Economics and Finance Mastery Quiz

What is the basic economic problem that arises because resources are limited?

• Inflation

• Scarcity

• Unemployment

• Recession

Which of the following is a key principle of personal budgeting?

• Spend more than you earn

• Save after spending

• Pay yourself first

• Ignore fixed expenses

If the price of a product increases, what is likely to happen to the quantity demanded, assuming all other factors remain constant?

• It will increase

• It will decrease

• It will remain the same

• It will double

Which type of investment typically offers the highest potential return?

• Savings account

• Bonds

• Stocks

• Certificates of deposit

What is the term for the total amount of money borrowed or owed?

• Credit

• Debt

• Interest

• Principal

Which of the following is a component of financial literacy?

• Understanding complex algorithms

• Knowing how to read a novel

• Managing personal finances

• Writing poetry

Calculate the future value of an investment of $1,000 at an annual interest rate of 5% compounded annually for 3 years.

• $1,150.00

• $1,157.63

• $1,200.00

• $1,250.00

Which of the following is an example of a fixed expense in a personal budget?

• Groceries

• Entertainment

• Rent

• Dining out

What happens to the supply of a product if the cost of production decreases?

• Supply decreases

• Supply increases

• Supply remains unchanged

• Supply becomes zero

Which investment is considered the safest?

• Stocks

• Mutual funds

• Real estate

• Government bonds