Previous Year - FBLA Economics Test

Careful evaluation of alternatives is the best way to get the most from your money. (True or False)

True

The price of a product when it is new on the market is usually the highest it will ever be. (True or False)

True

The Department of Defense was the first to use the Internet. (True or False)

True

Businesses do not need to supply consumers with accurate information. (True or False)

False

The Right to Redress makes certain that consumers have a variety of goods and services from which to choose. (True or False)

False

A cover letter should encourage the employer to read your resume and increase your chances for obtaining an interview. (True or False)

True

If you cannot resolve problems with your job performance, it is best to resign before your employer fires you. (True or False)

True

Most young people do not qualify to use the simplest of the tax forms - 1040EZ. (True or False)

False

Employers pay twice as much social security and Medicare as their employee's share. (True or False)

False

It is financially more beneficial to save your money in a bank rather than let the government withhold more taxes than you think you will owe for the year. (True or False)

True

If you want to cut your spending, you'll have to start with your fixed expenses. (True or False)

False

The goals you set affect your family, future family, and community. (True or False)

True

Banks usually send reports of your checking account activity each month describing the activity on your account. (True or False)

True

The difference in the interest charged by banks on loans and the interest paid on money deposited is the bank's income. (True or False)

True

If you invest carefully, you don't have to take risks. (True or False)

False

Only what you like to do determines the vacation destination you should consider. (True or False)

False

Dieting taken to a dangerous extreme is an eating disorder that could threaten your life. (True or False)

True

The outpatient portion of a policy covers treatment after you have been admitted to the hospital. (True or False)

False

NAFTA requires that tariffs on most goods produced and sold in North America will be gradually increased. (True or False)

False

In practice, trade is completely free. (True or False)

False

A need is something that you desire to have because someone else has one. (True or False)

False

One of the problems in economics is that wants are unlimited. (True or False)

True

There are only two kinds of economic resources: human and capital. (True or False)

False

Labor is another name for human resources. (True or False)

True

Some resources, such as clean air and water, are limited. (True or False)

True

Scarcity is a problem that is faced by individuals and businesses but not by governments. (True or False)

False

Economic decision making is important to businesses and governments but not to individuals. (True or False)

False

Economic decision making is a process requiring four important steps. (True or False)

False

An arrangement that allows buyers and sellers to come together to trade goods, services, and resources is called a market. (True or False)

True

Determining which of its citizens should benefit from the production of goods and services is something each nation must decide. (True or False)

True

When the government hires new employees, it is participating in the marketplace. (True or False)

True

In a system of capitalism, the government decides what will be produced with the resources available. (True or False)

False

In the private enterprise system, you may start or invest in any business as long it is not illegal to do so. (True or False)

`True

The profit motive is designed to allow lazy owners to become rich. (True or False)

False

The three roles that everyone must perform are worker, consumer, and saver. (True or False)

False

Quantity demanded means the quantity of products and services that consumers are willing and able to buy at a particular price. (True or False)

True

Quantity supplied means the quantity of a product or service that businesses are willing and able to provide at a particular price. (True or False)

True

Success in your role as a worker will affect your standard of living. (True or False)

True

When you pay your taxes, you are performing your citizen role. (True or False)

True

Economic growth refers to a steady increase in the production of goods and services in an economic system. (True or False)

True

There are over 120 million workers in the U.S. economy. (True or False)

True

The GDP in our economy has declined steadily for the past few years. (True or False)

False

Changes in the business cycle form a pattern of good times to bad times and back. (True or False)

True

Recovery in the business cycle occurs after a period of inflation. (True or False)

False

The production process of getting goods to consumers usually requires only one business. (True or False)

False

A supermarket, a bank, and a utility company are all examples of businesses. (True or False)

True

Marketing involves just transporting and selling products. (True or False)

False

Marketing activities add value to a product. (True or False)

True

Building a specific, unique product for one customer is called processing. (True or False)

False

Mass production is not the standard of U.S. manufacturing. (True or False)

False

Service businesses are the fastest growing part of our economy. (True or False)

True

All businesses must raise capital, use human resources, and keep records. (True or False)

True

One of the eight marketing functions is risk management. (True or False)

True

Consumers often have a negative or narrow view of marketing. (True or False)

True

The marketing strategy is a two-step process. (True or False)

True

Buying motives can be rational or emotional. (True or False)

True

A wholesaler sells directly to consumers. (True or False)

False

If a company has a limited supply of a product, it may lower its price. (True or False)

