Economics Unit 7 Usa Test Prep Missed Questions

Automobile Comparison Year Type Price Miles Safety Reviews 2007 Ford Mustang $15,999 45K ★★★☆☆ ★★★★☆ 2010 Kia Rio $10,500 23K ★★★☆☆ ★★☆☆☆ 2008 Mini Cooper $14,999 88K ★★★★☆ ★★★★★ 2007 Volkswagen Jetta $12,000 48K ★★★★★ ★★★★★ You want to buy a car. Your parents will pay for half of the car if you save enough money for the other half. You have chosen the car with the best reviews and least miles. If you earn $500 per month, how many months will you have to work to buy your car? A) 11 months B) 12 months C) 15 months D)16 months

Marco creates a budget for himself. He would like to buy ice cream once a week, but doesn't have enough money to do so in his current budget. Which parts of Marco's budget could he increase to have enough money for ice cream each week? A) taxes B) saving C) income D) investments

The investment option with the highest rate of return and highest degree of risk is A) junk bonds. B) common stock. C) U.S. treasury bills. D) investment-grade bonds.

One important way in which banks make economic growth possible is by A) selling savings bonds. B) cashing payroll checks. C) lending money to business startups. D) offering checking and savings accounts.

If you purchase AT&T stock at $100 a share in August, and each month AT&T stock falls consistently, what would BEST describe the stock market during that time? A) Bear Market B) Bull Market C) Inflated Market D) Deflated Market

What does "load" refer to in terms of mutual funds? A) The percentage of the mutual fund that is considered to be low-risk. B) The percentage of the mutual fund that is considered to be high-risk. C) The percentage of the mutual fund that is considered to be risky or "junk." D) The percentage or sales charges added to a mutual fund when it is purchased.

Banks borrow money (from other banks and from consumers' deposits) and then lend that money to others. This is an essential part of the maintenance of the health of the economy called A) demand control. B) the law of supply. C) market conditions. D) availability of capital.

How does the risk/return ratio of a government bond compare with that of other types of investments? A) Government bonds have higher risk and higher returns. B) Government bonds provide higher returns and lower risk. C) Government bonds typically provide lower returns, at lower risk. D) Government bonds have about the same risk/return ratio as other investments.

Shawn just graduated from college. Why might Shawn benefit from rapid inflation in the economy? A) Purchasing a home will be easier. B) There will be more goods to purchase. C) Businesses are more likely to hire during times of inflation. D) Student loan repayments will not cost as much in real dollars.

Unanticipated inflation can cause all of the following EXCEPT A) production of goods and services decreases. B) government gains tax revenue from income increases. C) debtors repay creditors with dollars that are worth less. D) fixed incomes increase more rapidly than the price level.

A state decides that it wants to implement an excise tax on tobacco products to help fund healthcare for children. The tax will be a 2% tax on all tobacco products sold in the state. What type of tax is this excise tax? A) Progressive B) Proportional C) Regional D) Regressive

What is the relationship between credit and debt? A) Assuming debt means more credit will be extended. B) Being extended credit means debt has been assumed. C) Credit must be extended before debt can be assumed. D) Debt must be assumed before credit can be extended.

________ is the ability to raise funds or have co-signers for a loan. A) Capacity B) Capital C) Character D) Collateral

Which type of insurance has a cash value that can be used in emergencies? A) property B) term life C) disability D) whole life

Keene has decided he would like to provide income for his dependents, but he wants flexibility in the pay out options. According to the chart, which choice BEST suits his needs? A) Deferred Annuities B) Term Life Insurance C) Immediate Annuities D) Whole Life Insurance

Pays a higher interest rate than a savings account • Limited check-writing ability • Offers benefits of both savings and checking accounts • Require a higher balance than a savings account • FDIC insured What does this describe? A) money market account B) basic checking account C) money market mutual fund D) market checking account

If you take out money from a CD before it reaches maturity you must A) pay the bank a penalty, typically three months' interest. B) forget it. You cannot withdraw yany money until a CD matures. C) pay both the bank and IRS a penalty of three months' interest. D) pay the IRS a penalty, typically 10 percent of the account's value.

The financial institution that generally charges the LOWEST rates on loans is a A) credit union. B) finance company. C) commercial bank. D) savings and loan.

Which of these would be considered a "Level 4" investment? A) real estate B) baseball cards C) government bonds D) money market accounts

Which combination would create medium growth and medium risk? A) Stocks and bonds B) Stock-based and bond-based mutual funds C) Savings account and certificate of deposit D) Savings account and bond-based mutual funds

Which financial service is LEAST LIKELY to be offered by a credit union? A) trust accounts B) savings accounts C) automobile loans D) certificates of deposit

Why might students be affected adversely by inflation? A) Teachers would lose their jobs. B) Students usually work for low wages. C) Many students would lose their jobs. D) School lunch costs would rise sharply.

Which is a monetary policy that would be useful in stopping deflation? A) decreasing taxation B) increasing the discount rate C) increasing government spending D) decreasing the reserve requirement

According to the cartoon, who should impose a sales tax? A) individuals B) corporations C) state government D) federal government

In 2003, the Social Security component of the Federal Insurance Contributions Act (FICA) was 6.2 percent of wages and salaries up to $87,000. After that amount, Social Security taxes were not collected, regardless of income. Because Social Security tax was capped in 2003, it was A) graduated up to $87,000. B) regressive up to $87,000. C) progressive up to $87,000. D) proportional up to $87,000.

Of these choices, the BEST example of a regressive tax in the United States is A) corporation tax. B) the state income tax. C) the federal personal income tax. D) the federal excise tax on gasoline.