Economics 2nd Summative Assessment

UTHS

Credit Union

Financial institution with fewer branches than commercial banks, but which pays higher interest rates and charges lower fees.

Checking Account

Banking account that allows you to make unlimited withdrawals, but pays no interest rate.

Money Market Account

Banking account that pays an interest rate, but limits you to a set number of withdrawals per month.

Certificate of Deposit

Banking account that pays a fixed interest rate, but which prohibits withdrawals until the end of its term.

Savings Account

Account that pays interest, but which prohibits withdrawals by check or debit card.

ATM Fee

A charge you pay for withdrawing money out of a money machine not owned by your bank.

401(k)

Employer-sponsored retirement account where the employer will match the funds that you invest.

Traditional IRA

Investment account for retirement. Money placed into it can be deducted from your taxable income.

Roth IRA

Investment account for retirement. Government will not charge income tax on profits taken out of the account.

Insurance

Safety program purchased for homes, cars, and other property to reimburse you in case of damage or loss.

Mortgage

Loan taken out to purchase a home.

Credit Score

A rating that determines whether or not an individual will be approved for loans, and what interest rates they will pay.

Bankruptcy

Legal proceeding where a person attempts to have their debts cleared. Goes on their credit score for ten years.

Checking Account

In which of the following types of bank accounts would your money have the most liquidity?

Certificate of Deposit

Which of the following types of bank accounts would offer you the most interest on your money?

True

True or False: Your bank can charge you a fee if you use a 3^rd-party ATM machine to withdraw money from your checking account.

False

True or False: The federal government does not allow banks to charge you a fee if there is too little money in your checking account.

How much salary an employer will offer

Your credit score can be used to determine all of the following except _____.

Being late on your loan payments, or not paying them at all.

Which of the following would affect your credit score the most?

1. Leaving a credit card account open for too long.

2. Having a low-paying job.

3. Living in your parents' household.

4. Being late on your loan payments, or not paying them at all.

False

True or False: When making a personal spending budget, you should save for retirement before paying the minimum payments on any loans.

True

The highest priority in your personal spending budget should be on the essentials of shelter and food.

 

Renting a home

Which living situation has more flexibility in terms of moving?

Renting a home

Which living situation will be cheaper in the short term?

Buying a home

Which living situation will be cheaper in the very long term?

True

True or False: You do not have to pay back federal student loans until after you graduate from college.

FAFSA

The free application you fill out to qualify for federal grant, work-study, and loan money.

GDP would decrease because Consumption has increased.

New car sales decrease across the nation

Decrease due to businesses investing less.

Businesses decide to decrease their workforce by 2%.

Decrease due to the rise of imports, which gets subtracted from GDP.

Americans begin importing robot pokemon from Japan like crazy.

No effect, 2^nd hand goods do not count for GDP

Used smartphone sales on Ebay increase.

Increase due to personal consumption rising

Apple invents eyeglasses that allow you to surf the internet. Millions are sold.

No effect, not an expenditure

The average SAT score increases by 5%.

Increase due to rise of exports, which get added to GDP.

1 million Google smart cars that drive themselves are sold to Canada.

Increase as businesses invest more.

Car manufacturers begin building more factories in the United States.

No effect, black market goods do not get reported for GDP

 A new illegal drug becomes popular in the Midwest.

Increase as government spending increases.

The government decides to expand the fleet of aircraft carriers.

Decrease

GDP	$1.02 trillion
Inflation rate from previous year	5%
Population change	1%

Increase

GDP	$1.10 trillion
Inflation rate from previous year	3%
Population change	2%

Decrease

GDP	$1.05 trillion
Inflation rate from previous year	4%
Population change	2%

Stay the Same

GDP	$1.20 trillion
Inflation rate from previous year	10%
Population change	10%

Increase

GDP	$1.40 trillion
Inflation rate from previous year	2%
Population change	0%

False

True or False: Adam Smith believed that due to the invisible hand leading to abuse, government should heavily regulate the economy.

False

True or False: According to Frederick Hayek, communism’s only advantage over capitalism is that the government will choose better goods to produce than private businesses would.

True

True or False: According to John Maynard Keynes, the government should increase spending during a recession to help spur businesses to increase hiring.

True

True or False: Milton Friedman believed that large amounts of government spending just led to inflation.

Decrease

Melissa purchases her wedding dress from China.

Decrease

Businesses decide to cut back spending on new office buildings.

Increase

Consumers purchase 1 million new self-driving cars made by Ford Motors.

It fell.

If GDP this year rose by 1%, inflation rose by 2%, and the population did not change, what happened to real GDP per capita this year?

10%

The nation of Economicsland has a population of 100 million people. 20% of its population does not have a job. 10% of the population are children and people who have stopped looking for work. What is Economicsland’s unemployment rate?

Inflation

Which of the following measurements would you expect to rise when the economy is rapidly expanding and growing?

False

True or False: The business cycle refers to how the United States’ economy expands and grows every year.

Real GDP per Capita

This measurement should be used to determine how the average standard of living for a person living in a country is changing.

Inflation

The rate at which prices are increasing in an economy.

Productivity

Measurement of the amount of goods and services that can be produced with a set amount of resources.

Invisible Hand

Term referring to how individuals, seeking their own self-gain, actually benefit the economy and a society as a whole.