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WorksheetsECONOMICS PF FINAL EXAM REVIEW
Total questions: 43
Worksheet time: 22mins
What is the reason for making economic choices?
Consumer wants are unlimited and resources are scarce.
Services are limited and quantities demanded are low.
Consumer wants are limited and resources are limited.
Services are unlimited and quantities demanded are unlimited.
Which factor is a major advantage of centrally planned economies compared with free enterprise economies?
more equitable distribution of goods
more extensive social welfare programs
slower rate of change in business cycles
greater variety in consumer choice
Which of the following is a true statement regarding mixed and market economies?
Government and consumers make economic decisions in a mixed economy, while consumers make economic decisions in a market economy.
Consumers make economic decisions in a mixed economy, while consumers and government make economic decisions in a market economy.
Government makes all economic decisions in a mixed economy, while consumers make all economic decisions in a market economy.
Consumers make all economic decisions in a mixed economy, while the government makes all economic decisions in a market economy.
What does the point of intersection shown on this graph represent?
elasticity
equilibrium
opportunity cost
marginal production
What type of policy is being implemented when the Federal Reserve adjusts interest rates to influence economic activity?
Fiscal Policy
Tax Policy
Monetary Policy
Trade Policy
Which option BEST matches a stage in the business cycle with a GDP trend?
stable GDP growth – RECESSION
increasing GDP growth – CONTRACTION
decreasing GDP growth – PEAK
accelerating GDP growth – EXPANSION
What is a key role of the Federal Reserve in the U.S. economy?
to regulate banks in order to control the money supply and interest rates
to regulate prices in order to protect consumers and limit inflation
to regulate the stock market in order to ensure transparency
to regulate the supply of money in order to control the federal budget
In which economic system does the government primarily regulate business and provide entitlements?
command economy
mixed economy
pure capitalist economy
traditional economy
Which scenario is an example of a monopoly?
A dry cleaner specializes in environmentally friendly cleaning methods.
A local water company is the sole provider of water for a small town.
A farmer produces green beans for sale at a farmers’ market.
A small number of cereal companies produce most of the cereal on the market.
Why does the U.S. government enforce antitrust laws?
to promote competition in the marketplace
to create incentives for research and development
to develop large-scale efficient industries
to ensure the development of public goods and services
How does this government office encourage entrepreneurship?
by ensuring the safety of new merchandise
by providing funding for innovative products
by protecting the rights of inventors
by regulating the distribution of information
Which of the following is the MAIN source of federal government revenue?
corporate tax
personal income tax
local sales tax
social security tax
How does protectionism affect trade?
by increasing the amount of exports allowed by a country in the international marketplace
by allowing for embargoes against countries that threaten other countries
by placing a tariff on imports so that more goods are sold in the country where they are made
by taxing exports so that more goods are sold in the country where they are made
If the U.S. government adds a tax (tariff) on steel from other countries, what will happen to the demand for U.S.-made steel?
Demand for U.S.-made steel will go up because imported steel will cost more.
Demand for U.S.-made steel will go down because imported steel will cost less.
Demand for U.S.-made steel will go down because its quality will be worse.
Demand for U.S.-made steel will go up because its quality will be better.
What happens to a country’s balance of trade when its exports exceed its imports?
The country achieves a favorable balance of trade.
The country achieves trade equilibrium.
The country achieves export equilibrium.
The country achieves an unfavorable balance of trade.
How can education influence a person’s career plans and goals?
Going straight into a job allows someone to skip over entry-level positions.
Obtaining an education reduces debt and makes it easier to pay bills.
Earning a degree or certification can lead to a person getting a job with a higher starting wage.
Going straight into a job helps a person to earn necessary certifications more quickly.
How does earning a bachelor’s degree impact a long-term financial plan?
It has no significant impact on financial planning or earning potential.
It reduces earning potential because of the time spent in school instead of working.
It guarantees no student debt, making it easier to save for the future.
It can lead to higher lifetime earnings compared to having only a high school diploma.
How does attending trade school instead of a 4 YEAR university impact long-term financial goals?
It creates less debt from tuition and the ability to enter the workforce sooner.
It leads to more hands-on training and more difficulty finding a job.
It creates more debt from tuition, and trade school takes longer to complete.
It leads to less hands-on training and less difficulty finding a job.
How can enlisting in the military potentially benefit a person’s financial future?
Enlistment provides grants and loans to help pay for community college or university tuition.
Enlistment provides a high-paying job upon discharge.
Enlistment provides monetary options in U.S. military bonds.
Enlistment provides, until retirement, the opportunity to earn a high school equivalency certificate.
What is the difference between gross and net pay?
Net pay is a salary and gross pay is from hourly wages.
Gross pay is before taxes are subtracted but net pay is after taxes are taken out.
Gross and net pay are basically the same things.
Gross pay is after taxes are subtracted but net pay is before taxes are taken out.
Why is it necessary to have a W-2 or 1099 form when preparing your tax return?
