Econ Final – Flashcards
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What is the difference between a scarcity and a shortage
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A scarcity occurs when there are limited quantities to meet unlimited wants and shortage occurs when a good or service is unavailable
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According to the guns and butter example if a country decides to spend more on military goods which of the following will happen?
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The country will have less money to devote to consumer goods
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By the end of the summer Jason had saved enough money for college from his job as a waiter. He even had some money left over. Although he wanted both he decided to buy a DVD player rather than a digital camera. which of the following is the opportunity cost in this scenario?
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The digital camera
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How does a society answers the three economic questions about the production and consumption of goods and services?
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It's answer is based on the importance editor actors to various economic goals and social values.
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Which one of the following relies on habit, custom, or ritual to decide what to produce, how to produce it, and whom to distribute to?
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A traditional economy
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Self interest is the motivating force driving the free market. Which of the following is the regulating force?
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Competition
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Centrally planned economies can work effectively toward explicitly stated goals, but which of the following is one advantage of such a system?
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It's performance almost always falls short of its ideals.
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Which of the following statements is true, as market economies have a evolved since Adam Smith's time?
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Government intervention in the economy has become greater
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The purpose of the free enterprise system is to
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Give consumers freedom to make economic choices
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Which of the following is a good indicator of economic stability?
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General price levels
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Which of the following is not a reason for the government to provide a good or service as a public good?
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It would be inefficient to exclude non-payers
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Improved technology helps create a higher standard of living for future generations by
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Providing additional goods and services
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When shoes at a local shoe store went on sale at 50% off the regular price, the store sold almost every pair of shoes that I had in less than a day. By the time the stock was replenished, the sale was over and very few shoes were purchased. Which of the following does this illustrate?
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The law of demand
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Which of the following explains the relationship between income affect and consumption?
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When the price of goods goes up, people get less for their money, and consumption goes down
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Mariah is buying fewer boxes of macaroni and cheese, used cars, fast food dinners, and generic products because her income Rose. This shift in the demand curve caused by Mariah's income has resulted in what?
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A decrease demand for inferior goods
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Which of the following is not a factor affecting elasticity?
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The good's price range
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According to the law of supply, the higher the price,
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The larger the quantity produced
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According to the graph of marginal product of labor for a company that makes beanbags, which of the following situations is created when the fourth through seventh workers are hired?
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Diminishing marginal returns
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In which category do you subsidies, excise taxes, and regulation belong
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Governments influence on supply
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Studies a graph showing the equilibrium. For a pizzeria. Which of the following can be said about the equilibrium price and the equilibrium quantity?
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The quantity supplied in the quantity demanded are equal 200 slices per day
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Which of the following government actions is an attempt to control the high cost of rent for lower income families and what has been the result of this action?
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Price ceilings; few renters with the greatest need benefit from the program.
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Which word can be used twice to best complete the sentence? When supply_________, price falls, and quantity Demanded______to reach a new equilibrium.
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Increases
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Factors that make it difficult for new firms to enter the market are called
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Barriers to entry
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A firm sells natural gas to a city for one price and sells the same gas to an outline village at another phrase. What is this practice called?
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Price discrimination
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What is an oligopoly?
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A market structure in which a few large firms dominate the market
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Which of the following correctly to find money as a unit of account?
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It provides a means for comparing the values of goods and services
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One of the six characteristics economists used to judge how well an item serves as currency is the visibility. What does this concept mean?
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Money must be easily divided into smaller denominations.
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What is the difference between commodity money and representative money?
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Commodity money consists of objects that have value in and of themselves, but representative money makes use of objects because the holder can exchange them for something else of value.
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How did the federal reserve system improve the banking industry in the 20th century?
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It served as a central bank with the power to lend to other banks in time of need.
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How does investing contribute to a free enterprise system?
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Investing give more money to businesses to expand and grow, creating new jobs and better products
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Which of the following is a financial intermediary?
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A bank
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Which type of bond carries the least amount of risk?
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Treasury bonds, because they are backed by the US government
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How do you investors usually act during a bear market?
