Economics Review 1

Financial Planning

100

Which is a SMART goal? __________________________________________________________________________________ a. Save $150 to make a deposit on your spirit pack by February 10. __________________________________________________________________________________ b. Purchase a new pair of shoes by end of the semester. __________________________________________________________________________________ c. Invest 100 dollars in Sirius-XM stock. __________________________________________________________________________________ d. Buy a new laptop for college.

a. Save $150 to make a deposit on your spirit pack by February 10.

200

SMART goals: What's missing from this statement? Save $250 in 6 months to help pay for book expenses for my first semester in college at San Diego State. __________________________________________________________________________________ a. Specific __________________________________________________________________________________ b. Measurable __________________________________________________________________________________ c. Attainable __________________________________________________________________________________ d. Time bound __________________________________________________________________________________

d. Time bound

300

What is the purpose of goal setting in the financial planning process? __________________________________________________________________________________ a. to provide direction for planning and action __________________________________________________________________________________ b. to clarify goal ranges __________________________________________________________________________________ c. to differentiate between needs and wants __________________________________________________________________________________ d. to facilitate decision making __________________________________________________________________________________

a. to provide direction for planning and action

400

What are the two most important types of insurance you need at your young age? __________________________________________________________________________________ a. Liability and renters’ __________________________________________________________________________________ b. Travel and liability __________________________________________________________________________________ c. Automobile and disability __________________________________________________________________________________ d. Health and automobile __________________________________________________________________________________

d. Health and automobile

500

What can be considered the most important expense? __________________________________________________________________________________ a. Rent or mortgage payment __________________________________________________________________________________ b. Tuition for college __________________________________________________________________________________ c. Pay Yourself First __________________________________________________________________________________ d. Cell Phone __________________________________________________________________________________

c. Pay Yourself First

Resource & Scarcity

100

One of the most effective ways of helping an economy grow is to: __________________________________________________________________________________ a. improve the quality of human capital through education __________________________________________________________________________________ b. give people more time __________________________________________________________________________________ c. limit scarcity __________________________________________________________________________________ d. give people more money __________________________________________________________________________________

a. improve the quality of human capital through education

200

Economic resources includes: __________________________________________________________________________________ a. money, human capital, time, physical capital, entrepreneurship, land __________________________________________________________________________________ b. land, physical capital, entrepreneurship, human capital __________________________________________________________________________________ c. labor, natural resources, money, equipment __________________________________________________________________________________ d. job skills, time, buildings, workers __________________________________________________________________________________

b. land, physical capital, entrepreneurship, human capital

300

You can eliminate scarcity. __________________________________________________________________________________ a. True __________________________________________________________________________________ b. False __________________________________________________________________________________

b. False

400

Scarcity is only: __________________________________________________________________________________ a. a problem for poor people __________________________________________________________________________________ b. a relationship between wants and resources __________________________________________________________________________________ c. a cost when money is limited __________________________________________________________________________________ d. an issue when things aren’t abundant __________________________________________________________________________________

b. a relationship between wants and resources

500

Which of the following best summarizes the concept of scarcity?__________________________________________________________________________________ a. Life is so hard! __________________________________________________________________________________ b. Things are not fair. __________________________________________________________________________________ c. You can’t have everything you want. __________________________________________________________________________________ d. People are out to get you __________________________________________________________________________________

c. You can’t have everything you want.

Inflation & GDP

100

An increase of which of the following describes inflation?__________________________________________________________________________________ a. the price of oil __________________________________________________________________________________ b. the general price level __________________________________________________________________________________ c. the exchange rate of money __________________________________________________________________________________ d. the price of milk __________________________________________________________________________________

b. the general price level

200

Which one of the following is NOT a cause of inflation?__________________________________________________________________________________ a. quantity theory __________________________________________________________________________________ b. market-supply theory __________________________________________________________________________________ c. demand-pull theory __________________________________________________________________________________ d. cost-push theory __________________________________________________________________________________

b. market-supply theory

300

The largest component of the GDP equation is: __________________________________________________________________________________ a. Consumption __________________________________________________________________________________ b. Investment __________________________________________________________________________________ c. Government __________________________________________________________________________________ d. Exports __________________________________________________________________________________

