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Economics: Unit 3 Review Flashcards | StudBud
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Economics: Unit 3 Review
Economics: Unit 3 Review
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Answers
1
In general, the greater the expected return, the greater the
cost
opportunity
risk
chance
2
Which of the following is the best way to minimize your risk when investing?
buy stocks in foreign stock exchanges
purchase stocks that do not pay dividends
invest in one company
diversify your investments
3
This type of tax takes a larger percent of income from higher income individuals
Sales
Progressive
Regressive
Proportional (Flat)
4
When money you are saving is put into an account or asset that earns interest, it is called
budgeting
income
investing
spending
5
Which of the following occurs when wages increase?
The quantity of labor supplied decreases
Thenumber of workers employed by the government increases
The minimum wage falls
The quantity of labor demanded decreases
6
Which type of insurance offers financial protection to the owners, drivers, and passengers of a car in case of accidents
Life
Automobile
Health
Disability
7
All the following are true regarding the circular flow model EXCEPT
individuals supply resources in the resource market
businesses sell goods and services in the product market
the government buys goods and services in the product market
businesses sell resources in the product market
8
A/An ________________ is an entity that acts as the middleman between two parties in a financial transaction.
financial institution
brokerage
exchange
market
9
Which insurance pays for damages to the holder’s real estate or injuries that occur on the policy holder’s property?
Health
Life
Property
Disability
10
Interest that is earned on the principal and any previously earned interest is called
simple interest
interest- earning interest
doubling interest
compound interest
11
The supply for labor shows a(n) ______ relationship between wages and the number of workers that want a job.
Complicated
Temporary
Inverse
Direct
12
Bank and credit unions offer many of the same services. One key difference between a bank and a credit union is
credit unions only offer savings accounts and lines of credit.
credit unions are open to any customers while bank are only open to member
banks are open to any customers while credit unions are only open to member
banks only offer investments accounts and lines of credit.
13
Which type of investment option represents direct ownership on a company and may pay dividends to investors?
stocks
bonds
money market mutual fund
certificate of deposit
14
Which of the following will most likely increase the wages of car mechanics?
A decrease in the demand for cars
An increase in the number of schools that train car mechanics
An increase in the number of people that fix their own cars
A decrease in the number of qualified car mechanics
15
A minimum wage is
a wage ceiling placed below the equilibrium wage
a wage floor placed below the equilibrium wage
a wage floor placed above the equilibrium wage
a wage ceiling placed above the equilibrium wage
16
This type of investment option pools an investor’s money with other people to buy a variety of stocks and bonds:
bonds
certificate of deposit
stocks
money market mutual fund
17
Which of the following will most likely increase the supply of lawyers?
A decrease in the wages of lawyers
A decrease in the demand for lawyers
A decrease in the price of law schools
A decrease in the number of people that go to law school
18
Which of the following will most likely decrease the demand for pet groomers?
A decrease in the wages of pet groomers
A decrease in the demand for pets
An increase in the productivity of pet groomers
An increase in the number of qualified pet groomers
19
This type of investment option is like a loan, the debt that the government or corporation must repay to an investor
certificate of deposit
stocks
bonds
money market mutual fund
20
The idea that hiring extra workers will result in each worker eventually producing less additional output is called
the law of supply
derived demand
the law of diminishing marginal returns
the law of demand
21
Which type of insurance protects against financial loss caused by the costs of illness or accident?
Disability
Health
Life
Automobile
22
Which of the following is true regarding the labor market?
Businesses supply labor in the labor market
The government sets wages in the labor market
Individuals demand labor in the labor market
Businesses demand labor in the labor market
23
A plan designed to help manage money by monitoring income and tracking expenses is called a
Planner
Portfolio
Budget
Tracker
24
This type of investment option deposits funds into an account for a specified period of time:
certificate of deposit
stocks
bonds
money market mutual fund
25
This is the amount that you pay monthly or annually for your insurance:
Credit
Deductible
Co-pay
a. Premium
26
According to the circular flow model, individuals
demand resources in the product market
produce goods and services for consumers
provide resources in the resource market
tax businesses
27
Education and training will result in all the following EXCEPT
higher wages for workers
a decrease in human capital
innovation
more productivity
28
A decrease in the demand for carpenters will
increasethe number of people that want to become carpenters
increase the demand for wood
decrease the wages of carpenters
increase the number of carpenters employed by the government
29
The 3 “C’s” of creditworthiness are
a. Character, Competency, Circumstances
a. Character, Capacity, Competency
a. Capacity, Collateral, Competency
a. Character, Capacity, Collateral
30
Which type of insurance provided financial protection to a family when the policy holder dies?
Disability
Life
Automobile
Health
31
The amount you pay your insurance company before any benefits are paid to/for you is called the
Credit
Deductible
a. Premium
Co-pay
32
According to the circular flow model, businesses
provide public goods
produce goods and services for consumers
tax individuals
produce resources for individuals
