Earning Income — Test Answers

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1
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In the government, many public policy decisions are made by elected officials who

A
always try to eliminate the economic pressures felt by the people who voted them into office.
B
are directly impacted by the economic decisions they make when they pass new public policies.
C
only support policies that have widespread acceptance by everyone in their state or district.
D
don’t face the same economic pressures as the individuals who are impacted by their decisions.
2
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Which best defines digital currency?

A
Money online that uses cryptography and blockchain technology.
B
Money exclusively used for video games and virtual worlds.
C
Digitized images of physical bills and coins.
D
An online payment system with instant bank transfers.
5

A restaurant worker earns a set amount per hour from their employer. They also receive tips from customers. Their earnings most closely resemble those of which of these?

A
an employee working on a piece-rate basis
B
an employee working on commission plus salary
C
an employee working on straight commission
D
an employee working on a fixed salary
6

What is the most important thing people must do to understand the opportunity costs for any big economic decision they make?

A
They must look at the time required to make the decision and see it come to pass.
B
They must investigate both the explicit and implicit costs involved in the decision.
C
They must enlist the support of everyone involved in making the decision a reality.
D
They must make an accurate budget and make sure there is enough money available.
7

What is the first question people should ask themselves when they’re about to make an economic decision?

A
“What will others think of me if I get this?”
B
“What will I be giving up in the future to get this?”
C
“How much do I value or need this?”
D
“What do I have to give up now to get this?”
8

How do banking transaction regulations differ from credit card regulations?

A
Banking transactions have to prevent fraud.
B
Banking regulations cover more financial activities.
C
The Fair Credit Reporting Act applies to credit cards.
D
Credit cards are watched for money laundering.
9

Bank deposits help the nation’s economy by

A
giving consumers the ability to save money.
B
providing protection for banks on investments.
C
giving banks the money to loan and invest.
D
providing protection for consumers from theft.
10

What role does the Federal Reserve play? Choose three correct answers.

A
Give individual loans
B
Loan money to banks
C
Transfers any profits to the Treasury
D
Regulate the banking industry
E
Give corporate loans
11

How are the regulations for Electronic Fund Transfers (EFTs) different from those for Peer-to-Peer (P2P) payments?

A
P2P services can't keep credit card details, unlike EFTs.
B
All EFTs and P2P payments are regulated by credit card rules.
C
P2P payments, but not EFTs, are controlled by the Fair Credit Reporting Act.
D
Both EFTs and P2P payments are covered by the Electronic Fund Transfer Act.
12

Which best describes the role of the US government in economic decisions involving health care?

A
The government spends a lot of money on healthcare programs for people ages 65 and older, people with disabilities, and people living in poverty.
B
The government spends very little money on health care so Americans must all pay their own healthcare costs out of pocket.
C
The government covers medical and healthcare costs for all Americans so that everyone can get the same level of care.
D
The government follows voters’ wishes to decide how much money is spent per person on healthcare programs and medical treatment.
13

Alex has not been keeping his banking records up to date. On his latest bank statement, he found that he had been charged an overdraft fee for writing a bad check. In addition to his being charged a fee, which of these is another possible consequence of an overdraft?

A
The merchant who received his check will be charged an overdraft fee.
B
The bank will cancel his debit card.
C
The bank will close the merchant's account.
D
The merchant who received his check will expect repayment and a penalty fee.
14

How do Peer-to-Peer (P2P) payment systems compare to digital wallets in terms of storing payment information?

A
Digital wallets store many types of payment info, but P2P systems do not.
B
P2P systems need payment info updates often, while digital wallets may not.
C
P2P systems store loyalty card details, but digital wallets do not.
D
Digital wallets and P2P systems cannot store credit or debit card numbers.
15

Which example best describes how a bank injects money into the economy?

A
A bank buys a company’s rapidly growing stock.
B
A bank buys property in a bustling business district.
C
A bank approves a loan for a customer.
D
A bank opens a savings account for a customer.
17

Which is an accurate description of digital currency?

A
A government-controlled online currency like electronic cash.
B
A bank-approved electronic version of paper money for certain banking apps.
C
A type of money used everywhere without needing internet access.
D
A currency that uses online networks and offers privacy.
18

What is a major difference between retail banks and credit unions?

A
Retail banks manage a person’s money, while credit unions focus on providing loans.
B
Retail banks only have small local branches, while credit unions are nationwide.
C
Retail banks operate in order to earn profit, while credit unions are nonprofit.
D
Retail banks only serve businesses, while credit unions only serve individuals.
20

What is the major difference between a nationwide bank and a community bank?

A
The nationwide bank has fewer branches.
B
The community bank services only local customers.
C
The nationwide bank services only local customers.
D
The community bank offers more services.

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