They show how much you have donated to charities.
They highlight job performance which can reduce your tax rate.
These forms report income which needs to be used to file taxes.
They include passwords for tax preparation software.
Fill in the blank To determine how much federal income tax your employer should withhold from your paychecks, you fill out a (BLANK) form when you start a new job.
1099
W-2
W-4
1040
What can possibly help reduce the amount of taxes that you owe when preparing your taxes?
Credits and deductions
Stock and savings interest
Sharing what you earned on a W-2 or 1099 form
Having stock dividends
Form 1040EZ and Form 1040 are:
Forms that individuals use to file income tax returns
Examples of tax refunds
Filed automatically by your employer
Payroll deductions
Which local tax rate is determined by assessing the value of land and buildings?
income tax
property tax
sales tax
use tax
On what does a typical household spend the largest percentage of its budget?
entertainment
food
housing
transportation
How does an individual’s credit history affect the ability to purchase a home?
A higher credit score makes it easier to obtain a mortgage and results in lower interest rates.
A lower credit score automatically disqualifies a person from obtaining a mortgage.
A higher credit score makes it more difficult to obtain a mortgage and leads to lower interest rates.
A lower credit score means that a person has a good credit report, which results in better interest rates.
In 2021, what is the fixed interest rate for a 15-year mortgage at ABC Bank?
3%
4%
5%
6%
Based on the text above, what is an advantage of putting money from a paycheck directly into a savings account?
It establishes a habit of setting money aside before being tempted to spend it all at once.
It establishes a routine of paying debts before they are reported to a collection agency.
It creates a habit of spending money on wants before fixed expenses.
It starts a habit of paying rent, mortgage, and living expenses before enjoying discretionary income.
Leasing a car may be a better option than buying a car if...
you have enough money for a large down payment.
you don't plan on having it for long and don't want to worry about regular maintenance.
you travel great distances regularly.
you want the extended warranty and maintenance because you plan on having the car for a while.
When buying a car, a shorter auto loan term means ____ total interest you'll pay and ____ monthly payments.
lower , higher
Higher , Higher
Higher , Lower
Lower , Lower
What happens when you only make the minimum payment on a credit card?
You are charged interest on the remaining balance
Your credit line is restored to its maximum amount
The amount you owe before insurance will cover the rest of the bill is called a (a) when filing an insurance claim.
The distribution of your property and the care of any minor children are set forth in which legal document?
an insurance policy
a will
power of attorney
a mortgage
A key difference between saving and investing is
Investing has a guaranteed return, savings does not
Saving is for emergencies and goals, investing is for long-term wealth
Your money is insured when investing, it is not in savings
Saving is for everyone, investing is for the wealthy
How is investing in stocks different from investing in bonds?
Stocks risk the loss of investors losing money, while bonds guarantee investors a return on their initial investment plus interest.
Stocks allow investors to invest in the entire company, while bonds allow investors to invest in the government agency.
Stocks ensure investors’ claims to their initial investment with interest, while bonds risk investors’ money if the bond does not mature.
Stocks provide investors the opportunity to invest over a long period of time, while bonds allow investors the opportunity to invest over a short period of time.
Diversification is important in investing because…
It ensures that you only make low-risk investments.
It helps you to balance your risk across different types of investments.
It helps you gain the highest rate of return despite any risks.
It increases your overall risk, which guarantees that you will make more money.
For long-term financial goals like paying for retirement, which of these options is most suitable for growing your money?
a checking account
a savings account or certificate of deposit
an IRA, Roth IRA, 401(k), or 403(b)
place 10% of each paycheck as cash into a jar to avoid taxes
Choosing a retirement account with the lowest risk based upon a fear of the investment losing value is an example of:
Overconfidence
Fear of Missing Out (FOMO)
Loss Aversion
Confirmation Bias
How does the FTC (Federal Trade Commission) help people with their financial security?
By making sure products are affordable for everyone.
By protecting people from scams and unfair business practices.
By checking consumer credit reports for fraud.
By solving arguments between businesses and consumers.
A bank customer receives the following email: "Your bank account has been compromised. We detected suspicious activity and need to verify your information immediately. Please either reply to this email with your full name, birth date, mother’s maiden name, and bank account number, or call us at the number below to verify your account and secure it." What can the bank customer do to protect his or her account?
Reply to the email with the requested personal information to resolve the issue.
Call the number provided in the email to confirm account details.
Ignore the email, contact the bank directly using a trusted phone number, and report the suspicious email.
Assume the email is legitimate and provide the information quickly to avoid account closure.
What is the most practical way to avoid identity theft?
Guard your personal information and monitor your bank statements and credit report.
Never use the internet for shopping, banking, or paying your taxes.
Pay for everything using a credit card, because the bank will alert you of any fraudulent activities.
Answer suspicious phone calls, texts, and emails by telling them to leave you alone.
Which of the following is NOT a phase in the business cycle?
Stead
Expansion
Peak
Trough
