Unit 4 Test Review - Economics Question Preview (ID: 33188)

Unit 4 Test Review.

One of the benefits of home ownership includes —
a) building equity
b) purchasing insurance
c) paying property taxes
d) funding large capital outlays

In order to qualify for a mortgage a loan officer will consider an applicant’s net worth. Which of the following is subtracted from assets to determine net worth?
a) bonds
b) liabilities
c) mutual funds
d) interest rates

Which of the following is not an annual cost of owning a home?
a) paying property taxes
b) Making payments on principal, interest, and insurance
c) keeping up with repairs and maintance
d) paying for new furniture

One potential risk from investing in the stock market is the loss of —
a) earned interest income
b) purchasing power
c) investor tolerance
d) portfolio diversification

Which investment is considered the most secure in a retirement plan?
a) public bond
b) individual retirement account
c) mutual fund
d) 401(k)

One effect of an increase in the amount of savings in an economy is —
a) an increase in financial resources for business investment
b) a decrease in retirement investments
c) an increase in consumer spending
d) a decrease in the production of goods and services

Loans that are obtained by offering an asset to guarantee repayment of the loan are considered —
a) insecure
b) default
c) secured
d) repossesed

Investments with high rates of return are generally accompanied with —
a) very high risk
b) low risk
c) no risk
d) nothing

The most effective way to manage credit card debt is by —
a) paying the minimum balance
b) working a part-time job to pay for credit
c) paying off the balance each month
d) finding a credit card with the lowest interest rate

Which type of bank account is not insured?
a) checking
b) mutual fund
c) savings
d) money market fund

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