False

Effective personal selling includes contact with the customer after the purchase. (True or False)

True

Another term for international business is foreign or world trade. (True or False)

True

Among the advantages enjoyed by the U.S. in world trade is our own production of wool and oil. (True or False)

False

It is necessary for the U.S. to import a variety of metals. (True or False)

True

There are a number of challenges involved with international trade, but currency exchange rates are not one of them. (True or False)

False

A limit set on the quantity of a product that can be imported or exported is called an embargo. (True or False)

False

A balance of payments and a balance of trade are the same thing. (True or False)

False

A business budget anticipates sources and amounts of income. (True or False)

True

Expenses include the total revenue minus operating costs of the small business. (True or False)

False

The most important step in financial planning is developing an income statement. (True or False)

False

In a small business, the budgeting goals are much the same as in a household--to determine what the sources of income are and how they will be distributed. (True or False)

True

Budgets identify the financial plans of a business. (True or False)

True

(Multiple Choice:) A purchase made on a whim without using a decision-making process is a(n) ____.

A) trade - off purchase

B) impulse purchase

C) option purchase

D) none of the above

B

(Multiple Choice:) The equilibrium price for a product is the price at which the quantity supplied is ____.

A) more than demand

B) less than demand

C) exactly equals the demand

D) none of the above

C

(Multiple Choice:) Under this type of economic system, people, rather than the government, own the resources and run the businesses. It is known as what kind of economy?

A) market

B) command

C) capitalist

D) both A and C

D

(Multiple Choice:) Gabe is a high school senior and has decided that he must begin to make some decisions about his own future. He makes a list of the things he hopes to accomplish in the next five years that include attending a technical school to learn welding, purchasing a used car, and saving money. These things he hopes to accomplish are considered his ____.

A) needs

B) wants

C) goals

D) values

C

(Multiple Choice:) For several generations Joaquin's family has produced and then sold beautifully handcrafted baskets in the local market. The basket-making skill is passed down from one generation to the next. Joaquin's family custom would best describe what type of economic system?

A) market economy

B) mixed economy

C) demand economy

D) traditional economy

D

(Multiple Choice:) Danielle wants to earn her living helping people and her community, so she decides to pursue a career as a sociologist. Her "want" in this particular case could be classified as her ____.

A) value

B) goal

C) work value

D) social value

C

(Multiple Choice:) Elisa types 90+ words a minute with less than two mistakes! With her ability she has decided that she will start her own in-home secretarial service. She decides to charge her clients $8 a page. Her cost to produce a typewritten page is $4 (cost of paper, ink cartridge, etc.). If she takes the $8 per page price and subtracts $4 per page cost, what will she determine?

A) profit

B) opportunity cost

C) demand

D) resources

A

(Multiple Choice:) After purchasing a personal computer, a consumer must obtain service from which of the following in order to be able to gain access to the Internet?

A) the gas and electric company

B) the computer store where the computer was purchased

C) an Internet service provider

D) none of the above

C

(Multiple Choice:) Which of the following would be a peripheral device?

A) keyboard

B) monitor

C) mouse

D) all of the above

D

(Multiple Choice:) If you subscribe to Internet service and plan to spend several hours per day logged on to the Internet, which of the following would be the best deal?

A) $20 per month - unlimited service

B) 50 cents per minute

C) $500 per year

D) none of the above

A

(Multiple Choice:) What creation occurring in 1993 gave ordinary people the ability to search the Web?

A) modem

B) Mosaic

C) Web - TV

D) Microsoft

B

(Multiple Choice:) The Diamond Shoe Company is about to launch a retail store on the Internet so consumers have the option of buying Diamond's shoes over the Internet. Diamond Shoe executives are concerned about consumers' privacy and the data that can be obtained through consumer's cookies. Which private organization can Diamond Shoe Company join to help its consumers know that it is not collecting data about Diamond's customers who purchase on its web site?

A) e-TRUST

B) Better Business Bureau

C) eBay

D) none of the above

A

(Multiple Choice:) A company's promise that the product will meet specific standards over a given time period is the product's ____.

A) packaging

B) freight bill

C) warranty

D) none of the above

C

(Multiple Choice:) Three months ago DeShawn purchased a CD player from a local music store in town. The salesperson told her that the CD player was guaranteed for one full year. DeShawn purchased the CD player. When she took it home she found paperwork stating that the CD player was in fact guaranteed for one full year. Further, she learned that the company would replace a defective product within that year at no charge as long as she could provide her receipt and would file a written claim with the company. This type of guarantee is known as a(n) ____.

