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Worksheets2026 EPF Final (120Q)
Total questions: 120
Worksheet time: 3600secs
Economics is best defined as the study of:
how governments print money
choices people make to satisfy wants and needs when resources are limited
how businesses set wages
why prices always rise
Scarcity means:
wants are limited but resources are unlimited
resources are limited compared to wants
only money is limited
governments control all resources
Which is a natural resource?
factory robot
timber
employee training
business loan
Labor is:
raw materials from nature
human effort used in production
money used to expand a business
tools and equipment
Human capital refers to:
machines and tools
money in a bank account
skills, education, and training that increase productivity
natural resources used in production
Which is physical capital?
a worker’s experience
a company’s brand name
a delivery truck
a customer’s demand
Financial capital is:
government regulations
money and monetary assets used to start/operate/expand a business
land and minerals
employee effort
An entrepreneur is best described as:
a person who buys only government bonds
a risk-taker who organizes resources to produce goods/services
a worker who provides labor
a government official who sets prices
For a restaurant, which factor most directly includes the kitchen ovens and refrigerators?
labor
human capital
physical capital
natural resources
Which pairing is correct?
human capital = timber
physical capital = worker training
labor = human effort
financial capital = sunlight
In a command economy, the government:
never sets prices
centrally determines production, investment, prices, and incomes
allows supply and demand to determine prices
has no involvement
In a market economy, decisions are primarily made by:
a king/queen
businesses and consumers through supply and demand
the federal government only
labor unions only
A mixed economy:
has no private ownership
combines private enterprise with some government involvement
is the same as a command economy
bans competition
Competition exists mainly because:
resources are unlimited
people always agree
something limited is desired by multiple people/groups
prices never change
Macroeconomics focuses on:
a single firm’s pricing strategy
one local market only
inflation, unemployment, national productivity, interest rates
personal budgeting only
Microeconomics focuses on:
national unemployment rate
interest rate policy of the Federal Reserve
supply and demand in a specific market
national productivity
Which is a macroeconomic issue?
a student choosing between two jobs
inflation rate changes nationwide
a store deciding a price for one product
a consumer buying one brand over another
Which is a microeconomic decision?
the national unemployment rate
the Fed raising interest rates
a business setting the price of sneakers
national productivity growth
Competition is most directly linked to:
scarcity
hyperinflation
diversification
depreciation
A country that is “mostly market-based but with regulations and public services” is likely a:
command economy
mixed economy
barter economy
monarchy economy
Opportunity cost is:
the total money you spend
what you give up when choosing one option over another
a guaranteed benefit
the cost of inflation
Opportunity cost is best described as the:
worst alternative
next best alternative that you give up
total cost of all alternatives
amount of money saved
A tradeoff is:
getting everything you want
giving up one thing to gain another
never having to choose
a government tax
An incentive is:
a reason that motivates action
a type of inflation
a retirement account
a bond maturity date
Efficiency means:
using resources wisely and without waste
spending more to get more
maximizing underutilization
keeping prices constant
Underutilization means:
using resources beyond capacity
not using resources to their full potential
eliminating opportunity cost
increasing wages automatically
If you study for an hour instead of playing a game, your opportunity cost is:
the hour of studying
the next best activity you gave up (playing the game)
the cost of the textbook
inflation
A business deciding between hiring another worker or buying a machine is making a:
CPI decision
tradeoff decision
deflation decision
monopoly decision
Which is most likely to improve efficiency?
wasting raw materials
leaving machines idle
improving production processes to reduce waste
ignoring incentives
Underutilization might be shown by:
a factory operating below capacity
a store selling out every day
full employment
zero competition
A good is:
an act performed for someone
a tangible item that can be bought or sold
always a government program
always free
A service is:
always tangible
an act/work performed for which someone is willing to pay
a raw material from nature
a tool used in production
Which is a good?
haircut
tutoring session
bicycle
legal advice
Which is a service?
