ECN 2110 Week 6 Quiz

Module 6A Quiz

 

Question 1

 

When reference is made to the _________________________ , it means the specific amount of income needed for a basic standard of living.

 

·         poverty trap

·         income line

·         income gap

·         poverty line

 

 

Question 2

 

In the U.S., comparisons of high and low incomes raise issues of economic _________________________.

·         inequality and poverty

·         equality and wealth distribution

·         wealth distribution and poverty

·         equality and inequality

 

 

Question 3

 

If incomes rise for both low-income and high-income workers, but rise less for the high- income workers

 

·         then poverty will rise and inequality will fall

·         then poverty will fall and inequality will rise.

·         then poverty will rise and inequality will rise.

·         then poverty will fall and inequality will fall.

 

 

Question 4

 

The food stamp benefit

 

·         is a state funded program started in 1984.

·         does not contribute to the poverty trap from an economic viewpoint.

·         has time limits and is not a complete disincentive to work.

·         is reduced by $35 for every $100 earned and a and c above.

 

 

Question 5

 

Why did inequality of household income increase in the United States in recent decades?

 

·         growth of single-parent families at the top end of the income distribution

·         higher-earner couples near the top end of the income distribution

·         increase in earnings received by high-skilled labor relative to low-skilled labor

·         demand for high-skilled labor at higher wages increased and b and c

 

Question 6

 

A bond is a form of ___________ through which a corporation agrees to repay the amount that was borrowed together with ___________ over a period of time in the future

·         financial contract; a rate of interest

·         financial instrument; a rate of return

·         initial public offering; a rate of interest

·         financial investment; guarantees the investment

 

 

Question 7

 

Which of the following would legally qualify you to be registered as a shareholder of Microsoft Corporation?

·         buying the stock on the New York Stock Exchange

·         investing in bonds issued by the Microsoft

·         ownership of debt issued by the firm

·         ownership of debt issued by the firm

 

 

Question 8

 

A checking account typically pays __________________, but gives easy access to your money, either by writing a check or by using ______________.

 

·         no interest; a credit card

·         between 3% and 5% interest; a credit card

·         little or no interest; a debit card

·         between 2% and 4% interest; a debit card

 

 

 

 

 

Question 9

 

Why do business firms need financial capital?

 

·         to lend to other businesses Correct!

·         to make real physical capital investments

·         to provide an alternate source of revenue for households

·         to make diversified capital investments

 

 

Question 10

Which of the following is considered to be a method that firms can use to raise the financial capital that they need to pay for modernizing their production plants?

·         reinvesting profits

·         investments by late stage investors

·         borrowing large sums directly from households

·         increasing dividends to attract new investors