Terminology
consumer good
Name the two types of federal payroll taxes, also known as FICA (Federal Insurance Contributions Act)
Social Security and Medicare
What is the full name--not the acronym--of the U.S. government institution that provides protection of your money held in a bank savings account?
Federal Deposit Insurance Corporation (FDIC)
Wilma borrows $10,000 from a title loan business after handing over the title to her car. What type of loan is this, a secured loan or an unsecured loan?
It is a secured loan.
What to produce.
How to produce.
For whom to produce.
What is the term for the sum of tangible goods that are scarce, useful, and transferable from one person to another, excluding services?
What is the total percentage of your gross income that is paid by you and your employer in Social Security tax?
12.4 percent.
You pay 6.2 percent and so does your employer.
True or False: Lending institutions like banks are allowed to loan out all of their deposits as long as they have insurance from the FDIC.
False. All banks must hold some of their customers' deposits "in reserve"--meaning they cannot loan out these monies. This is called a "reserve requirement."
Which type of financial institution is more likely to offer you an affordable loan, a bank or a credit union?
A credit union, because it is a not-for-profit financial institution.
What is the famous book written by the economic genius Adam Smith?
The Wealth of Nations (1776)
What is the name for the next best alternative use of money, time, or resources when one choice is made rather than another?
opportunity cost
What is the term used to refer to your taxable income, after taking the standard deduction?
Adjusted Gross Income (AGI)
True or False? If you are in the 24 percent marginal tax bracket you must pay a 24 percent federal income tax on all of your gross income.
False. You only pay federal income tax on the amount of money in each respective marginal tax bracket.
You have borrowed too much money and cannot repay your loans, so you file for bankruptcy. But you want to keep some of your assets such as your home and automobile. Which type of bankruptcy should you file for?
Chapter 13 Bankruptcy
Name all four factors of production.
Factors of production: productive resources needed to produce goods. The four factors are land, labor, capital, and entrepreneurship.
What is the name for the transfer of money from households to business and government through investments and loans?
capital formation
Which payroll tax has a ceiling on the income for which tax is owed?
Social Security
There is no ceiling on Medicare taxes
What is the official name or acronym of the Social Security insurance program?
For what type of student loan will the government pay your interest until after you graduate from college?
Subsidized student loan.
The solution to the paradox of value can be found in Adam Smith's insight that in order for something to have value, it must have both scarcity and _________.
utility
Provide an example of a capital good.
A capital good is a tool or good such as machinery or equipment that is used by businesses to produce other products.
When you file your annual tax return, you must make a choice to either take the standard deduction or ____________ deductions.
itemized
On August 15, 1971, President Nixon declared that the United States would no longer redeem any dollars for _________.
Nixon eliminated the "gold standard," the system in which the basic unit of currency is equivalent to and can be exchanged for gold.
According to your textbook, in general how much should you spend on monthly rent?
However much you earn in a week.
Define "economics."
The social science dealing with how people satisfy seemingly unlimited and competing needs and wants with careful use of scarce resources.