Help with Economics please?
I'm doing an assignment and I need somebody to check my answers and correct me if I'm wrong.
1. A certificate of deposit is best for
A. money you want to put aside for a few months or years.
B money you may need at a moment’s notice.
C retirement investing.
D storing mortgage payments.
B
2. You have a savings bond but no other savings or investments. You have $25 a month to start investing. The first thing you should do with it is
A start an emergency savings fund.
B determine an asset allocation plan.
C purchase a government bond.
D purchase shares of stock.
C
3. When shopping for a savings account you should look for one that offers
A annual fees.
B loyal customer fees.
C simple interest.
D compounding interest.
D
4. The best explanation for the general rise of prices over time is
A inflation.
B deflation.
C rising interest rates.
D declining interest rates.
C
5. You are concerned about inflation eroding your college savings. You should put your money in an account that offers
A an interest rate lower than inflation.
B an interest rate higher than inflation.
C low balance transfer fees.
D FDIC insurance.
A
6. An account designed for payment of regular bills is
A savings.
B money market.
C corporate bond.
D checking.
D
7. Your expenses exceed your income. You should cut back your
A fixed costs.
B variable costs.
C opportunity costs.
D budget.
B
8. The first step in creating a budget is determining your
A expenses.
B credit debt.
C income.
D tax bracket.
C
9. You earn $30,000 per year and the federal tax rate is 10%. Your gross income is
A $3,000
B $17,000
C $27,000
D $30,000
C
10. Anna’s net income is $40,000 per year. What is the most she should spend towards housing each year?
A $4,000
B $14,000
C $20,000
D $30,000
C
11. Your friend’s job pays $10 per hour and he works 40 hours per week. His tax rate is 20%. Assuming he works 50 weeks of the year his yearly gross income is
A $4,000
B $16,000
C $20,000
D $40,000
A
12. You choose to work instead of attending college after graduation. A benefit of this choice would be
A higher income potential.
B earning money now.
C the cost of tuition.
D more free time.
B
13. Utility refers to a person's derived _____________ from consuming a good.
A scarcity.
B usefulness.
C satisfaction.
D opportunity cost.
B
14. Who would pay the least as a portion of income under a progressive tax?
A doctor earning $110,000 per year
B manager earning $45,000 per year
C athlete earning $2.5 million per year
D dishwasher earning $18,000 per year
D
15. Who would pay the most as a portion of income under a regressive tax?
A factory owner earning $90,000 per year
B grill master earning $10,000 per year
C economist earning $60,000 per year
D artist earning $20,000 per year
C
16. You earn $30,000 per year and paid 20% in taxes this year. The government decreased the tax rate to 10% for next year. Which will be your net income?
A $3,000
B $7,000
C $27,000
D $30,000
A
17. Imagine you live in a society with progressive taxation. Your friend makes double your salary and pays 20% in income taxes. Which rate most likely would be your income tax rate?
A 0%
B 10%
C 20%
D 30%
C
18. Some people would prefer a single income tax rate because it
A is easier to calculate.
B would increase the government’s revenue.
C means everyone would pay the same income percentage in taxes.
D would reduce the percent of income poorer families pay in income taxes.
C
19. "Tax bracket" is a term associated with which type of taxation?
A regressive
B proportional
C progressive
D flat
D
20. Which is most liquid?
A savings bonds.
B stock shares.
C certificates of deposit.
D cash.
D
21. To earn money, the rate of return on an investment must be higher than the
A rate of deflation.
B rate of inflation.
C interest rate.
D account fees.
D
22. You deposit all your saved money into a CD and have no other bank accounts. To save for emergencies you should
A purchase another CD.
B keep the money at home.
C deposit the money into a savings account.
D invest in a stock.
C
24. Diversification is important
A because money saved in a bank is not protected.
B so you do not pay more taxes to the government.
C in order to minimize risk and maximize return.
D to keep your financial documents orderly.
A
25. Your grandmother is nearing retirement. She currently has 90% of her savings in stocks and 10% in mutual funds. What would you recommend to her?
A Nothing; the money is allocated just right.
B Liquidate all assets and keep the cash at home.
C Shift highly aggressive investments into more conservative investments such as government bonds and a savings account.
D Move money from mutual funds into stocks.
C
Better Answer
You missed at least half the questions. I would take another look at:
1, 2, 4, 5, 9, 10, 11, 15, 16, 17, 19, 24. On 21 your answer could be correct, but I think they're looking for another answer. Good luck.
Written by Jkrb
Other Answers
You missed at least half the questions. I would take another look at:
1, 2, 4, 5, 9, 10, 11, 15, 16, 17, 19, 24. On 21 your answer could be correct, but I think they're looking for another answer. Good luck.
Written by Jkrb