smartphone
car wash
desk
textbook
Services often depend heavily on:
natural resources only
labor and human capital
deflation
market capitalization
Inflation is:
a sustained rise in prices over time causing money to lose value
a decline in prices over time
the same as unemployment
a measure of stock volatility
Deflation is:
rapid price increases
a general decline in prices over time
rising wages
rising GDP
Hyperinflation is:
slow and stable prices
extremely rapid and out-of-control price increases
lower interest rates
decreasing unemployment
Stagflation combines:
low inflation and high growth
high inflation and slow economic growth (often high unemployment)
low unemployment and deflation
high growth and deflation
Cost-push inflation occurs when:
demand rises faster than supply
production costs rise (wages/energy/raw materials)
government cuts spending
unemployment falls
Demand-pull inflation occurs when:
demand increases faster than supply
production costs fall
wages fall
prices are fixed
CPI measures:
interest rate changes only
average price changes for a market basket of goods/services over time
stock market returns
unemployment rate
Inflation rate is commonly calculated by:
comparing today’s wages to last year’s wages
comparing the cost of the same market basket over time
comparing stock prices daily
comparing bond maturity dates
Core inflation excludes:
housing and healthcare
food and energy
wages and productivity
interest and taxes
Purchasing power is:
how much debt you can borrow
how many goods/services a given amount of money can buy
the amount of taxes you pay
the inflation rate itself
Cost of living refers to:
stock market trends
how much money is needed to maintain a standard of living
only the cost of housing
only the cost of food
Inflation generally causes purchasing power to:
increase
stay the same
decrease over time
disappear instantly
Core inflation can be useful because it:
includes only food and energy
removes volatile items to show longer-term trends
measures unemployment
measures market capitalization
The Federal Reserve is:
the U.S. central bank that manages monetary policy including interest rates
the U.S. stock exchange
a private credit union
the Treasury Department
When interest rates rise, borrowing typically becomes:
cheaper
more expensive
impossible
irrelevant
Higher interest rates often:
increase borrowing and speed up the economy
reduce borrowing and slow economic activity
have no effect on consumers
eliminate inflation instantly
Raising interest rates usually reduces borrowing because:
lenders become less strict
loans cost more in interest
wages immediately rise
prices are fixed
Interest rate changes can affect businesses by:
changing the cost of financing expansion
removing competition
changing CPI directly
eliminating opportunity cost
Interest rate changes can affect consumers by:
changing loan and credit card costs
changing the number of House seats
changing bond maturity dates
changing physical capital
A borrower is:
a person who lends money
a person who receives money and agrees to repay later
a person who sets interest rates
a person who only invests
A lender is:
a person who receives money
a person or institution that loans money
a government agency that prints money
a company that manufactures goods
A mortgage is:
a loan used to buy real estate, secured by the property
a loan used only for cars
a retirement plan
a type of bond
A fixed-rate mortgage means:
interest rate changes monthly
interest rate stays the same for the life of the loan
there is no interest
principal is never repaid
An adjustable-rate mortgage means:
interest rate stays the same forever
interest rate can change based on market rates
the loan is not secured
the lender cannot charge interest
Someone might choose a fixed-rate mortgage because:
they want payment predictability
they want maximum volatility
they expect their interest rate to change daily
they want a shorter term automatically
Inflation usually affects interest rates over time by putting pressure for rates to:
fall to zero
rise
become irrelevant
stop existing
Fixed income refers to:
unpredictable wage payments
steady, predictable payments at regular intervals
only minimum wage
only stock dividends
In course context, “low income” suggests earnings:
rise faster than inflation
remain low or stagnant while prices rise
always include dividends
depend on bond maturity
Wealth is described as:
only having a job
having assets/investments that can grow and keep up with or exceed inflation
always taking loans
only saving cash
Saving is:
buying assets for growth
money not spent and set aside for future use
borrowing money
paying taxes
Investing is:
setting money aside without expectation of return
buying assets expecting to earn money over time
only buying groceries
always risk-free
A short-term goal is generally:
more than two years away
planned for the near future
always retirement
never measurable
A long-term goal is generally:
within one week
more than two years away
completed instantly
always a service
A brand is:
the identity/name a company gives a product or service
the total stock value of a company
a government policy
a type of bond
A company is:
a business formed to supply products or services for profit
a retirement plan
a CPI measurement
a type of inflation
A product is:
always a service
an item or service offered for sale
only physical capital
only natural resources
A private company is:
owned by a select group; not publicly traded
owned by the government
traded on stock exchanges
always larger than public companies
A public company is:
not allowed to issue shares
owned only by founders
traded on stock exchanges
always larger than public companies
One reason a company might stay private is to:
avoid any competition
avoid issuing shares to the public and keep control more concentrated
eliminate taxes
eliminate risk
Investing risk is:
guaranteed profit
the possibility of loss or losing part of an investment’s value
always avoided by diversification
the same as inflation
Risk tolerance means:
your comfort level with uncertainty and potential losses
the maturity date of a bond
the annual fee on a credit card
the CPI formula
Diversification means:
investing in one stock only
spreading investments across different assets/sectors/industries to reduce risk
borrowing more money
choosing the highest beta stocks only
