AnswersOK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Investment Strategies

Investment Strategies — Cumulative exam Answers

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21
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In a free market system, price control can include both a floor and a .

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22
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In which situation would a savings account be the best investment to earn interest?

A
when you need to make frequent payments for bills
B
when you have to pay monthly installments for a loan
C
when you need immediate access to cash
D
when you want to buy a new car in 3 years
23

The graph shows a demand curve with the price of a good compared to the quantity demanded.What does this graph demonstrate?

Question illustration
A
the amount of microwaves produced increases the price
B
the amount of microwaves produced decreases the price
C
the price decreases with a larger quantity demanded
D
the price increases with a larger quantity demanded
24

In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new or better product.
25

Though it is seen as a last resort, bankruptcy allows a consumer to

A
temporarily stop paying debts.
B
eliminate certain types of debt.
C
easily reestablish good credit.
D
receive credit in an emergency.
26

What is one example of a closed economy?

A
a barter system that does not rely on money or other currency
B
a restricted system that blocks trade with international partners
C
a trade-based system that encourages the flow of goods and services
D
an old-fashioned system that preserves traditional choices and customs
27

Which best describes what happens to a corporation after its founders retire?

A
It shuts down operations.
B
It transfers to new owners.
C
It continues in business.
D
It sells out to shareholders.
28

Angela is considering buying stock in a popular computer software company whose price has dropped significantly in the last year. Why might this be a wise move for Angela to make?

A
because it is smart to buy when prices are high and sell when prices are low
B
because it is smart to buy when prices are low and sell when prices are high
C
because her investment will be guaranteed by the government if the company fails
D
because the company will rebound because she likes to use the products they sell
29

The chart shows pricing and payment options for two big-ticket items.

Question illustration
A
rent-to-own; installment
B
installment; rent-to-own
C
rent-to-own; rent-to-own
D
save up and pay cash
30

How do trade agreements help the countries involved?

A
by restricting imports
B
by accelerating production
C
by expanding tax revenues
D
by decreasing trade barriers
31

How does a socialist government with a command economy manage its economy?

A
The government lets producers set wages for workers.
B
The government owns all homes and other forms of housing.
C
The government allows consumers to make their own choices.
D
The government controls factories and other forms of production.
32

A certificate of deposit pays a higher interest rate than a savings account because the money is

A
guaranteed by the government.
B
kept by banks for a longer time period.
C
loaned to banks by consumers.
D
immediately available to consumers.
33

What is one way that technology can improve the production of goods?

A
Websites can allow consumers to purchase goods online.
B
Container ships can transport a number of goods at once.
C
Automation can create goods more cheaply and easily.
D
Airlines can send goods from one place to another.
34

Based on this paragraph, what factors can influence a person to donate? Choose two answers.

A
the time of year
B
a sense of urgency
C
the donor’s gender
D
a direct request for a contribution
E
a personal connection to an issue
35

Which are affected by the factors of production? Choose three answers.the demand of the itemthe availability of the itemthe cost of the itemthe quality of the itemthe popularity of the item

A
the demand of the item
B
the availability of the item
C
the cost of the item
D
the quality of the item
E
the popularity of the item
36

Jacob is considering buying a new car. Which nonrenewable resource should influence the decision?

A
labor
B
water
C
minerals
D
petroleum
37

If expansionary taxation policies are left unchecked, which is the most likely result?

A
reduced profits
B
high inflation
C
reduced production
D
reduced disposable income
38

The chart shows the marginal cost of producing apple pies.This chart demonstrates that the marginal cost

Question illustration
A
initially decreases as production increases.
B
initially increases as production increases.
C
eventually decreases as production increases.
D
eventually increases as production decreases.
39

What do the indicators used by economists reveal?

A
changes in production and demand
B
changes in employment levels
C
changes in prices
D
changes in the health of an economy
40

In a mixed market economy, what is a typical way the government can reduce unemployment?

A
The government can pay for projects to create work.
B
The government can control new factories to provide jobs.
C
The government can create new farm fields to hire workers.
D
The government can raise taxes to encourage employment.

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