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U2 Fin. Lit QuizziZ (25)

Total questions: 77

Worksheet time: 1hrs 6mins

Name
Class
Date
1.

What is the main purpose of a central bank in an economy?

a)

To set prices for all goods and services

b)

To regulate the money supply and maintain financial stability

c)

To collect taxes from citizens

d)

To provide loans to individuals only

2.

Which of the following best describes the concept of "opportunity cost"?

a)

The amount of money spent on a good

b)

The value of the next best alternative forgone

c)

The profit earned from an investment

d)

The total cost of all alternatives

3.

If the annual interest rate is 5%5\% , what is the simple interest earned on a principal of \$1,000 after 2 years?

a)

\$50

b)

\$100

c)

\$150

d)

\$200

4.

Which of the following is NOT a function of money?

a)

Medium of exchange

b)

Store of value

c)

Unit of account

d)

Means of production

5.

What does GDP stand for?

a)

Gross Domestic Product

b)

General Debt Payment

c)

Government Development Plan

d)

Global Demand Price

6.

Which of the following is an example of a regressive tax?

a)

Income tax

b)

Sales tax

c)

Property tax

d)

Corporate tax

7.

What is the main difference between a stock and a bond?

a)

Stocks represent ownership; bonds are loans to a company or government

b)

Stocks pay fixed interest; bonds pay dividends

c)

Bonds have no maturity date; stocks do

d)

Stocks are less risky than bonds

8.

If the price of a product increases and the quantity demanded decreases, this is an example of:

a)

The law of supply

b)

The law of demand

c)

Price elasticity

d)

Market equilibrium

9.

Which of the following best describes inflation?

a)

A general decrease in the price level of goods and services

b)

A general increase in the price level of goods and services

c)

An increase in the value of money

d)

A decrease in the money supply

10.

A budget deficit occurs when:

a)

Government revenue exceeds government spending

b)

Government spending exceeds government revenue

c)

Exports exceed imports

d)

Imports exceed exports

11.

Which of the following is the best example of diversification in investing?

a)

Buying only technology stocks

b)

Investing in a mix of stocks, bonds, and real estate

c)

Putting all money in a savings account

d)

Purchasing gold only

12.
Which federal agency protects deposits in commercial banks ?
a)
FDIC
b)
IRS
c)
DEA
d)
EPA
13.

The amount of money borrowed, or the amount of money still owed on a loan, apart from the interest

a)

Interest

b)

Collateral loan

c)

Principal

d)

Savings

14.

The six main characteristics of money are acceptability, portability, divisibility, uniformity,

a)

inflexibility and inconsistency.

b)

scarcity and durability

c)

abundance and solubility

d)

fragility and profusion

15.

An entrepreneur who needs financial help in buying new equipment for her thriving bakery might take out a

a)

Consumer loan

b)

Certificate of deposit

c)

Commercial loan

d)

Mortgage loan

16.

What is a bank's main function?

a)

Protect the nation's financial status by holding all of its deposits

b)

To issue Federal Reserve notes, the paper currency we know as dollars

c)

To serve as a financial intermediary between savers and borrowers

d)

To make sure consumers save enough money for retirement

17.

Most people need Social Security, company retirement plans, and savings to pay for retirement.

a)

False

b)

True

18.

The Federal Reserve plays an important role in

a)

Providing loans directly to consumers

b)

Controlling the money supply

c)

Offering credit cards to high-risk individuals

d)

All answers are correct

19.
When a nation imports more than it exports, economists say it has which of the following?
a)
A trade surplus
b)
A balance of trade
c)
A trade deficit
d)
A national difference
20.

Producers and consumers determine how to use resources and make goods based on supply and demand in the market, without government interference.

a)

Market Economy

b)

Traditional Economy

c)

Command Economy

d)

Mixed Economy

21.
When a nation imports more than it exports, economists say it has which of the following?
a)
A trade surplus
b)
A balance of trade
c)
A trade deficit
d)
A national difference
22.
According to the law of comparative advantage, a country should 
a)
Specialize and export goods with the lowest production cost
b)
Specialize and export goods with the lowest opportunity cost
c)
Specialize and export goods with the lowest average cost
d)
Specialize and export goods with the highest opportunity cost
23.
Which of the following is NOT an argument in favor of protectionism?
a)
Protectionism shields infant industries from competition
b)
Protectionism safeguards workers’ jobs
c)
Protectionism promotes industries that are essential to national security
d)
Protectionism makes domestic firms more competitive in the long run
24.
Who is most likely to be hurt by inflation?
a)
someone who borrowed money
b)
a retiree on a fixed income
c)
a business owner
d)
the U.S. government
25.
Which of the following groups suffer from high inflation
a)
Borrowers
b)
Lenders
c)
Taxpayers
d)
Property Investors
26.

