AnswersOC27 Economics-2102310-Sem-MeadowsUnit Test

Unit 6 Test Answers

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61
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Purchasing power parity is used to compare the gross domestic product between

A
businesses.
B
consumers.
C
stock markets.
D
countries' currencies.
62
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Which is an example of an income deduction?

a
an unexpected salary cut
w
wages lost due to illness
v
vacation budget
r
retirement savings
63

Why should investors know the difference between nominal and real interest rates?

A
to know what they are likely to lose
B
to understand changes in monetary policy
C
to guarantee an investment’s profitability
D
to recognize the effects of inflation
64

What kind of advantage does a country have if it can make a product more efficiently?

A
an import advantage.
B
an export advantage.
C
a comparative advantage.
D
an absolute advantage.
65

How do long-term financial goals differ from short-term financial goals?

A
Long-term goals require more money than short-term goals.
B
Long-term goals are more stable over time than short-term goals.
C
Long-term goals are less attainable than short-term goals.
D
Long-term goals require less preparation than short-term goals.
66

Look at this monthly budget.Monthly Budget

Question illustration
A
$20
B
$10
C
$40
D
$30
67

When someone is considering a career as a lawyer, future earnings minus the cost of law school is the

A
net cost.
B
net benefit.
C
future cost.
D
future benefit.
68

Often duties and taxes are imposed on cars that are imported from other countries. What types of incentives are these duties and taxes?

A
positive incentive and subsidy.
B
negative incentive and subsidy.
C
positive incentive and tariff.
D
negative incentive and tariff.
69

Which statement best describes an education at a vocational school?

A
An employer typically pays for it in order to educate an employee.
B
It often lasts only months or weeks and is specific to only one job.
C
It usually takes two years to complete and tends to focus on technical training.
D
It lasts for several years, and it often takes four years to earn a degree.
70

Which trade organization is responsible for 90% of the world’s trade?

A
the EU
B
ASEAN
C
the WTO
D
NAFTA
71

The graph shows the effect of inflation.Approximately how much of the initial investment’s value would be lost after 15 years at 3% inflation?

Question illustration
A
15%
B
20%
C
40%
D
50%
72

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

A
Retail banks only serve businesses, while credit unions only serve individuals.
B
Retail banks operate in order to earn profit, while credit unions are nonprofit.
C
Retail banks only have small local branches, while credit unions are nationwide.
D
Retail banks manage a person’s money, while credit unions focus on providing loans.
73

When creating a budget, log fixed expenses

A
before income.
B
after income.
C
after savings.
D
at the top.
74

Which best describes the standards required of foreign producers?

A
Foreign producers have more stringent standards than domestic producers.
B
Foreign producers must meet the same standards as domestic producers.
C
Foreign producers must meet specific standards based on their origin.
D
Foreign producers do not use standards that harm consumers.
75

William is not generally a risk-taker, but he knows he may need to step out of his comfort zone to make enough money for retirement.Which investment option would best meet William’s needs?

A
a US savings bond
B
a savings account
C
a commodity
D
a certificate of deposit
76

How can a student pay for an education as part of a work-study program?

A
by taking a school job as part of a financial aid plan
B
by agreeing to work in the government for a scholarship
C
by agreeing to serve in the military after getting a degree
D
by working at a job that is close to the college or university
77

The graph shows the effect of inflation.Approximately how much of the initial investment’s value would be lost after 15 years at 3% inflation?

Question illustration
A
15%
B
20%
C
40%
D
50%
78

What is the most common reason why countries create trade agreements?

A
to limit imports
B
to create free trade
C
to establish quotas
D
to decrease trade
79

The graph compares the cost of living in three different cities.

Question illustration
A
San Francisco has the highest cost of living of the three cities.
B
Houston has the lowest cost of living of the three cities.
C
Workers in San Francisco can get by on a lower salary.
D
Workers in Cleveland face a greater struggle with a low salary.
80

How do government regulators protect consumers?

A
by investigating complaints made by lenders
B
by using borrower information responsibly
C
by disclosing accurate credit terms
D
by ensuring lenders comply with the law

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