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Question 1...
Which of the following is NOT a function of money?(1 point)
Responses

Currency exchange
Currency exchange

Medium of exchange
Medium of exchange

Store of value
Store of value

Unit of account
Unit of account
Question 2
What is a primary reason money is often preferred over bartering in transactions?(1 point)
Responses

It allows for the exchange of goods without needing a mutual desire.
It allows for the exchange of goods without needing a mutual desire.

It requires both parties to have goods of equal value.
It requires both parties to have goods of equal value.

It complicates the trading process with negotiations.
It complicates the trading process with negotiations.

It limits the types of goods that can be exchanged.
It limits the types of goods that can be exchanged.
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5 answers

Question 1

Which of the following is NOT a function of money?

  • Currency exchange (This is not a fundamental function of money; rather, it is a process involving the conversion of one form of money into another.)
  • Medium of exchange
  • Store of value
  • Unit of account

Answer: Currency exchange

Question 2

What is a primary reason money is often preferred over bartering in transactions?

  • It allows for the exchange of goods without needing a mutual desire. (This is true because money serves as a common medium that can facilitate transactions without needing both parties to want what the other has.)
  • It requires both parties to have goods of equal value.
  • It complicates the trading process with negotiations.
  • It limits the types of goods that can be exchanged.

Answer: It allows for the exchange of goods without needing a mutual desire.

2 of 32 of 3 Items
Question 1
What happens to interest rates when there is a high demand for car loans?(1 point)
Responses

Interest rates decrease to encourage borrowing.
Interest rates decrease to encourage borrowing.

Interest rates remain the same regardless of demand.
Interest rates remain the same regardless of demand.

Interest rates may increase due to higher demand.
Interest rates may increase due to higher demand.

Interest rates are only affected by government policies.
Interest rates are only affected by government policies.
Question 2
Why do many financial advisors recommend accounts that offer compound interest?(1 point)
Responses

Because compound interest allows for lower initial investments.
Because compound interest allows for lower initial investments.

Because simple interest is more complicated to calculate.
Because simple interest is more complicated to calculate.

Because compound interest can lead to higher total earnings over time.
Because compound interest can lead to higher total earnings over time.

Because compound interest is guaranteed to earn more every year.
Because compound interest is guaranteed to earn more every year.
Question 3
If Jaden earns around $30,000 a year and Ava earns $70,000 or more annually, what can be inferred about their education or skills?(1 point)
Responses

Ava's job is less demanding than Jaden's.
Ava's job is less demanding than Jaden's.

Ava and Jaden have the same level of education.
Ava and Jaden have the same level of education.

Ava likely has higher education or more skills than Jaden.
Ava likely has higher education or more skills than Jaden.

Jaden likely has more experience than Ava.
Jaden likely has more experience than Ava.
Question 4
What might happen if you miss a credit card payment?(1 point)
Responses

Your credit limit will be increased.
Your credit limit will be increased.

You will receive a refund for the missed payment.
You will receive a refund for the missed payment.

You may incur late fees and higher interest rates.
You may incur late fees and higher interest rates.

Your credit card will be canceled immediately.
Your credit card will be canceled immediately.
Question 5
What is one advantage of using a credit card?(1 point)
Responses

It eliminates the need for a credit score.
It eliminates the need for a credit score.

It provides purchase protection.
It provides purchase protection.

It guarantees a loan approval.
It guarantees a loan approval.

It allows unlimited borrowing without repayment.
It allows unlimited borrowing without repayment.
Question 6
Which of the following best describes the relationship between timely car payments and credit scores?(1 point)
Responses

Only credit card payments affect credit scores.
Only credit card payments affect credit scores.

Timely payments can help build a good credit score.
Timely payments can help build a good credit score.

Timely payments have no effect on credit scores.
Timely payments have no effect on credit scores.

Late payments can improve credit scores.
Late payments can improve credit scores.
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Question 1

What happens to interest rates when there is a high demand for car loans?

  • Interest rates decrease to encourage borrowing.
  • Interest rates remain the same regardless of demand.
  • Interest rates may increase due to higher demand. (Higher demand for loans typically leads to higher interest rates.)
  • Interest rates are only affected by government policies.

Answer: Interest rates may increase due to higher demand.

Question 2

Why do many financial advisors recommend accounts that offer compound interest?

  • Because compound interest allows for lower initial investments.
  • Because simple interest is more complicated to calculate.
  • Because compound interest can lead to higher total earnings over time. (Compound interest earns interest on both the initial principal and the accumulated interest.)
  • Because compound interest is guaranteed to earn more every year.

