Financial Literacy EXAM questions
with verified answers
EXAM 1 - correct answer ✔✔ ANSWERS
Economics is the study of how individuals and societies satisfy their unlimited wants with
limited resources.
a. True
b. False - correct answer ✔✔ a. True
When rising interest rates make borrowing more costly, how does it affect the business cycle?
a. It causes consumers to consume more and increases demand.
b. It lowers demand, decreases household purchases, and promotes contraction.
c. It causes conflicts overseas and reduces a nation's ability to import goods.
d. It increases productivity, raises employment, and leads to expansion. - correct answer ✔✔ b.
It lowers demand, decreases household purchases, and promotes contraction.
Marissa makes jewelry and sells it at local jewelry shops. She usually provides 15 pieces of
jewelry per store and sells them for $10. However, she finds out that the store owners, due to
popular demand, want to start selling her jewelry for $20. According to the law of supply, what
will Marissa do?
a. She will provide the same amount of jewelry for each store to sell.
b. She will start providing more pieces of jewelry for each store to sell.
,c. She will start creating carvings for each store to sell along with her jewelry.
d. She will start providing less pieces of jewelry for each store to sell. - correct answer ✔✔ b.
She will start providing more pieces of jewelry for each store to sell.
The Postal Service is an example of a geographic monopoly.
a. True
b. False - correct answer ✔✔ b. False
What is gross domestic product (GDP)?
the average rate of production that is used predict future uses of resources
b. the market value of final goods and services produced during a set time period
the statistical measures of income, spending, and output that are used to help people
understand information about a nation's economy
the study of a nation's economy as a whole - correct answer ✔✔ b. the market value of final
goods and services produced during a set time period
An economic system in which people make economic decisions based on customs and beliefs
that have been handed down from one generation to the next is a _____ economy.
command
market
c. traditional
mixed - correct answer ✔✔ c. traditional
Gross domestic product (GDP) is the market value of all final goods and services produced
__________ in a given time period.
, within a franchise
globally
between two nations
d. within a nation - correct answer ✔✔ d. within a nation
Which of the following is one of the six factors that can cause a change in demand?
a. labor productivity
b. number of producers
c. input costs
d. income - correct answer ✔✔ d. income
Drake has arranged his budget so that he has $30 to spend on comic books this month, and he
is planning on buying three new ones for $10 each. However, when he gets to the store, he sees
that the comic books he wants cost $15 each. According to the law of demand, what will Drake
do?
a. leave without buying any comic books
b. decide to borrow the comic books from a friend
c. buy two of the comic books he wants
d. ignore his budget and buy all three comic books - correct answer ✔✔ c. buy two of the comic
books he wants
If Brazil produces a product and then sells it to Peru, then that product is part of Brazil's _____
goods.
a. imported
with verified answers
EXAM 1 - correct answer ✔✔ ANSWERS
Economics is the study of how individuals and societies satisfy their unlimited wants with
limited resources.
a. True
b. False - correct answer ✔✔ a. True
When rising interest rates make borrowing more costly, how does it affect the business cycle?
a. It causes consumers to consume more and increases demand.
b. It lowers demand, decreases household purchases, and promotes contraction.
c. It causes conflicts overseas and reduces a nation's ability to import goods.
d. It increases productivity, raises employment, and leads to expansion. - correct answer ✔✔ b.
It lowers demand, decreases household purchases, and promotes contraction.
Marissa makes jewelry and sells it at local jewelry shops. She usually provides 15 pieces of
jewelry per store and sells them for $10. However, she finds out that the store owners, due to
popular demand, want to start selling her jewelry for $20. According to the law of supply, what
will Marissa do?
a. She will provide the same amount of jewelry for each store to sell.
b. She will start providing more pieces of jewelry for each store to sell.
,c. She will start creating carvings for each store to sell along with her jewelry.
d. She will start providing less pieces of jewelry for each store to sell. - correct answer ✔✔ b.
She will start providing more pieces of jewelry for each store to sell.
The Postal Service is an example of a geographic monopoly.
a. True
b. False - correct answer ✔✔ b. False
What is gross domestic product (GDP)?
the average rate of production that is used predict future uses of resources
b. the market value of final goods and services produced during a set time period
the statistical measures of income, spending, and output that are used to help people
understand information about a nation's economy
the study of a nation's economy as a whole - correct answer ✔✔ b. the market value of final
goods and services produced during a set time period
An economic system in which people make economic decisions based on customs and beliefs
that have been handed down from one generation to the next is a _____ economy.
command
market
c. traditional
mixed - correct answer ✔✔ c. traditional
Gross domestic product (GDP) is the market value of all final goods and services produced
__________ in a given time period.
, within a franchise
globally
between two nations
d. within a nation - correct answer ✔✔ d. within a nation
Which of the following is one of the six factors that can cause a change in demand?
a. labor productivity
b. number of producers
c. input costs
d. income - correct answer ✔✔ d. income
Drake has arranged his budget so that he has $30 to spend on comic books this month, and he
is planning on buying three new ones for $10 each. However, when he gets to the store, he sees
that the comic books he wants cost $15 each. According to the law of demand, what will Drake
do?
a. leave without buying any comic books
b. decide to borrow the comic books from a friend
c. buy two of the comic books he wants
d. ignore his budget and buy all three comic books - correct answer ✔✔ c. buy two of the comic
books he wants
If Brazil produces a product and then sells it to Peru, then that product is part of Brazil's _____
goods.
a. imported
