Answers2027 Ignite Financial Literacy-Personal Finance - EL3403Credit and Loans

Credit and Loans — Unit test Answers

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2
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Which statement best describes the circular flow model?

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

p
paying taxes
h
hiring workers
r
repaying investors
p
producing goods
d
distributing goods
b
buying materials
4

Which types of investments are securities?

A
both debt and equity
B
debt only
C
equity only
D
neither debt nor equity
5

The simple interest on a loan of $200 at 10 percent interest per year is

A
$10 per year until the loan is paid off.
B
$15 per year until the loan is paid off.
C
$20 per year until the loan is paid off.
D
$25 per year until the loan is paid off.
6

The chart shows a range of credit scores.

Question illustration
A
find it easy to get a loan.
B
find it hard to get a loan.
C
get a loan with low payments.
D
get a loan with low interest.
7

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
T
There is no link between prices and unemployment.
R
Rising unemployment rates drive prices higher.
F
Falling prices drive unemployment rates lower.
A
As unemployment rates rise, average prices fall.
8

When production is very high but demand is very low, it can lead to

a
a recession.
a
a recovery.
p
prosperity.
t
the peak.
9

Which best describes what generally occurs in financial markets?

A
Debt and loans are traded.
B
Assets are traded.
C
Commodities are traded.
D
Shares are traded.
10

What are the signs of high inflation? Check all that apply.Production begins to fall.Production begins to rise.Interest rates decrease.Interest rates increase.Purchasing power falls.Fewer fixed rate bank loans.

A
Production begins to fall.
B
Production begins to rise.
C
Interest rates decrease.
D
Interest rates increase.
E
Purchasing power falls.
F
Fewer fixed rate bank loans.
11

Which unemployment rate do most economists consider to be acceptable in the United States?

A
0 percent
B
5 percent
C
10 percent
D
20 percent
12

Which factors can affect a stock’s price? Check all that apply.

A
market performance
B
the company’s financial health
C
the quantity products produced
D
location of the company
E
the economy
13

Read the scenario.Jay and Laura have been dreaming of purchasing their first home together. They've been diligently saving and have managed to accumulate a significant sum for a down payment.How does their decision to make a larger down payment benefit their financial situation as they purchase a home?

A
It increases the interest rate on the loan.
B
It decreases their credit score.
C
It increases the home’s value.
D
It decreases their monthly payment.
14

A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?

A
The society’s supply and demand have stagnated.
B
The society is using all of its resources efficiently.
C
The society’s needs are being fully met.
D
The society is not using all of its resources effectively.
15

best

I
Interest enables them to control the economy.
I
Interest helps them to satisfy customers.
I
Interest enables them to stockpile money.
I
Interest helps them cover business costs.
16

Capital appreciation refers to

t
the increased value of an asset.
t
the ability to make a profit from owning stock.
t
the distribution of earnings to shareholders.
t
the profitable sale of shares.
17

The graph shows unemployment rates in the United States in recent years.Which statement is the most accurate explanation of the information on the graph?

Question illustration
A
Unemployment rates rise and fall in predictable patterns.
B
Unemployment will never again be as high as it was in 2010.
C
The United States suffered an economic downturn starting in 2009.
D
The United States does not have to worry about unemployment.
18

Which body or group is most able to use money to influence the economy?

A
government
B
suppliers
C
firms
D
producers
19

The graph shows data for the years 2010 through 2012.Which might be a better title for this graph?

Question illustration
A
Total Exports for the United States and China
B
Trade Between China and the United States
C
Unemployment in the United States and China
D
The History of International Trade
20

These circle graphs show information about Bolivia’s workforce and GDP.Which statement summarizes the information on these graphs?

Question illustration
A
Many Bolivians are farmers, but agriculture makes a modest contribution to the GDP.
B
Industry in Bolivia has grown faster than the labor force can supply workers.
C
Bolivia has invested large sums of money into education to encourage economic growth.
D
Bolivia must depend on agriculture to have a healthy economic future.
21

Read the graph that displays mortgage interest rates between 1978 and 1983.In what year did consumers get the best deal on a mortgage?

Question illustration
A
1978
B
1980
C
1982
D
1983

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