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Investor sell stock and expectation of lower profit because the stock market falls for period of time.
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Why might someone consider the standard and 500 (S and P 500) a better measurement of stock performance than the Dow Jones industrial average
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The Dell reports on 30 stocks in the S and P 500 tracks 500 stocks as a measure of overall stock performance.
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What is the money and investor receives above and beyond the money initially invested called?
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Return
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The securities and exchange commission is
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A government agency that regulates financial markets and investment companies.
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What is the gold standard?
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A system in which a countries money is backed with gold
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Why wouldn't economist use real GDP rather than the nominal GDP to measure growth?
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Real GDP he reflects output more accurately the nominal GDP by using constant prices.
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Which of the following economic activities does not illustrate the limitations of calculating GDP?
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Depreciation
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Four factors, both expected and unexpected, perpetuate the business cycle. Which of the following is not one of these factors?
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Stagflation
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Which one of these people lost his or her job because of structural unemployment?
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Sonia dropped out of school and now feels to meet the minimum requirements for her job.
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10 years ago, a house sold for $54,000. Today the same house is valued at $108,000 what has inflation down to consumers purchasing power?
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Reduced it
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If you lived on a fixed income, how would you be affected by inflation?
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You would be financially stressed because your income does not increase when prices go up?
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The poverty threshold, or poverty line, varies according to what?
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The size of the family
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In the mid-1980s, Congress passed the gram Rudman Hollings act. What was the effect of this legislation?
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It created automatic cuts and some federal expenditures if the deficit exceeded a certain amount
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What role does the federal reserve play in regulating the baking system
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The federal reserve coordinates all regulatory activities and examined Banks periodically
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How do you change in interest rates affect the money supply
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As interest rates rise people generally keep their wealth and assets that pay returns, restricting the money supply.
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The money multiplier formula shows the effect of
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A cash deposit into the banking system of the money supply.
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What is the primary difference between inside and outside policy lags?
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Inside legs are delays in the implementation of policy, and outside lags indicate the time it takes a new policy to become affective.
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With all the investments, as the rest goes up, the return goes down.
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False
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The Roth IRA is in after-tax investment that grows tax-free
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True
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Never buy something you do not fully understand.
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True
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Shelf positioning forces the buyer to associate a value with the product.
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False
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Never roll over your 401(k) when you leave the company.
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False
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If we used a race analogy to describe building wealth, it would be most like a sprint
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False
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Rate of return matters when it comes to compound interest.
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True
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Diversification means to spread around
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True
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Your first baby step is to pay off all your debt
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False
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Most often identity theft is committed by strangers
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False
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There are two major credit bureaus: Trans Union and Experian
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False
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The fastest growing group of bankruptcy filers is senior citizens.
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False
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The power of cash is immediate
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True
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In order to have a Phico score, you must have debt
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True
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The envelope system include using credit card for emergencies.
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False
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The average beautiful find his anywhere from 90 to 200 companies in it.
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True
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You do not need renters insurance if you live in a dorm at college
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False
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Liquidity is the availability of your money
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True
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You need a credit card in order to rent cars and check into hotels
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False
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Cash advance in title pawn companies charge roughly the same interest rates and fees on loans as a credit card company
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False
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Using a credit card is a good way to find a bargain
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False
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Henry Ford and JCPenney were pioneers of the use of credit
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False
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You should always use a realtor when selling a
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False
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Term life insurance is more expensive because it funds a
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False
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Spending cash is more painful than using a debit card
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True
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Men in women have different views about money
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True
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Personal finances 20% behavior, 80% had knowledge.
