Q.1

A capital expenditure results in a debit to 

  • an asset account
  • a liability account
  • an expense account
  • a capital account
Q.2

Which best describes the difference between stocks and bonds?

  • stocks allow investors to own a portion of the company; bonds are loans to the company
  • stocks are more reliable investment;bonds tend to be more volatile
  • stocks allow investors to share in profits;bonds make investors responsible for company debts
  • stocks pay interest to investors throughout the year; bonds only pay interest at fixed times during the year
Q.3

Which of the following can increase your credit card’s APR?

  • making credit card payments
  • missing credit card payments
  • not using credit card for long time
  • All of the above
Q.4

Most financial investments are examples of what type of risk?

  • Credit risk
  • Longevity risk
  • Human risk
  • Inflation risk
Q.5

The interest-rate effect suggests that

  • an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
  • a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending
  • an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.
  • an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending.
Q.6

The credit balance in the bank account is

  • amount liable to pay by bank
  • amount liable to pay by customer
  • Both A + B
  • None of the above
Q.7

An increase in the price of product A will

  • reduce the demand for resources used in the production of A.
  • reduce the demand for substitute product B
  • increase the demand for complementary product C.
  • increase the demand for substitute product B.
Q.8

Who is responsible to pay back all debts?

  • government
  • spouse
  • Both A & B
  • None of the above
Q.9

The accounting process is correctly sequenced as

  • Identifying→recording→communicating
  • Identifying→communicating→recording
  • Communicating→Recording→Identifying
  • Recording→Communicating→Identifying
Q.10

Which investment type typically carries the least risk?

  • Mutual funds
  • Treasury bonds
  • Savings account
  • Individual stocks
Q.11

Which of the following most impacts your credit score?

  • Payment History
  • Paying off your credit card bill
  • credit card bill due
  • All of the above
Q.12

The reserves of a commercial bank consist of

  • the bank's net worth
  • the amount of money market funds it holds
  • government securities that the bank holds
  • deposits at the Federal Reserve Bank and vault cash
Q.13

Public policy tools involve a combination of

  • equipment & penalties
  • incentives & equipment
  • penalties & incentives
  • All of the above
Q.14

In which of the following cases will total revenue increase?

  • Price rises and demand is inelastic
  • Price falls and supply is inelastic
  • Price rises and demand is elastic
  • Price falls and demand is inelastic
Q.15

In a fractional reserve banking system

  • bank accepts deposits
  • bank accepts some loans
  • bank has some cash reserves
  • All the above
Q.16

Purchase return and allowances is a contra account

  • TRUE
  • FALSE
Q.17

The income and substitution effects account for

  • the upward sloping curve
  • the downward sloping curve
  • Both A & B
  • None of the above
Q.18

A debit may signify an

  • Increase in asset account
  • Decrease in asset account
  • Increase in liability account
  • Increase in capital account
Q.19

The balance of an account is determined by

  • Sum of credits and debits
  • Difference of credits and debits
  • Product of credits and debits
  • None of the above
Q.20

Transfer payments are included in

  • Government subsidies
  • GDP
  • Both A & B
  • None of the above
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