Primavera Economics 2023 Review Questions with Complete Solutions

Primavera Economics 2023 Review Questions with Complete Solutions What are some examples of the benefits that come from understanding personal finance? (Select all that apply.) Knowing the difference between debit and credit cards, Understanding every choice has a cost, either positive or negative. What is the best time to start planning for retirement? As early as possible. Read the following two questions. Should we have retail stores, or sell our product entirely online? Should we have other retailers sell our product? Which of the four Ps of marketing can answer these questions? Place. Which type of expense does not change based on use of volume? Fixed. Read the scenario. Jim needs to pay his bills this month. His bills include rent, car loan, groceries, car insurance, health insurance, student loan, and movie tickets. What are Jim's variable expenses? Groceries and movie tickets. What is Jane Doe's monthly income? $1,200.00. What is Jane Doe's largest fixed expense? Rent. What is the total amount of Jane Doe's utility bills? $55. How does the minimum balance at an investment bank differ from minimum balance at a traditional bank or credit union? An investment bank requires a higher minimum balance. What is term for taking out more money than an account holds? Overdraft. Which of the following are secured loans? (Select all that apply.) Mortgage, Auto loan. What factors are used by credit agencies to determine a person's credit score? (Select all that apply.) New applications to credit, Payment history, Debt-to-credit ratio. Read the scenario. Jill has a credit score of 810, whereas Jack has a credit score of 560. They both apply for a $200,000 home loan. Based on the information given, which statements are correct? (Select all that apply.) Jill will receive a lower interest rate than Jack, Jill will have lower monthly payments than Jack. Why is life insurance important to individuals or families? (Select all that apply.) It protects against an unexpected event, It can provide money to pay for bills. On the W-4 form, which item allows you to decrease money withheld from your paycheck? Allowances. What advantages does a free market encourage? (Select all that apply.) Competition, Innovation. Read the scenario. Ethan is looking to start a business. He has the raw materials to make necklaces in the basement for $10 each. What is he missing from the economic equation? FOR WHOM to produce. Who wrote a book promoting a laissez-faire approach to economics? Adam Smith. Which economy fits best in underdeveloped areas that are agriculture based? Traditional. What is the primary role of producers in the marketplace? To provide a supply of goods and services. What is the term for a lack of competition in a market economy? Monopoly. What are characteristics of a free enterprise system? (Select all that apply.) Private property, Profit motive, Competition. Which business model is the easiest to create? Sole proprietorship. A(n) [blank] is a simple business structure in which two or more people own a business together. Partnership. What is the relationship between price and demand? Inverse. Which option accurately describes an elastic good? The price of a luxury car increases; demand decreases. Why would supply increase even if prices stay the same or go down? (Select all that apply.) Faster production, Improved technology. When demand remains high but supply does not increase, what will happen to the price? It will increase. What is the term for giving a fixed amount of a good to people? Ration. A price floor guarantees profits for the retailer, but what is the possible downside? A consumer's potential buying power is limited. What is one way the government can prevent a monopoly? By pushing antitrust legislation through Congress. Read the sentence. When a few large firms dominate the market it is known as a [blank]. Which term best completes the sentence? Oligopoly. Read the sentence. [Blank] competition refers to a marketplace in which many firms offer identical, or nearly identical, products. Which term best completes the sentence? Perfect. Which is the best example of public disclosure? A pharmaceutical company provides information about a drug's side-effects. Read the sentence. The [blank] was founded in 1914, to prevent anticompetitive, deceptive, and unfair business practices. Which term best completes the sentence? Federal Trade Commission. Read the sentence. The FTC ensures free and open markets through the enforcement of [blank] laws. Which term best completes the sentence? Antitrust. Labor unions were created to help protect against which groups? Robber barons. What are arguments against raising the minimum wage? (Select all that apply.) A higher minimum wage results in higher prices for consumers, A higher minimum wage creates a surplus of labor. Which is defined as a plan for spending your money to meet your wants and needs? Budget. A [blank] card allows its user to purchase goods and services electronically by deducting funds directly from their