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False
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The average job is five years in length
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False
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Not every state has FICA tax withholdings
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False
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There is no interest charged on debit purchases
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True
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The number one cause of divorce in this
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True
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Walk away power means you leave if you don't get the price you want
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True
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A good age to open a checking account is between the ages of 13 and
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True
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The purpose of insurance is to increase your investment
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False
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Increasing your deductible usually decreases the premium
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True
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There are two parts to FICA: Medicare and social security
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True
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Ifyour mortgage payment exceeds 25% of your net income, you have bought more house than you can afford
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True
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Your salary is the most important motivation for
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True
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It usually takes three months for your budget to begin working well
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True
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Why do you plan for retirement instead of relying on Social Security to take care of you
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All of the above
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Which is a type of insurance to avoid
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Accidental death insurance
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What is the difference between gross pay and net pay
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Gross pay is before taxes, net pay is after
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You are ready to buy a home under the following conditions
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You have at least 10% down and you have an emergency fund
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Which tax may or may not be withheld from your paycheck depending on where you live
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State
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Which is not a characteristic of cash
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Walk away power
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In general, a good way to save on insurance premiums is to
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Increase your deductible
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What is a good age for kids to open their first checking account
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13 to 15 years old
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Joe tried to bargain at an electronic store but is unable to get the price down to where he wants it what should his next step be
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Walk away
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A written cash flow plan is done
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Month
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which statement is not true about extended warranties
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Only 12% of the warranty covers the statistical approach probability of the item breaking
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What is true about your Strengths and personality
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You grow the most in your areas of strength
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The primary reason for insurance
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Transfer risk
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Why is cash value life insurance not a good investment
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All of the above
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Which of the following will not likely lead to reduce insurance rates
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Speeding ticket
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A collector is talk to:
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Evoke strong emotion
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Which of the following is not a regulatory
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Bank of America
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Which is not part of the federal fair debt collection practices act
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Requires creditors to correct any inaccuracies on your account
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Which is true about the practice of marketing credit cards to teenagers
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All of the above
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In order to effectively manage money, you need a
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Budget
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Which of the following is not one of the three keys to finding a bargain
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Fast talking
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How much more do you spend on purchases when you use credit instead of cash
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12 to 18% more
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A__________is usually over $300, but can vary depending on the person.
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Significant purchase
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which is not a precaution to prevent your identity from being stolen
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Keep your Social Security card on you at all times
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Which of the following is not covered under a Bankruptcy
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Student loans
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What is a key feature in computing your Phico score
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Debt
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What concert is Best explained by the statement, money spent here cannot be spent there?
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Opportunity cost
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And overdue payment is called
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delinquency
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Which is a true statement regarding the use of credit cards and paying the balance off each month
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You are spending an average of 12 to 80% more when you use a credit card
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The baby steps can best be described as
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All of the above
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Which is a good investment
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Mutual fund
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The most aggressive mutual funds tend to be from
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Companies that are a little younger and growing
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The risk return ratio says
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When the risk goes up, the return generally will go up
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What definition best explains and IRA
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The tax treatment on virtually any type of investment
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If you have $3000 invested in a Roth Aire, what is true about your contribution?
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You have already paid taxes on the money so it will grow tax-free
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Which of the following is a risk to consider when investing
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All of the above are risks
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If you own 50 shares of stock that you purchased for $40 a share, and the price increases to $70 per share your profit
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$1500
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The savings habit of been in Arthur best illustrate what principle of saving
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Both ANC
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What is the best way to buy a car
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0% financing on new or used
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Oil and gold
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Commodities
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Checking your bank statement against your account register
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Reconcile
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Fee for an overdrawn account
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Nonsufficient fund
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Bargaining for a lower price
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Negotiating
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Life insurance for a specified period of time
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Term life insurance
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With investments, as the rest goes up, so should the hopeful return
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Risk return ratio
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Place your emergency fund in this type of account
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Money market
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Movement of tax deferred retirement money from one plan to another
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Rollover
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The true cost of something in terms of what you give up
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Opportunity cost
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Combining separate debt payments into one single payment
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Debt consolidation
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The amount you pay annually, quarterly, or monthly for insurance
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Premium
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The value of your house over and above what you
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Equity
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Borrowing money and paying overtime
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Financing
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Most expensive way to finance a new car
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Leasing
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Experian, Trans Union, equifax
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Credit bureaus
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Spend every dollar of paper before the month begins
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Zero based budget
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Emotional, visual and has immediacy
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Cash
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Lists your personal, work in education history
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Resume
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Loan payments on the house
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Mortgage
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The availability of your money
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Liquidity
