AnswersOC27 Economics-2102310-Sem-MeadowsUnit Test

Unit 6 Test Answers

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1
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Money for a personal loan is usually issued to the borrower

a
as needed over time.
i
in small sums.
i
in one lump sum.
w
without collateral.
2
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One advantage to buying a CD is that it

A
can be purchased for different amounts.
B
is high risk but comes with great rewards.
C
can be used for long-term retirement.
D
is high risk but backed by the government.
3

What term is used to describe an individual's money and personal property?

A
budget
B
income
C
assets
D
finances
4

Credit unions differ from retail banks because they are

A
owned by their members.
B
owned by their employees.
C
owned and managed by private corporations.
D
owned by shareholders who purchased stock.
5

How easily an investment can be exchanged for cash is known as

d
diversification.
r
risk.
l
liquidity.
r
return.
6

When applying for credit, what information should borrowers research? Check all that apply.feesgovernment regulationsinterest ratesintroductory ratesrequired repayments

f
fees
g
government regulations
i
interest rates
i
introductory rates
r
required repayments
7

Why do developing countries usually have less variety in their economic activities?

A
Limited access to education means that people are not trained to work in industry or technology.
B
Focusing on one or two economic activities leads to more rapid economic development.
C
Developing countries are usually small and have limited populations and resources.
D
People prefer the lifestyle that accompanies traditional activities such as farming.
8

What is the definition of gross income?

A
amount of income saved per year
B
amount earned before deductions
C
amount of tax deducted from income
D
amount received after deductions
9

When the economy grows, the market grows, most likely because

A
more investors are willing to take risks.
B
the government has decreased spending.
C
the government has increased taxation.
D
investors have a greater desire for profits.
10

Which two factors have the greatest influence on risk for an investment? the demand for the investmentthe duration of the investmentthe history of the investmentthe importance of the investmentthe need for the investment

A
the demand for the investment
B
the duration of the investment
C
the history of the investment
D
the importance of the investment
E
the need for the investment
11

Look at the table below showing an example of a checkbook ledger.

Question illustration
A
Adrienne forgot to include the $2.00 ATM transaction fee.
B
Adrienne did not use $320.00 as her starting balance.
C
Adrienne deducted $23.50 from her balance instead of $32.50.
D
Adrienne did not enter her ATM withdrawal correctly.
12

Which of these qualify as variable expenses? Choose three answers.clothing purchasesloan paymentmonthly groceriesapartment rentmedical bills

A
clothing purchases
B
loan payment
C
monthly groceries
D
apartment rent
E
medical bills
13

The chart shows facts related to professional interpreters.

Question illustration
e
earned a degree from a four-year college at least.
r
received on-the-job training for several weeks only.
r
received on-the-job training for several months only.
e
earned technical training from a vocational school.
14

Which best describes the purpose of recording past income and spending in a budget?

A
to know the historic cost of goods
B
to serve as the basis for future planning
C
to learn why having savings is important
D
to learn why expenditures are likely to increase
15

These lists outline the details of two jobs.

Question illustration
f
family needs
j
job location
p
personal life
a
annual wages
16

locationtuitionindependenceproductivity

A
location
B
tuition
C
independence
D
productivity
17

Which best describes the purpose of recording past income and spending in a budget?

A
to know the historic cost of goods
B
to serve as the basis for future planning
C
to learn why having savings is important
D
to learn why expenditures are likely to increase
18

Missing one payment may cause borrowers to

A
need a credit report.
B
lose their collateral.
C
be charged a late fee.
D
need a down payment.
19

Why does an increase in literacy rates often accompany an increase in per capita income?

A
People who have higher-paying jobs often have the time available to develop literacy skills.
B
Developing countries have higher-than-average literacy rates, which typically leads to higher income.
C
People who can read and who receive an education are eligible for higher-paying jobs.
D
Developed countries often attempt to raise low literacy rates to improve income.
20

Which is the best question for Joe to ask himself when deciding whether to open a checking or savings account?

A
Is there an ATM near my home or work?
B
Does the bank offer free checking?
C
If I need a loan, will they give it to me?
D
Why am I opening a bank account?

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