Producers and consumers determine how to use resources and make goods based on supply and demand in the market, without government interference.

a)

Market Economy

b)

Traditional Economy

c)

Command Economy

d)

Mixed Economy

27.

Which policy would help fight inflation?

a)

Expansionary

b)

Contractionary

28.

Who is affected by the condition of scarcity?

a)

The rich

b)

Large economies

c)

All societies

d)

Producers (ie: businesses)

29.
The Welch family has saved some money.  They can spend it on a vacation to the Grand Canyon or build a swimming pool in their back yard.  They decide to spend the money on a swimming pool.  What is the opportunity cost of their decision?
a)
vacation 
b)
swimming pool 
30.
Opportunity Cost is best defined as
a)
The best rejected alternative you give up when making a decision 
b)
The price you pay to purchase something 
c)
The benefit you gain by making a decision 
d)
The amount of debt you take on by making a decision 
31.

What countries have a Command Economy?

a)

Iceland, Sweden, France, Australia

b)

United States, Russia, Africa, Haiti

c)

India, United Kingdom, Brazil

d)

North Korea, Cuba, Soviet Union, China, Vietnam

32.

What is one advantage of a Command Economy?

a)

Individual freedom for everyone

b)

Health and public services are available to everyone at little or no cost.

c)

The government rarely interferes.

d)

Able to adjust to change gradually

33.

what is Human Capital?

a)

Money Assets of a Company

b)

Immigration of people into America

c)

Treating yourself to a nice dinner

d)

A worker's skill, knowledge, and experience

34.

What is an example of Human Capital? Select all that apply

a)

On the Job training

b)

A company wanting to expand

c)

Graduating with a degree

d)

Losing the cash in your wallet

35.
What does point Y represent on the PPC?
a)
Efficiency
b)
Unattainable / impossible
c)
Inefficency
d)
Nothing
36.
What does point B represent?
a)
Production at greater than the country's minimum potential
b)
Production is less than the country's minimum potential
c)
Productive inefficiency
d)
Productive efficiency
37.
In this market, businesses buy resources they need to produce goods and services.
a)
factor market
b)
stores
c)
product market
d)
 businesses
38.
Steel Beam Inc. is looking to purchase a new steel-processing machine and factory. In the circular flow diagram, this transaction will take place in the
a)
Product market.
b)
Resource market
c)
Foreign Exchange market
d)
Public market
39.

When producers offer more of a good as its price increases and less as its price falls, this defines the

a)

law of demand

b)

law of supply

c)

change in demand

d)

change in supply

40.

Which of these demonstrates an example of a supply curve? (More than one answer)

a)
b)
c)
d)
41.

Which of the following demonstrates price equilibrium?

a)
b)
c)
d)
42.

the price where the quantity supplied equals the quantity demanded is known as

a)

opportunity cost

b)

demand curve

c)

marginal analysis

d)

market equilibrium

43.

T.I.M.E.R is an acronym that represents the shifters of ...

a)

Supply

b)

Demand

44.
At the price of 1.00 there is a 
a)
shortage of 200
b)
surplus of 200
c)
shortage of 400
d)
surplus of 400
45.
If the government set the price at $700, would that be a price ceiling or floor?
a)
Price Ceiling
b)
Price Floor 
c)
Neither
46.
If the government creates a price ceiling of $30, which one of the following statements is correct?
a)
The quantity demanded = 60
b)
The quantity supplied = 160
c)
There is a surplus of 100
d)
There is a shortage of 100
47.

What is a Sole Proprietorship?

a)

Business owned by president

b)

Business owned by several companies

c)

Business owned by one person

d)

Business owned by a company

48.

Sole proprietorship business owner has

a)

Restricted Liability

b)

No Liability

c)

Unlimited Liability

d)

Limited Liability

49.
An industry that is dominated by a few large firms is 
a)
monopolistic competition.
b)
a monopoly.
c)
perfect competition.
d)
an oligopoly.
50.

