WorksheetsEconomics Midterm Review
Total questions: 33
Worksheet time: 19mins
What is one benefit of starting to invest money at a young age?
Interest compounds over time.
Accounts pay immediate returns.
Early investing reduces investment risk.
Investing early guarantees higher interest rates.
Why is investing in the stock market a good strategy for a young worker saving for
retirement?
Stocks are low-risk and provide a steady return.
Stocks are guaranteed to consistently outperform bonds.
Stocks are easier to access than money saved in certificates of deposit.
Stocks provide a good return on investment in the long term despite the short-term
risks.
Which type of scam or scheme has he been the victim of?
Ponzi scheme
Phishing scam
Check cashing scam
Pyramid scheme
What is Mark’s best course of action?
Refinancing the car loan with another lender
Contacting the local police to report the lender's actions
Filing a report to the Federal Deposit Insurance Corporation
Reporting the incident to the Consumer Financial Protection Bureau
Why are saving and investing important parts of a financial plan?
They provide an individual a way to avoid acquiring an expensive loan.
They help an individual reduce interest rates on loans.
They help an individual avoid paying income taxes.
They allow an individual to accumulate resources to achieve long-term goals.
Which type of Income is tied to Employment
Interest
Wages
Capital Gains
Which type of Income is tied to Sales of Stock Investments
Interest
Wages
Capital Gains
Which type of Income is tied to Savings Accounts
Interest
Wages
Capital Gains
Which plan is preferable for someone who expects to go to the doctor frequently throughout the year?
Bronze
Silver
Gold
Platinum
Based on the graph, which level of educational attainment provides the greatest potential
increase in earnings?
Between a bachelor’s degree and a master’s degree
Between a bachelor’s degree and a doctoral degree
Between a high school diploma and an associates degree
Between some college, no degree and a bachelor’s degree
How can an individual best prepare to reduce the impact of larger unplanned spending?
By purchasing home and auto insurance
By setting up an emergency savings account
By investing in assets that are difficult to quickly liquidate
By declaring bankruptcy and finding additional lines of credit
What are the benefits of renting a home instead of buying a home?
Renting protects consumers from poor credit.
Renting ensures state and federal assistance for tenants.
Renting requires that less money be paid in the short term.
Renting allows consumers to have much greater tax benefits.
Renting enables consumers to move between homes more easily.
Which scenario represents the BEST example of predatory lending practices?
A car owner refinances their auto loan multiple times to reduce their interest rates.
A college student takes out a consolidation loan, aiming to simplify debts so that she can
refinance.
A homeowner secures a mortgage with above-average rates due to prevailing high
interest rates in the market.
A retiree secures a title loan with a high interest rate for home repairs, using their home
as collateral for the loan.
How might an individual with a low-income benefit from selecting credit card A over credit card B?
Select TWO correct answers.
Credit Card A enforces a stricter late fee policy, which will ensure no late payments.
Credit Card A offers a lower annual fee, meaning that the interest payments will be lower.
Credit Card A provides a lower credit limit, reducing the likelihood of accumulating
excessive debts.
Credit Card A provides opportunities to purchase tickets to special events that are
popular and hard to access.
Credit Card A offers a lower annual percentage rate, which is better for individuals
carrying balances over time.
How will participating in education and training beyond a high school degree commonly affect an individual's income over time?
Student loans incurred to pay for postsecondary education reduce lifetime earnings.
Earned income usually peaks during education and training.
Higher levels of education and training result in greater lifetime earnings.
Investment income decreases with increased levels of education and training.
An undergraduate student is applying for a student loan to pay for tuition. What benefit makes a subsidized loan more attractive compared to an unsubsidized loan?
Subsidized loans offer higher annual borrowing limits than unsubsidized loans.
Subsidized loans allow the student to avoid interest payments during his time in college.
Subsidized loans require a higher credit score than unsubsidized loans, ensuring a lower interest rate.
Subsidized loans are more appropriate for undergraduate loans than graduate loans.
What is one step she needs to take to meet legal financial obligations for her independent contractor work?
File income taxes on extra money earned
Establish payment through direct deposit
Sign up for supplemental health insurance
Report additional income to her full-time employer
Which agency is the most commonly available to support entrepreneurs at the local level?
Department of Labor
Chamber of Commerce
Small Business Administration
Consumer Financial Protection Bureau
What is one benefit of starting a new business as a sole proprietorship?
The owner would not be liable for company debts.
The owner could delegate responsibilities to partners.
The owner would not have high overhead costs.
The owner would have complete control over the company.
Why would using a mobile payment application be the best choice for Mark?
It will better serve Mark because he will be able to avoid out-of-state fees.
It will help Mark because the transaction will not be included in his budget.
It will better protect Mark because it is more secure than other forms of exchange.
It will help Mark because he will not need an internet connection to complete the transaction.
How would using a budgeting app to automate the process BEST benefit Mia?
It would update and track income and expenses for Mia automatically.
It would show Mia that she can spend more when she goes out with friends.
It would provide Mia with additional investments just because she has the app.
It would increase Mia’s credit score as banks prioritize lenders who have apps.
______________ are investment options that offer the highest potential for returns but also the highest level of risk.
Government Bonds
Certificates of Deposit (CD's)
Stocks
Why is it a good idea to diversify your investment portfolios?
it maximizes returns while decreasing the overall volatility of an invesgtment portfolio
it ensures consistent returns regardless of market fluctuations
prevents investors from making reactionary decisions during bear markets
Identify which is the monthly Premium from the options listed
$130
$35
$2,000
$8,000
Identify which is the Deductible from the options listed
$130
$35
$2,000
$8,000
Identify which is the Co-Pay from the options listed
$130
$35
$2,000
$8,000
Identify which is the Out-of-Pocket Maximum from the options listed
$130
$35
$2,000
$8,000
Which Advantages does Driver A have for a lower insurance premium?
Type of Vehicle
Driver Demographic
Geographic location
Driving Record
Which Advantages does Driver B have for a lower insurance premium?
Type of Vehicle
Driver Demographic
Geographic location
Driving Record
Identify the 2 features of Grants
Generally awarded based on financial need
Available through state or federal governments
Generally awarded based on merit or skill
Available through businesses and community organizations
Identify the 2 features of Scholarships
Generally awarded based on financial need
Available through state or federal governments
Generally awarded based on merit or skill
Available through businesses and community organizations
Identify the benefits of Starting a new business:
No limit on profits
High level of autonomy and creativity
Established procedures and processes in place
Easier to secure financing and better rate of success
Identify the benefits of Purchasing a Franchise
No limit on profits
High level of autonomy and creativity
Established procedures and processes in place
Easier to secure financing and better rate of success
