AnswersHSA 26-27 EconomicsInvesting and Financial Markets

Investing and Financial Markets — Unit test Answers

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21
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Which best describes the economic impact of defaulting on bank loans?

A
The economy suffers because banks have less money to loan to others.
B
The economy suffers because people have less money to spend.
C
The economy suffers because businesses are scared to take out loans.
D
The economy suffers because people are scared to take out loans.
22
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A
private
B
close
C
factor
23

How do bank loans help the nation’s economy?

A
They ensure consumer spending and confidence.
B
They ensure the success of new businesses.
C
They allow businesses to expand and improve.
D
They allow consumers to quickly pay off debts.
24

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
A
When GDP falls, unemployment rises.
B
GDP and unemployment have little to do with each other.
C
When GDP rises, unemployment rises as well.
D
GDP and unemployment rise at times of world crises.
25

Read the paragraph.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.Country M hopes to encourage economic growth by investing in

A
education to reduce unemployment and increase production.
B
new technologies to produce goods that are in great demand.
C
resources that can be traded with other nations.
D
research to develop goods that can be sold on a global scale.
26

As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Select two options.

A
cyclically unemployed
B
domestically unemployed
C
frictionally unemployed
D
structurally unemployed
E
still employed
F
unemployed
27

What role does the Federal Reserve play? Check all that apply.

A
Regulate the banking industry
B
Loan money to banks
C
Give individual loans
D
Give corporate loans
E
Transfers any profits to the Treasury
28

What is the name of the period when an economy begins to shrink?

A
recession
B
depression
C
recovery
D
peak
29

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.

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