Econ semester review

One of the benefits of renting a home is that the cost of maintenance is —

• refunded with the deposit

• cheaper in a rental property

• covered by renters insurance

• the responsibility of the landlord

An important financial detail to consider when purchasing a home includes —

• family size

• number of rooms

• time for commuting

• saving for a down payment

Which of the following actions would improve a credit score?

• Paying off all debts

• Consolidating credit card balances

• Checking credit reports on a regular basis

• Keeping credit card balances as high as possible

One of the advantages corporations have that sole proprietorships do not is —

• limited liability

• ease of start up

• rights to all profits

• lack of special taxes

One effect of an increase in the amount of savings in an economy is —

• an increase in consumer spending

• a decrease in retirement investments

• a decrease in the production of goods and services

• an increase in financial resources for business investment

One potential risk from investing in the stock market is the loss of —

• investor tolerance

• purchasing power

• earned interest income

• portfolio diversification

What is one advantage to placing savings in a high-risk investment as oppose to putting savings in a low-risk investment?

• The tax rate on high-risk investments is lower.

• The amount of money needed to invest is lower.

• The money is more secure in a high-risk investment.

• The potential rate of return on investment is higher.

A first step to beginning a savings program would most likely be to —

• obtain credit

• set financial goals

• open a checking account

• sign up for direct deposit

One of the obligations of borrowing money is to —

• cosign loans for others

• make payments on time

• request the lowest interest rate possible

• designate in your will who pays the loan

The unemployment rate has risen to 9.7% and both the Gross Domestic Product (GDP) and Consumer Price Index are declining. The government could promote economic growth and address this economic situation by —

• increasing government spending and lowering taxes

• decreasing government spending and lowering taxes

• increasing government spending and increasing taxes

• decreasing government spending and increasing taxes