Intro to econ
Incentives
something that motivates a change in behavior. Ex. a sale at your favorite store, the loss of your cell phone for a poor report card is an incentive to earn good grades, the privilege of driving for acceptable grades/good behavior/ etc..
Banks use savings account deposits to:
give loans to consumers and businesses
A factor that is likely to affect the market price of a stock is:
Corporate profits
The primary sources of income for most people between the ages of 20 and 35 who are not living on a pension or social security are:
Salaries, wages, and tips
You have a $2,000 loss. Your insurance company pays you $1,500 on the claim for the loss. The $500 the insurance did not pay is a result of your policy having a:
Deductible
What describes this sentance: If you go to the movies instead of a football game on friday, your choice is the movies and what you gave up is the football game
Opportunity cost
Why is term life insurance usually the least expensive type of life insurance?
The policy only pays a death benefit
What is a credit score?
A number used to determine how much credit to extend to a person.
Which documents should be stored in a safe-deposit box?
Mortgage loan papers.
Which statement is FALSE about most ATM (Automated Teller Machine) cards?
You can always get cash anywhere in the world with no fee.
What is scarcity?
In simple terms, scarcity means there isn't enough of something to satisfy everyone who wants it, leading to choices and trade-offs.
Neil will be traveling by air in Southeast Asia for a six-week vacation. Which step will not provide protection during the trip?
Take his passport
Carmen sold her stock in ABC company for a higher price per share than she bought it for. She realized a:
Capital gain
Which factor would most likely lead to an increase in the interest rate on a person’s credit card?
Late payments.
Which financial product can you buy for $25, is safe, and will be worth $50 at a future date?
Series EE savings bond
Consumers who file for bankruptcy are still responsible for:
Tax claims and student loans
Joan wants to open a checking account and wonders if checking accounts pay interest. How would you answer her question?
Some types of checking accounts pay interest
When Lucy was born, her grandparents gave her a Series EE savings bond that will be worth $1,000 at maturity. Her grandparents paid:
$500 for the bond
John has a college student loan that he has to repay after he graduates. He will make his monthly payments over ten years. He has the following kind of loan:
Installment
Patty is selling her car through a newspaper advertisement. When she finds a buyer, she wants a form of payment which is guaranteed to be good. Which form of payment should she avoid?
A check
Mutual funds are:
An investment that holds a wide range of different investment instruments, providing diversification
New coins and currency make their way into the general economy, consumers and businesses, through the distribution system of the:
Federal Reserve System
Identify the background color of a U.S. $5.00 bill.
Automobile
If a business wants to raise capital but not create debt, it can:
Issue common stock
Who uses consumer credit reports in making decisions?
Lenders