a. Consumption

400

When the economy isn't experiencing economic growth, we are in a recession when GDP is decreasing for how long? __________________________________________________________________________________ a. 2 months __________________________________________________________________________________ b. 3 months __________________________________________________________________________________ c. 4 months __________________________________________________________________________________ d. 6 months __________________________________________________________________________________

d. 6 months

500

The difference between nominal and real data is: __________________________________________________________________________________ a. Nominal data is always higher than real data __________________________________________________________________________________ b. Nominal data is adjusted for inflation while real is not __________________________________________________________________________________ c. Nominal data comes in a form of a number while real in a form of percentage __________________________________________________________________________________ d. Real data is adjusted for inflation changes while nominal is not __________________________________________________________________________________

d. Real data is adjusted for inflation while nominal is not

Macroeconomics & Unemployment

100

The Labor Force Equation is: __________________________________________________________________________________ a. LF divided by Adult Population __________________________________________________________________________________ b. U divided by LF __________________________________________________________________________________ c. E plus U __________________________________________________________________________________ d. E divided by UR __________________________________________________________________________________

c. E plus U

200

When measuring the unemployment rate, part-time workers who are actively searching for a full time job are: __________________________________________________________________________________ a. considered employed __________________________________________________________________________________ b. are a part of the unemployment rate measurements __________________________________________________________________________________ c. considered unemployed __________________________________________________________________________________ d. are not a part of the labor force __________________________________________________________________________________

a. considered employed

300

The unemployment rate is calculated as: __________________________________________________________________________________ a. number of people unemployed divided by total population __________________________________________________________________________________ b. number of people unemployed divided by labor force __________________________________________________________________________________ c. labor force divided by total population __________________________________________________________________________________ d. labor force divided by number of people unemployed __________________________________________________________________________________

b. number of people unemployed divided by labor force

400

Sara, who is a high school freshman, is actively looking for work so she can start saving for college. She is classified as: __________________________________________________________________________________ a. Unemployed __________________________________________________________________________________ b. Employed __________________________________________________________________________________ c. Not In The Labor Force __________________________________________________________________________________ d. Discouraged Worker __________________________________________________________________________________

b. Not In The Labor Force

500

Economic growth should generate: __________________________________________________________________________________ a. inflation __________________________________________________________________________________ b. deflation __________________________________________________________________________________ c. employment __________________________________________________________________________________ d. unemployment __________________________________________________________________________________

c. employment

Fiscal & Monetary Policy

100

John Keynes is associated with what economic concept? __________________________________________________________________________________ a. Invisible Hand __________________________________________________________________________________ b. Fiscal Policy __________________________________________________________________________________ c. GDP Equation __________________________________________________________________________________ d. Quantity Theory __________________________________________________________________________________

b. Fiscal Policy

200

Which is NOT one of the tools of monetary policy? __________________________________________________________________________________ a. Discount rate __________________________________________________________________________________ b. Reserve requirement __________________________________________________________________________________ c. Open Market operations __________________________________________________________________________________ d. Interest rate reduction __________________________________________________________________________________

d. Interest rate reduction

300

Which of the following is an example of fiscal policy? __________________________________________________________________________________ a. The gov't lowers sales tax rate. __________________________________________________________________________________ b. The gov't increases spending on road construction. __________________________________________________________________________________ c. The gov't raises taxes on property ownership. __________________________________________________________________________________ d. All of the examples are correct __________________________________________________________________________________

d. All of the examples are correct

400

The Federal Reserve System helps regulate the __________________________________________________________________________________ a. money supply __________________________________________________________________________________ b. election process __________________________________________________________________________________ c. judicial system __________________________________________________________________________________ d. income tax collection __________________________________________________________________________________

a. money supply

500

According to fiscal policy, during times of high unemployment and slow economic growth, the gov't will do what? __________________________________________________________________________________ a. Sell bonds & increase interest rates __________________________________________________________________________________ b. Decrease gov't spending only __________________________________________________________________________________ c. Increase taxes only __________________________________________________________________________________ d. Decrease taxes & Increase gov't spending __________________________________________________________________________________

d. Decrease taxes & Increase gov't spending