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

Investment Strategies — Cumulative exam Answers

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Which statements correctly explain price floors and price ceilings? Choose four answers.Ineffective price floors tend to be too high.Ineffective price ceilings tend to be too low.Price floors help producers by raising prices.Price ceilings help consumers by lowering prices.Effective price floors are set above equilibrium.Effective price ceilings are set below equilibrium.

I
Ineffective price floors tend to be too high.
I
Ineffective price ceilings tend to be too low.
P
Price floors help producers by raising prices.
P
Price ceilings help consumers by lowering prices.
E
Effective price floors are set above equilibrium.
E
Effective price ceilings are set below equilibrium.
2
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The graph shows a point of equilibrium.If quantity demanded exceeds quantity supplied, what most likely needs to happen to achieve equilibrium?

Question illustration
T
The supply needs to increase
T
The price needs to decrease
T
The price needs to increase
T
The demand needs to increase
3

Which are considered types of credit available to borrowers? Check all that apply.personal loansbondscredit cardsmortgagescashauto loansgift cards

A
personal loans
B
bonds
C
credit cards
D
mortgages
E
cash
F
auto loans
G
gift cards
4

If the value of the US dollar declines in relation to other currencies, goods imported into the United States will

A
not be allowed to enter the country.
B
become less expensive.
C
remain the same in price.
D
become more expensive.
5

In a competitive market, an electronics company releases a smartphone that is much faster than older models. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating an innovative product.
6

Which body manages the Fed?

t
the Appropriations Committee
t
the Federal Reserve Board
t
the Federal Open Markets Committee
t
the Economic Policy Subcommittee
7

best

M
Many people could not buy new homes during a weak economy.
M
Many homes could not sell because housing prices rose too fast.
M
Many homes could not sell because banks charged high interest.
M
Many people could not make home payments during a weak economy.
8

What role do government agencies play in a mixed market economy?

T
They run shipping companies and other sources of distribution.
T
They own farms, factories, and other sources of production.
T
They regulate some aspects of production and distribution.
T
They employ most of the workers in the economic system.
9

To be successful, what must an entrepreneur be willing to invest? Check all that apply.moneyunemploymentpersonal safetytimeconsiderable effort

m
money
u
unemployment
p
personal safety
t
time
c
considerable effort
10

Which statement explains a way how the Securities and Exchange Commission upholds fair business practices?

T
The SEC makes sure that banks follow federal laws.
T
The SEC tries to limit risk in the financial system.
T
The SEC generally oversees banking practices.
T
The SEC generally oversees financial advisers.
11

The factors of production attempt to instill the idea that resources are

e
expensive.
s
scarce.
u
unlimited.
n
needed.
12

Read the sample advertisement.Lose body fat and feel healthier with our proven supplement, Edgozene! Losing weight is easy with Edgozene! Just take two pills before each meal. You’ll start to feel full and won’t eat as much. No other diet pill offers what our product does and, if you buy now, you can get two bottles of Edgozene for just $29.95!

A
for a limited time
B
two bottles for $29.95
C
our proven supplement
D
no other diet pill offers
13

similardifferentallrandom

A
similar
B
different
C
all
D
random
14

This graph shows changes in GDP and the unemployment rate in the United States in recent years.Which statement most accurately describes the trends shown on this graph?

Question illustration
W
When GDP falls, unemployment rises.
G
GDP and unemployment have little to do with each other.
W
When GDP rises, unemployment rises as well.
G
GDP and unemployment rise at times of world crises.
15

What are some benefits to private ownership? Select three answers.Private ownership provides offices for government workers.Private ownership provides land or goods for all citizens to use.Private ownership can make it possible for a business to earn money.Private ownership might help a person move to another economic class.Private ownership allows a person to own goods that may increase in value.

P
Private ownership provides offices for government workers.
P
Private ownership provides land or goods for all citizens to use.
P
Private ownership can make it possible for a business to earn money.
P
Private ownership might help a person move to another economic class.
P
Private ownership allows a person to own goods that may increase in value.
16

Which of these are goals of an expansionary policy? Check all that apply.increased available creditdecreased available creditincreased money supplyincreased inflationincreased interest ratesdecreased interest rates

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates
17

Motherboards, Inc., manufactures computer parts. The company’s total revenue is

t
the money the company earns after paying all of its production costs.
t
the total wages the company pays workers in its factories and stores.
t
the amount of money the company earns from selling an individual part.
t
the amount the company receives from the sale of all of its computer parts.
18

The graph shows the percentage changes in the investment rate and the gross domestic product (GDP) between 2008 and 2012.

Question illustration
A
can show if the economy is growing or shrinking.
B
occur only when the economy is shrinking.
C
occur only when the economy is growing.
D
have no relation to changes to the GDP.
19

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.
20

Which situation best reflects the concept of free enterprise?

A
Consumers have a choice between two bakeries in a single city block.
B
An agency determines which supplements are safe for people to buy.
C
Local officials set the prices for all the gas stations in a community.
D
The government decides the minimum wage for all airline workers.

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