Answer: Because compound interest can lead to higher total earnings over time.

Question 3

If Jaden earns around $30,000 a year and Ava earns $70,000 or more annually, what can be inferred about their education or skills?

  • Ava's job is less demanding than Jaden's.
  • Ava and Jaden have the same level of education.
  • Ava likely has higher education or more skills than Jaden. (Generally, higher earnings are associated with higher levels of education or specialized skills.)
  • Jaden likely has more experience than Ava.

Answer: Ava likely has higher education or more skills than Jaden.

Question 4

What might happen if you miss a credit card payment?

  • Your credit limit will be increased.
  • You will receive a refund for the missed payment.
  • You may incur late fees and higher interest rates. (Missing a payment can negatively impact your finances.)
  • Your credit card will be canceled immediately.

Answer: You may incur late fees and higher interest rates.

Question 5

What is one advantage of using a credit card?

  • It eliminates the need for a credit score.
  • It provides purchase protection. (Many credit cards offer consumer protections for purchases, including fraud protection and warranties.)
  • It guarantees a loan approval.
  • It allows unlimited borrowing without repayment.

Answer: It provides purchase protection.

Question 6

Which of the following best describes the relationship between timely car payments and credit scores?

  • Only credit card payments affect credit scores.
  • Timely payments can help build a good credit score. (Regularly making payments on time is a key factor in determining credit scores.)
  • Timely payments have no effect on credit scores.
  • Late payments can improve credit scores.

Answer: Timely payments can help build a good credit score.

3 of 33 of 3 Items
Question 1
Miguel is an entrepreneur considering starting a new business. He is aware of the risks involved but are also motivated by potential benefits. Which of the following choices best analyzes how both risks and rewards might influence Miguel's decision to pursue this path?(1 point)
Responses

The risks outweigh the benefits because a new business has a high chance of failure, making it unlikely that Miguel will experience personal satisfaction.
The risks outweigh the benefits because a new business has a high chance of failure, making it unlikely that Miguel will experience personal satisfaction.

The benefits are appealing because they guarantee wealth and happiness, making entrepreneurship a safe choice with minimal risk.
The benefits are appealing because they guarantee wealth and happiness, making entrepreneurship a safe choice with minimal risk.

The risks and benefits both play a role. Financial gain and personal satisfaction may motivate Miguel, even though he is aware that failure is possible.
The risks and benefits both play a role. Financial gain and personal satisfaction may motivate Miguel, even though he is aware that failure is possible.

The rewards of entrepreneurship are mostly limited to financial gain, so any personal satisfaction Miguel feels is unlikely to affect his decision.
The rewards of entrepreneurship are mostly limited to financial gain, so any personal satisfaction Miguel feels is unlikely to affect his decision.
Question 2

What is the relationship between households and businesses in the circular flow model?

(1 point)
Responses

Households provide goods to businesses.
Households provide goods to businesses.

Businesses provide services to the government.
Businesses provide services to the government.

Households spend money on goods and services from businesses.
Households spend money on goods and services from businesses.

Businesses collect taxes from households.
Businesses collect taxes from households.
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Question 1

Miguel is an entrepreneur considering starting a new business. He is aware of the risks involved but is also motivated by potential benefits. Which of the following choices best analyzes how both risks and rewards might influence Miguel's decision to pursue this path?

  • The risks outweigh the benefits because a new business has a high chance of failure, making it unlikely that Miguel will experience personal satisfaction.
  • The benefits are appealing because they guarantee wealth and happiness, making entrepreneurship a safe choice with minimal risk.
  • The risks and benefits both play a role. Financial gain and personal satisfaction may motivate Miguel, even though he is aware that failure is possible. (This acknowledges both the risks and the potential rewards of entrepreneurship.)
  • The rewards of entrepreneurship are mostly limited to financial gain, so any personal satisfaction Miguel feels is unlikely to affect his decision.

Answer: The risks and benefits both play a role. Financial gain and personal satisfaction may motivate Miguel, even though he is aware that failure is possible.

Question 2

What is the relationship between households and businesses in the circular flow model?

  • Households provide goods to businesses.
  • Businesses provide services to the government.
  • Households spend money on goods and services from businesses. (In the circular flow model, households are consumers who purchase goods and services from businesses.)
  • Businesses collect taxes from households.

Answer: Households spend money on goods and services from businesses.