The P/E ratio compares:
a company’s revenue to its debt
stock price to earnings per share
stock price to CPI
dividends to maturity dates
Beta measures:
company size
volatility compared to the overall market
bond interest rate
inflation rate
A sector is:
a specific company
a broad category of companies (e.g., Technology)
a specific product line
a bond type
An industry is:
broader than a sector
a more specific group within a sector
the same as an asset class
the same as CPI
Market capitalization is:
share price × number of shares outstanding
earnings per share × dividends
bond interest × maturity
CPI × inflation rate
Fundamental analysis involves:
only technical charts
evaluating investments using financial performance plus outside factors
only guessing future prices
only inflation data
A mutual fund is:
one investor buying one stock
pooled money buying a diversified portfolio, professionally managed
a bank loan
a government agency
Expense ratio is:
the bond maturity date
the annual cost to run a fund as a percentage of your investment
the inflation rate
the monthly payment on a loan
YTD return measures:
change since the beginning of the calendar year
change over the past decade only
bond interest rate only
price changes in food and energy
An asset class is:
one company’s shares
a category of investments like stocks, bonds, cash, real estate
a type of inflation
a credit score bracket
Asset allocation is:
picking one asset type
dividing a portfolio among asset classes based on goals and risk tolerance
drawing district lines
setting interest rates
A bond is best described as:
ownership in a company
an IOU where you lend money and receive interest
a type of insurance
a brand identity
Municipal bonds are issued by:
private corporations only
state and local governments
the Federal Reserve
stock exchanges
U.S. Treasury securities are issued by:
city governments
federal government
private banks
mutual funds
The maturity date is:
when the issuer pays back the principal (face value)
when you first buy the bond
when CPI is released
when beta changes
A credit score represents:
how reliable someone is at repaying debts
their income level
their investment returns
Strong credit can lead to:
worse interest rates
better interest rates and easier approvals
lower wages
higher CPI
An annual credit card fee is:
a charge collected each year simply for having the card
interest on a mortgage
a bond coupon payment
the cost of inflation
A card with an annual fee might make sense when:
benefits/rewards exceed the fee’s cost
you never use the card
inflation is zero
beta is high
New cars often:
have no warranty
include full manufacturer warranty coverage
appreciate quickly
depreciate slowly in the first year
New cars usually:
depreciate quickly in the first year
depreciate slower than used cars
never depreciate
have unknown history
Used cars often:
cost more than new cars
depreciate faster than new cars in the first year
cost less and depreciate more slowly than new cars
always include full warranty
Used cars can carry more risk because of:
guaranteed full warranty
unknown history/condition
government regulation
fixed interest rates
Certified Pre-Owned (CPO) vehicles typically:
are never inspected
include a limited warranty and inspection, reducing (not eliminating) risk
are always cheaper than any used car
are only sold by individuals
Shopping for a car loan can reduce:
opportunity cost
total interest cost by comparing lenders/terms
CPI
inflation
Best negotiation practice when buying a car is to focus on:
monthly payment only
total price and total cost, not just monthly payment
beta and P/E
bond maturity
Total cost of ownership includes:
only sticker price
price + interest + insurance + fuel + maintenance + fees + depreciation
only fuel and maintenance
only taxes
A very low monthly payment can still be expensive overall because:
it always means a lower total price
long loan terms and interest can increase total cost
depreciation stops
warranties are free forever
Liability insurance covers:
damage to your own car from theft
injuries and property damage you cause to others when at fault
only weather damage
only your medical bills
Collision insurance covers:
non-collision events like theft
damage to your own vehicle from a collision
injuries you cause others
bond losses
Comprehensive insurance covers:
collision damage only
non-collision events like theft, vandalism, and many natural disasters
only injuries to others
only interest rate increases
A deductible is:
the annual insurance cost
what you pay out of pocket before insurance pays the rest
the insurance company’s profit
the CPI measure
Premiums vary based on factors such as:
only your favorite color
age and location (traffic, crime, weather, population density)
your bond maturity date
your product brand
Raising your deductible typically:
raises your premium
lowers your premium
has no effect
eliminates insurance needs
Where you live can change insurance price because:
risk varies by traffic, crime, and weather
CPI changes monthly
bonds mature differently
interest rates are fixed
The key distinction between Traditional IRA and Roth IRA is:
both are taxed the same
timing of taxes differs and withdrawal rules differ
only Roth has contributions
only Traditional can invest
Traditional IRAs generally have:
no taxes ever
required minimum distributions at a certain age
no distributions allowed
guaranteed returns
Roth IRAs generally:
require distributions during the owner’s lifetime
do not require distributions during the owner’s lifetime
cannot be used for retirement
are only for businesses
An early withdrawal penalty refers to:
bonus interest for early withdrawal
penalties (and possibly taxes) for taking retirement money out too early
lower CPI
reduced premiums
A pension is:
a defined benefit plan promising a specific benefit amount at retirement
a defined contribution plan based on employee deposits only
a type of inflation
a mutual fund
Pensions are typically funded by:
employers
only employees
the Federal Reserve
local stores
A 401(k) is commonly funded primarily by:
government taxes
employee contributions (sometimes with employer contributions)
bond issuers
insurance premiums
Robo-advisors are:
tools that draw political districts
automated portfolio management tools using algorithms to allocate and rebalance
government central banks
lenders for mortgages
