Buy the car with a 5-year loan
Take out a personal loan
Avoid using credit
Malik wants to open a bank account where he can easily access his money for daily expenses, pay bills, and make purchases with a debit card. However, he also wants to save for an emergency fund that earns interest. Which combination of bank accounts should he choose?
Checking account for daily expenses and Certificate of Deposit (CD) for emergency fund.
Money market accounts for both expenses and savings.
Checking account for daily expenses and savings account for emergency fund.
Savings account for both expenses and savings.
Which loan is most commonly used to buy a house?
Personal loan
Auto loan
Mortgage
Payday loan
How does a fixed-rate mortgage differ from an adjustable-rate mortgage?
The interest rate changes with market conditions in a fixed-rate mortgage.
The interest rate remains the same in a fixed-rate mortgage but can change in an ARM.
The fixed-rate mortgage has higher interest rate fluctuations than an ARM.
The fixed-rate mortgage requires refinancing every five years.
Sarah has an auto loan with a fixed 4% interest rate. She is considering refinancing to a 3.5% rate but is concerned about the loan term. What should she consider?
Whether the new loan term is longer, increasing total interest paid
Whether the new loan will have higher payments
Whether the interest rate will fluctuate
Whether her down payment will increase
What happens when you refinance a mortgage?
You receive a new loan with different terms to replace the original loan
Your loan is forgiven
Your monthly payments automatically increase
You are penalized for prepayment
How does a higher credit score affect loans?
It results in higher interest rates
It decreases loan approval chances
It leads to lower interest rates
It shortens loan terms
Gemma is trying to reduce her monthly mortgage payment. What could help her achieve this?
Refinance to lengthen the loan term
Increase the loan amount
Pay more each month
Decrease the down payment
What is the impact of making extra payments on a loan?
It extends the loan term
It increases the interest rate
It reduces the principal balance and total interest paid
It decreases the down payment
Emile has just moved to a new city for a job. He’s unsure how long he’ll stay, and although he has savings, he’s not ready to commit to buying a home. He prefers flexibility in case he decides to move again soon. What would likely be the best option for him?
Buying a home to invest in property.
Renting an apartment to maintain flexibility and avoid long-term commitment.
How does a payday loan typically work?
Short-term loan with low interest rates
High-interest loan that must be repaid by your next paycheck
No fees or penalties for missed payments
Long-term loan with adjustable rates
What does a fixed-rate mortgage provide?
A changing interest rate over the loan term
A stable interest rate and payment amount
A short-term loan with no down payment
No requirement for a credit check
How does a longer loan term affect monthly payments and total interest?
Increases both monthly payments and total interest
Lowers monthly payments but increases total interest
Lowers both monthly payments and total interest
Has no impact on either
Maria has a fixed-rate mortgage and wants to refinance to a lower interest rate. What is one benefit of refinancing?
It can lower her monthly payments
It will increase her loan term
It will raise her interest rate
It will automatically lower her credit score
Which of the following is the correct order of the PACED decision-making steps?
Problem, Alternatives, Criteria, Evaluate, Decide
Purchase, Analyze, Choose, Eliminate, Decide
Plan, Alternatives, Compare, Estimate, Decide
Problem, Analyze, Criteria, Execute, Decide
What is the primary purpose of HR policies in an organization?
To regulate employee behavior
To establish clear guidelines for operations and employee relations
To reduce company costs
To eliminate the need for HR managers
Which of the following is NOT typically included in an employee handbook?
Company mission statement
Stock market trends
Code of conduct
Disciplinary procedures
What is the primary function of an employee handbook?
To serve as a legal contract between employees and employers
To provide guidelines for behavior, policies, and expectations
To determine employee salaries
To dictate company profits
Which of the following would most likely be included in an employment policy on diversity?
Methods for resolving conflicts
Guidelines to ensure equitable hiring practices
Procedures for overtime pay
Protocols for workplace safety
Employment policies are designed to:
Increase employee turnover
Establish consistency and fairness in treatment
Replace HR managers entirely
Focus exclusively on financial management
What is the primary goal of employee relations?
Increasing workplace diversity
Promoting productive and harmonious workplace interactions
Which strategy is most effective for reducing employee turnover?
Strict enforcement of policies
Offering competitive compensation and benefits
Limiting professional development opportunities
Avoiding feedback discussions
A company wants to improve its employee relations. Which action would best support this goal?
Implementing transparent communication channels
Increasing work hours without additional pay
Reducing training opportunities
Enforcing stricter disciplinary procedures
What is a common outcome of effective employee relations?
Higher employee engagement and productivity
Increased workplace conflicts
Decreased teamwork and collaboration
Lower employee retention rates