A) implied warranty

B) limited warranty

C) full warranty

D) all of the above

C

(Multiple Choice:) Brown's Camera Store ran an advertisement offering self-loading 35mm cameras for $49.95. After seeing the advertisement, Andy drove to Brown's intending to purchase the advertised camera. Once there, however, the salesperson talked with Andy about his purpose for the camera and eventually convinced Andy that he really needed a more expensive model because the sale model was not really that good. This advertising technique is known as ____.

A) trading up

B) bait and switch

C) loss leader

D) fraud

A

(Multiple Choice:) The ability to work with numbers quickly and accurately is known as ____.

A) spatial aptitude

B) numerical aptitude

C) manual dexterity

D) none of the above

B

(Multiple Choice:) A recommendation of a person for a job given to an employer by someone the employer knows is known as a ____.

A) billboard

B) referral

C) trade off

D) none of the above

B

(Multiple Choice:) A sum of money for which an employee is eligible upon termination is ____.

A) a sign-on bonus

B) a bonus

C) severance pay

D) none of the above

C

(Multiple Choice:) Which of the following is something you should not do during an interview?

A) shake the interviewers' hand firmly

B) sit up straight

C) bite your nails

D) speak slowly and clearly, using proper grammar

C

(Multiple Choice:) Leticia has worked as an intensive care nurse at Memorial Hospital for almost three years. Last Friday, Leticia learned that her husband is being promoted and transferred to San Francisco. Leticia will quit her job and move with her husband and children to San Francisco. In order to receive a good recommendation from her manager at Memorial Hospital, what should Leticia provide her current employer?

A) thank you letter

B) severance letter

C) insurance letter

D) notice

D

(Multiple Choice:) Mark has finished his course work at a local technical college and is prepared to locate work as a computer maintenance technician. He found a newspaper advertisement for a job for which he feels qualified. The advertisement states: "entry-level computer maintenance technician needed to start immediately; apply directly to Celia Navarro, P.O. Box 697, Nashville, Tennessee 45219." What should Mark do to apply?

A) send his resume

B) include a cover letter

C) include a list of references

D) all of the above

D

(Multiple Choice:) Taxes on the sale of tobacco, gasoline, and alcohol are ____.

A) gift taxes

B) property taxes

C) excise taxes

D) none of the above

C

(Multiple Choice:) Pilar earns $26,200 before taxes working full-time as a police officer. She also earns an additional $9,600 before taxes working part-time on the weekends as a security guard at the apartment complex where she lives. Her combined income of $35,800 before taxes is known as her ____.

A) net income

B) gross income

C) taxable income

D) adjusted gross income

D

(Multiple Choice:) Huong has been saving money for two years in order to make a down payment on her first new car. She has looked at several different makes and models of both foreign and domestic cars. She finally located the "car of her dreams." Unfortunately her "dream car" is a foreign-made car and will cost her substantially more than a domestic-made car because the car is imported into the United States. In order to control the flow of products imported into the country, what does the US government and other governments impose on some imports?

A) business tax

B) import tax

C) duties or tariffs

D) excise tax

C

(Multiple Choice:) Last year Susana's mother, Maria, suffered from a heart attack and is no longer capable of caring for herself. Maria made arrangements with her attorney to have all her property sold and placed in an account to help Susana care for her. Maria then moved into Susana's home. Susana and her husband, Ramon, will now financially support and care for Maria. For Susana and Ramon's income tax purposes, Maria is considered to be a(n) ____.

A) dependent

B) deduction

C) exemption

D) none of the above

A

(Multiple Choice:) A planning document on which you record your expected income, actual income, and spending over a short time is a ____.

A) bank statement

B) checkbook

C) budget worksheet

D) none of the above

C

(Multiple Choice:) Things you hope to achieve in more than a year or two are ____.

A) short-term goals

B) long-term goals

C) budgets

D) none of the above

B

(Multiple Choice:) Which of the following items would be considered expenses?

A) clothes

B) car payment

C) telephone

D) all of the above

B

(Multiple Choice:) Which of the following is a fixed expense?

A) long distance telephone bill

B) transportation to work

C) monthly apartment rent

D) none of the above

B

(Multiple Choice:) Hector's decision to save $40 a week in order to buy a VCR in two months is considered a ____.

A) long-term goal

B) trade-off

C) short-term goal

D) budget process

C