AnswersDX Personal Finance ACumulative Exam

Cumulative Exam — Cumulative exam Answers

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1
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When entrepreneurs develop new products, other companies also experience growth because they

A
immediately copy the successful product.
B
create many companion products.
C
try to develop their own products.
D
attempt to improve the product.
2
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A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why?

A
The price will fall to encourage consumers to continue to purchase it.
B
The price will rise to encourage the producer to make more old models.
C
The price will fall to discourage the producer from making more old models.
D
The price will rise to encourage consumers to buy both models in equal amounts.
3

Which best defines a service?

A
a task that is performed in exchange for payment
B
an object that is acquired
C
a plan that is executed
D
an image that is drawn
4

What must people taking out a mortgage agree to? Check all that apply.a loan amountplans for repairsan interest raterenovation ideaspayment terms

A
a loan amount
B
plans for repairs
C
an interest rate
D
renovation ideas
E
payment terms
5

Which best describes why a company issues stocks?

A
to increase the company’s value
B
to ensure profits
C
to increase dividends
D
to raise capital
6

A commodity in which someone invests might include a

A
mutual fund.
B
natural resource.
C
thriving company.
D
certificate of deposit.
7

What is the best definition of profit?

A
Profit is the possible income from producing an additional item.
B
Profit is the price of producing one additional unit of a good.
C
Profit is the additional income gained from selling an additional good.
D
Profit is the financial gain from business activity minus expenses.
8

Emma is trying to decide whether to buy a new laptop. As a student, she has a budget and wants to make sure this is the right financial decision. Which question should she ask herself in determining the opportunity cost of this purchase?

A
What will I have to sacrifice if I buy this laptop?
B
Can I use credit to buy this laptop?
C
Do I need this laptop for my studies?
D
Is there a less costly alternative to buying this laptop?
9

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
10

Besides the actual mortgage payment, which also factors into the monthly payment on a home?

A
repair costs
B
renters' insurance
C
property taxes
D
down payment
11

Sean’s mother had to make an emergency purchase of a new tire because her tire went flat while she was traveling to the store. She is not sure how much money she has in her checking account. Which method of payment should she use to be financially responsible?

A
She should pay by telephone with her debit card.
B
She should pay with a debit card.
C
She should pay with a credit card.
D
She should pay with a check.
12

Which expenditure will be the same whether you lease or buy a new vehicle?

A
total cost
B
monthly payments
C
gas cost
D
required down payment
13

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
14

Carlos wrote a check for $44.92 to pay his gas bill. He’ll use the check register to record his transaction. What will be his new balance?

Question illustration
A
$345.09
B
$370.09
C
$434.93
D
$459.93
15

One common advantage of a long-term investment is

A
higher return.
B
no risk.
C
higher liquidity.
D
no liquidity.
16

Which is a long-term consequence of paying less than the minimum amount due on your bills?

A
There will be a late fee.
B
You will get a fee for having a negative balance in your checking account.
C
The number of payments will increase.
D
It will be harder to get a good rate on a mortgage when you buy a house.
17

Which is a desirable characteristic when choosing a line of credit?

A
rewards program
B
annual fee
C
amount of down payment
D
amount of collateral
18

W-2 formW-4 form1040 formtax return

A
W-2 form
B
W-4 form
C
1040 form
D
tax return
19

Nathan has $300 to open a checking account. He wants an account with the lowest fees. He plans on using the ATM machine, and his employer offers direct deposit.Bank Account Terms and ConditionsWhich checking account would be best for Nathan?

Question illustration
A
Account A
B
Account B
C
Account C
D
Account D
20

What budget allocation can be changed if you alter your daily spending habits?

A
rent
B
savings
C
insurance
D
car payment

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