Answers26-27 Ignite Economics-KY-EconomicsInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

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1
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Which is the most liquid form of money?

A
cash and currency in circulation
B
investment accounts
C
savings accounts
D
demand accounts
2
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Which of the following best describes the circular flow model?

A
The model represents the movement of money throughout the economy.
B
The model represents the interactions within sectors.
C
The model represents the flow of goods and services between sectors.
D
The model represents the changing relationships between actors.
3

What term is used in macroeconomics to describe the total supply and the total demand?

c
capital
i
inflation
a
aggregate
e
equilibrium
4

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.
5

Cost-push inflation occurs when

A
consumers begin purchasing more goods.
B
producers need more money to make and distribute goods.
C
the government prints more money and pushes prices up.
D
consumers have more money to spend on goods and services.
6

How do consumers’ feelings about the economy help contribute to growth?

P
Positive consumer attitudes influence spending habits.
P
Positive consumer attitudes increase job prospects.
P
Positive consumer attitudes inspire increased production.
P
Positive consumer attitudes can end a depression.
7

are debt certificates that are purchased by an investor.

Answer not available
8

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.
9

In the circular flow model, factors of production flow to firms. Which of the following are the primary factors of production? Check all that apply.laborcapitalgoodslandservices

A
labor
B
capital
C
goods
D
land
E
services
10

One fact about all currency is that it

A
loses value over time.
B
has a changing value.
C
maintains a stable value.
D
grows increasingly valuable.
11

Which best describes why investing can be such a challenge?

A
It is impossible to ever earn a return on investments.
B
Investing always requires millions of dollars up front.
C
There are no guaranteed investments.
D
Most investments are insured by the government.
12

What advantages does money have over bartered goods? Check all that apply.

A
Money is easy to earn, and bartering takes a lot of work.
B
Money has a set value, and bartered goods do not.
C
Money is more portable than bartered goods.
D
Money is always worth more than bartered goods.
E
Money allows people to easily store value they earn.
13

When individuals are looking for jobs but are unable to find work, they are said to be .

Answer not available
14

Government officials in Country M have determined that they need to take action to encourage the growth of their economy. To do this, they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who sign a contract agreeing to work within their specific industry for the next ten years.

e
education to reduce unemployment and increase production.
n
new technologies to produce goods that are in great demand.
r
resources that can be traded with other nations.
r
research to develop goods that can be sold on a global scale.
15

What are the signs of low inflation? Check all that apply.Demand steadily rises.Demand steadily falls.Prices continue to increase.Prices continue to decrease.The economy grows in a healthy way.The economy stagnates and struggles.

D
Demand steadily rises.
D
Demand steadily falls.
P
Prices continue to increase.
P
Prices continue to decrease.
T
The economy grows in a healthy way.
T
The economy stagnates and struggles.

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