checking account. Debit. What are the four Ps of marketing? (Select all that apply.) Promotion, Product, Place, Price. [Blank] income is defined as income available after taxes and other mandatory expenses. Disposable. Which term is defined as the ability of a borrower to receive money from a lender and then pay that amount, plus interest and / or fees, back the lender in the future? Credit. A(n) [blank] loan requires the borrower to write a postdated check for the amount requested, in addition to a fee, in exchange for cash. Payday. What is the term for a situation in which society does not have enough resources to produce all of the things people want or need? Scarcity. Read the statement. Microeconomics studies the impact of individual and business decisions on economic markets, while macroeconomics studies the economy as a whole. Is this statement true or false? True. What concept was proposed by Adam Smith in his book The Wealth of Nations and discussed the benefits to society of people pursuing their individual interests? Invisible hand. The [blank] Act was signed in 2012, giving private companies more access to capital and making it easier for certain companies to go public on US stock exchanges. JOBS. [Blank] is a political system that favors an economic structure run by businesses and individuals rather than by the government. Capitalism. [Blank] elasticity is a measure that demonstrates how producers respond to changes in price of products and services. Supply. A price [blank] is defined as barring prices from exceeding a certain maximum. Ceiling. Minimum wage is an example of a price [blank] structure. Floor. What is the term for the rise in the general level of prices for goods and services? Inflation. What is the term for securities sold by a corporation in exchange for shares of ownership in the company? Stocks. Which best defines gross domestic product? The total value of goods and services produced by a nation. If the value of what a country exports is greater than what it imports, this is known as a trade [blank]. Surplus. Most economists agree that the three criteria of effective taxes are equity, efficiency, and _[blank]_. Simplicity. Which tax system increases the tax rate as a person's income increases? Progressive. What impact could taxes have on the economy? Higher taxes would decrease demand. Determine if the statement is true of false. False. How can a military base impact a local economy? New businesses can open up that support the base. Which choices are examples of mandatory federal spending? (Select all that apply.) Social Security, Health care. Which is a cause of the debt accumulated by the federal government? Deficit spending. Which spending is set by law and cannot be altered? Mandatory. Which form of currency was eventually abandoned because of its ability to be duplicated? Wampum. Which aspect of the Banking Act of 1863 forced many state banks out of business? State banks had to pay a 10 percent tax on their currency. When does a stockholder earn profit from a capital gain? When a stock is sold at a higher price than was paid to buy it. Read the statement. A share of profits owed by a company to a stock shareholder is called a(n) _[blank]_. Which accurately completes the sentence? Dividend. What is the Dow Jones Industrial Average? It is a stock index used to measure the performance and price of stocks. What does gross domestic product (GDP) measure? The total value of all goods and services produced within a country's borders. What does an increased population that does not produce mean for overall GDP? GDP per capita will decrease. Which is removed when looking at real GDP? Inflation. Determine if the statement is true or false. Inflation reduces purchasing power for the consumer. True. Why would the government raise interest rates? To slow down the economy and control inflation. Who decides how much money should be released into circulation, thus regulating monetary policy? Federal Reserve. Who is responsible for printing money in the United States? Treasury Department. What can a nation do if its economy does not produce a product very efficiently? Engage in global trade to obtain the product from a nation that produces it efficiently. Which is often a positive effect when people from different parts of the world interact with one another through global trade? Diffusion of culture and ideas. What is a tariff? A tax on goods coming into or leaving a country. What were the results of the Smoot-Hawley Tariff? 20,000 imported goods were taxed, resulting in a trade freeze. Which are examples of inequality in developing countries? (Select all that apply.) Lending institutions cater only to the wealthiest members of the population, Education is often reserved for the wealthiest members of society. Which represent challenges posed by rapid population growth in developing countries? (Select all that apply.) Health care and education would be in short supply, Food and water supplies become strained. How do some countries deal with a lack of natural resources? By engaging in international trade.