Exam
Name___________________________________
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) Finance is any transaction where money is exchanged for goods and services. 1)
2) Finance is any transaction where money is exchanged for money or a money- like instrument. 2)
3) A dividend is an after tax payment that must be made by all stock companies to the stockholders
each year.
3)
4) The United States operates with a free enterprise system. 4)
5) A market economy is one where all goods and services are exchanged freely. 5)
6) Wheat, soybeans, oil, and gold are commodities. 6)
7) The mental and physical talents of human beings are entrepreneurial resources. 7)
8) The stocks and bonds issued by a corporation are the economic capital resources of the
corporation.
8)
9) The stocks and bonds issued by a corporation are the financial capital resources of the corporation. 9)
10) In market transactions, when one party wins, the other usually feels as though he or she lost. 10)
11) The law of demand states that as the price of an item falls, the quantity demanded will decrease,
ceteris paribus.
11)
12) As the price of an item increases, the quantity of the item provided to the marketplace will
increase, ceteris paribus.
12)
13) First National Bank is the central bank of the United States. 13)
14) The Federal Reserve is the central bank of the United States. 14)
15) In order to increase the money supply, the Fed will sell government securities. 15)
16) A person making less than the cutoff rate for Social Security pays 6.2% of his income in Social
Security taxes.
16)
17) A person making $90,000 or less pays 6.2% of his salary in Social Security taxes. 17)
18) An athlete making $7,000,000 pays 6.2% on the full $7,000,000 in Social Security taxes. 18)
19) Social Security tax is regressive to the person making less than the cutoff rate. 19)
1
20) The Medicare tax of 1.45% is a proportionate tax for all. 20)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
21) Which of the following can be used to finance a small business? 21)
A) using cash generated from current sales
B) borrowing money from financial institutions
C) borrowing from other individuals
D) using one's own savings
E) all of the above
22) Which of the following is NOT a viable source of financing for the small business? 22)
A) using cash generated from current sales
B) borrowing from other individuals
C) issuing bonds to the general public
D) borrowing money from financial institutions
E) using one's own savings
23) An organized effort where goods and services are freely exchanged is known as a 23)
A) market. B) business. C) government. D) religion.
24) Which of the following is NOT a primary participant in the financial marketplace? 24)
A) individual households B) military units
C) governments D) businesses
25) There are several markets in the United States. The market where property is exchanged is the 25)
A) financial market.
B) retail market.
C) commodity market.
D) real estate market.
E) none of the above.
26) There are several markets in the United States. The market where corn, wheat, soybeans, and oil
are exchanged is the
26)
A) real estate market.
B) retail market.
C) commodity market.
D) financial market.
E) none of the above.
27) There are several markets in the United States. The market where stocks, bonds, and money are
exchanged is the
27)
A) real estate market.
B) financial market.
C) retail market.
D) commodity market.
E) none of the above.
2
28) There are several markets in the United States. The market where television sets are exchanged is
the
28)
A) retail market.
B) real estate market.
C) financial market
D) commodity market.
E) none of the above.
29) There are several markets in the United States. The market where final goods and services are
exchanged is the
29)
A) real estate market.
B) commodity market.
C) financial market.
D) retail market.
E) none of the above.
30) The primary savers of funds in the United States are 30)
A) businesses.
B) households.
C) governments.
D) all of the above.
E) none of the above.
31) The users of funds in the United States are 31)
A) governments.
B) households.
C) businesses.
D) all of the above.
E) none of the above.
32) Human beings have ________ wants and desires for goods and services. They also have ________
financial means with which to pay for them.
32)
A) limited; unlimited B) unlimited; unlimited
Name___________________________________
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) Finance is any transaction where money is exchanged for goods and services. 1)
2) Finance is any transaction where money is exchanged for money or a money- like instrument. 2)
3) A dividend is an after tax payment that must be made by all stock companies to the stockholders
each year.
3)
4) The United States operates with a free enterprise system. 4)
5) A market economy is one where all goods and services are exchanged freely. 5)
6) Wheat, soybeans, oil, and gold are commodities. 6)
7) The mental and physical talents of human beings are entrepreneurial resources. 7)
8) The stocks and bonds issued by a corporation are the economic capital resources of the
corporation.
8)
9) The stocks and bonds issued by a corporation are the financial capital resources of the corporation. 9)
10) In market transactions, when one party wins, the other usually feels as though he or she lost. 10)
11) The law of demand states that as the price of an item falls, the quantity demanded will decrease,
ceteris paribus.
11)
12) As the price of an item increases, the quantity of the item provided to the marketplace will
increase, ceteris paribus.
12)
13) First National Bank is the central bank of the United States. 13)
14) The Federal Reserve is the central bank of the United States. 14)
15) In order to increase the money supply, the Fed will sell government securities. 15)
16) A person making less than the cutoff rate for Social Security pays 6.2% of his income in Social
Security taxes.
16)
17) A person making $90,000 or less pays 6.2% of his salary in Social Security taxes. 17)
18) An athlete making $7,000,000 pays 6.2% on the full $7,000,000 in Social Security taxes. 18)
19) Social Security tax is regressive to the person making less than the cutoff rate. 19)
1
20) The Medicare tax of 1.45% is a proportionate tax for all. 20)
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
21) Which of the following can be used to finance a small business? 21)
A) using cash generated from current sales
B) borrowing money from financial institutions
C) borrowing from other individuals
D) using one's own savings
E) all of the above
22) Which of the following is NOT a viable source of financing for the small business? 22)
A) using cash generated from current sales
B) borrowing from other individuals
C) issuing bonds to the general public
D) borrowing money from financial institutions
E) using one's own savings
23) An organized effort where goods and services are freely exchanged is known as a 23)
A) market. B) business. C) government. D) religion.
24) Which of the following is NOT a primary participant in the financial marketplace? 24)
A) individual households B) military units
C) governments D) businesses
25) There are several markets in the United States. The market where property is exchanged is the 25)
A) financial market.
B) retail market.
C) commodity market.
D) real estate market.
E) none of the above.
26) There are several markets in the United States. The market where corn, wheat, soybeans, and oil
are exchanged is the
26)
A) real estate market.
B) retail market.
C) commodity market.
D) financial market.
E) none of the above.
27) There are several markets in the United States. The market where stocks, bonds, and money are
exchanged is the
27)
A) real estate market.
B) financial market.
C) retail market.
D) commodity market.
E) none of the above.
2
28) There are several markets in the United States. The market where television sets are exchanged is
the
28)
A) retail market.
B) real estate market.
C) financial market
D) commodity market.
E) none of the above.
29) There are several markets in the United States. The market where final goods and services are
exchanged is the
29)
A) real estate market.
B) commodity market.
C) financial market.
D) retail market.
E) none of the above.
30) The primary savers of funds in the United States are 30)
A) businesses.
B) households.
C) governments.
D) all of the above.
E) none of the above.
31) The users of funds in the United States are 31)
A) governments.
B) households.
C) businesses.
D) all of the above.
E) none of the above.
32) Human beings have ________ wants and desires for goods and services. They also have ________
financial means with which to pay for them.
32)
A) limited; unlimited B) unlimited; unlimited