A perfectly competitive firm

a)

A) sells a product that has perfect substitutes.

b)

B) has a perfectly inelastic demand.

c)

C) has a perfectly elastic supply.

d)

D) Answers A and B are correct.

e)

E) Answers A and C are correct.

51.

Which of the following is likely the best indicator of economic health?

a)

Real GDP is $18 trillion.

b)

Real GDP grew by 3 percent this year.

c)

Nominal GDP is $18 trillion.

d)

Nominal GDP grew by 3 percent this year.

52.

A general rule of thumb says that a country has experienced a recession if:

a)

Real GDP has declined.

b)

GDP has declined.

c)

Nominal GDP has declined for at least two consecutive quarters.

d)

Real GDP has declined for at least two consecutive quarters.

53.
What function of money the picture represent? 
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Acceptable 
54.
At the grocery store last week, you purchased $94.25 worth of groceries. You paid for the groceries in cash. You gave the cashier four $20 bills, a $10 bill, three $1 bills, and a quarter. What is the primary function of money exhibited here? 
a)
Medium of Exchange
b)
Store of Value
c)
Unit of Account
d)
Acceptable 
55.
Does increasing the money supply cause inflation or deflation?
a)
Inflation
b)
Deflation
56.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.
57.
In a recession, the Fed would likely
a)
Increase the supply of money in the economy
b)
Decrease the supply of the money in the economy
58.
Which of these is NOT a monetary policy tool?
a)
Discount rate
b)
Balance Accounts
c)
Open Market Operation
d)
Reserved Requirements
59.

Who is in charge of Monetary Policy

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of the Treasury

60.

Monetary Policy is the Federal Reserve Systems attempt to...

a)

control the amount of money in circulation

b)

control the Federal Government's debt

c)

control state governments' spending

d)

none of these answers are correct.

61.
Who is in charge of fiscal policy?
a)
Government
b)
Federal Reserve
62.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 
a)
decreasing taxes.
b)
decreasing spending.
c)
decreasing the money supply.
d)
decreasing the reserve requirement.
63.

The two "tools" of Fiscal Policy are:

a)

the power to tax

b)

the power to spend

c)

the power to borrow money

d)

the power to print money

64.

Which financial institution generally offers lower interest rates on loans?

a)

Title Pawn Lender

b)

Credit Unions

c)

Banks

d)

Pay Day Loan Company

65.
A _____________tax may at first appear to be a fair way of taxing citizens because everyone, regardless of income level, pays the same dollar amount. By taking a closer look, it is easy to see that such a tax causes lower-income people to pay a larger share of their income than wealthier people pay
a)
progressive
b)
income
c)
flat
d)
regressive
66.
A _________ tax, also referred to as a flat tax, impacts low-, middle- and high-income earners relatively equally. 
a)
regressive
b)
proportional
c)
income
67.
What does APR stand for?
a)
American Peoples Reports
b)
Annual Progress Report
c)
American Percentage Rate
d)
Annual Percentage Rate
68.
What financial habits determine your credit score?
a)
Payment History & Amount you owe 
b)
Length of credit history & Amount of new credit applied for recently
c)
Types of credit open
d)
All of these are correct
69.
It is wise to compare credit card offers before choosing one
a)
True
b)
False
70.

The amount you pay for insurance coverage.

a)

Premium

b)

Deductible

c)

Co-Pay

d)

Policy

71.

The amount of money you must pay upfront/out of pocket before your insurance coverage begins to pay.

a)

Premium

b)

Deductible

c)

Co-Pay

d)

Policy

72.

If you have a higher premium it will usually mean a ________ deductible.

a)

Higher

b)

Lower

73.

China placed a 25% tax on imported American chicken.

a)

Tariff

b)

Quota

c)

Embargo

74.
NAFTA is an agreement between all of the following countries EXCEPT
a)
United States
b)
Mexico
c)
Great Britain
d)
Canada
75.

What is a decrease in the value of a currency?

a)

appreciation

b)

depreciation

c)

exchange rate

d)

inflation

76.

Which group benefits the most when the US Dollar depreciates?

a)

Those who import products in the US

b)

Those who export products in the US

c)

US Tourists Abroad

d)

US College Students

77.

If US consumer Income drops, how with this impact the Demand for US Automobiles?

a)

The Demand curve will shift right

b)

The Demand curve will shift left

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