Nefmq2010 Mini Quiz 1

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| By Nefmq2010
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Nefmq2010
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Quizzes Created: 2 | Total Attempts: 326
Questions: 10 | Attempts: 174

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Nefmq2010  Mini Quiz 1 - Quiz

Welcome to NEFMQ2010 Mini Quiz 1!
This quiz consists of 10 compulsory multiple choice questions and accounts for 10% of the preliminary scores.


Questions and Answers
  • 1. 

    John is currently working as a school teacher that pays him $65000 a year. Of late, he has been thinking of starting his own tuition centre. He can potentially take in 100 students and charge them $250 per month. However, he will have to fork out $8000 per month for rental. What is the total opportunity cost he faces per annum if he chooses to remain as a school teacher?

    • A.

      $0

    • B.

      $139 000

    • C.

      $204 000

    • D.

      $300 000

    Correct Answer
    C. $204 000
    Explanation
    John's total opportunity cost if he chooses to remain as a school teacher is $204,000. This is calculated by subtracting his potential earnings from the tuition center ($250 per month per student * 100 students * 12 months) from his current salary as a school teacher ($65,000). Therefore, the opportunity cost is $250,000 - $65,000 = $204,000.

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  • 2. 

    John and Mary are the lone dwellers on island X. In order to improve their living conditions, they have decided to specialize in production of goods which they have comparative advantage in producing.   John Mary   Fish Coconut Fish Coconut Output 6 2 24 9   Using the table above, it can be shown that _____________ has the comparative advantage in the production of fish.

    • A.

      John

    • B.

      Mary

    • C.

      Nobody

    • D.

      Everyone

    Correct Answer
    A. John
    Explanation
    Based on the table provided, John produces 6 fish while Mary produces only 2 fish. This indicates that John is more efficient or productive in producing fish compared to Mary. Therefore, John has the comparative advantage in the production of fish.

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  • 3. 

    According to the Principle of Purchasing Power Parity (PPP) for a country of fixed exchange rates: In the long run there can be a) _______ deviations between domestic and foreign inflation rates. If not, the real exchange rate would b) _________.

    • A.

      (a) no; (b) appreciate or depreciate without end

    • B.

      (a) no; (b) equal the nominal exchange rate.

    • C.

      (a) constant; (b) appreciate or depreciate without end.

    • D.

      (a) constant; (b) equal the nominal exchange rate.

    Correct Answer
    A. (a) no; (b) appreciate or depreciate without end
    Explanation
    According to the Principle of Purchasing Power Parity (PPP) for a country of fixed exchange rates, there should be no deviations between domestic and foreign inflation rates in the long run. If there were deviations, the real exchange rate would appreciate or depreciate without end. This means that the value of the currency would continuously increase or decrease without any limit.

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  • 4. 

    1.      A commercial bank has $5000 in excess reserves and the reserve ratio is 30%. The bank must have:

    • A.

      $90,000 in outstanding loans and $35,000 in reserves.

    • B.

      $90,000 in checkable deposit liabilities and $32,000 in reserves.

    • C.

      $90,000 in checkable deposit liabilities and $35,000 in reserves.

    • D.

      $20,000 in checkable deposit liabilities and $10,000 in reserves.

    Correct Answer
    B. $90,000 in checkable deposit liabilities and $32,000 in reserves.
    Explanation
    The correct answer is $90,000 in checkable deposit liabilities and $32,000 in reserves. This is because the bank has $5,000 in excess reserves, which means it can lend out $5,000 x (1/0.3) = $16,667. This amount is added to the initial reserves of $5,000, resulting in a total of $21,667 in reserves. The checkable deposit liabilities must be 10 times the amount of reserves, so $21,667 x 10 = $216,670. However, since the initial reserves were $5,000, the actual checkable deposit liabilities must be $216,670 - $5,000 = $211,670. Therefore, the correct answer is $90,000 in checkable deposit liabilities and $32,000 in reserves.

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  • 5. 

    1.      Short-run fluctuations in real GDP occur in the real business cycle model when:

    • A.

      Prices adjust gradually.

    • B.

      Shocks move short-run aggregate supply curve .

    • C.

      Shocks move long-run aggregate supply curve.

    • D.

      Investment depends upon the growth of real GDP.

    Correct Answer
    C. Shocks move long-run aggregate supply curve.
    Explanation
    In the real business cycle model, short-run fluctuations in real GDP occur when shocks move the long-run aggregate supply curve. This means that unexpected changes in factors such as technology, productivity, or input costs can cause shifts in the long-run aggregate supply curve, leading to changes in real GDP in the short run. These fluctuations are not caused by gradual price adjustments or changes in investment dependent on the growth of real GDP.

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  • 6. 

    Which of the following areas does financial planning cover?

    • A.

      Tax planning

    • B.

      Estate planning

    • C.

      Investment planning

    • D.

      All of the above

    Correct Answer
    D. All of the above
    Explanation
    Financial planning covers all of the areas mentioned in the options: tax planning, estate planning, and investment planning. Tax planning involves strategies to minimize tax liabilities and optimize financial resources. Estate planning involves the management and distribution of assets after death, ensuring that the individual's wishes are carried out and minimizing estate taxes. Investment planning involves creating a strategy to achieve financial goals through investing in various assets. Therefore, all of these areas are included in the scope of financial planning.

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  • 7. 

    Which are the CPF accounts you can use to pay for your housing instalments?

    • A.

      Ordinary account and Special account.

    • B.

      Ordinary account and Retirement account.

    • C.

      Medisave account and Special account.

    • D.

      Medisave account and Retirement account.

    Correct Answer
    A. Ordinary account and Special account.
    Explanation
    The correct answer is Ordinary account and Special account. These are the two CPF accounts that can be used to pay for housing instalments. The Ordinary account is used for housing-related expenses such as mortgage payments, while the Special account is used for retirement savings and can also be used for housing payments under certain conditions. The Medisave account is specifically for healthcare expenses, and the Retirement account is solely for retirement savings. Therefore, the correct answer is Ordinary account and Special account.

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  • 8. 

    Which of the following is not a factor affecting the CPF contribution rate?

    • A.

      Age

    • B.

      Salary

    • C.

      Marital status

    • D.

      Employment status

    Correct Answer
    C. Marital status
    Explanation
    Marital status is not a factor affecting the CPF contribution rate. The CPF contribution rate is determined based on factors such as age, salary, and employment status. Marital status does not directly impact the contribution rate as it is not considered in the calculation.

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  • 9. 

    All of the above products are listed on SGX  except for:

    • A.

      Shares

    • B.

      Structured warrants

    • C.

      Exchanged-traded funds

    • D.

      Singapore Government Securities

    Correct Answer
    D. Singapore Government Securities
  • 10. 

    To guide against credit card fraud, you should do the following except:

    • A.

      Sign your card with permanent ink as soon as it arrived

    • B.

      Keep your card relates information (e.g. PIN) in the same place as your credit card

    • C.

      Save sales slips to compare with billing information

    • D.

      Keep your cards in the same place after use

    Correct Answer
    B. Keep your card relates information (e.g. PIN) in the same place as your credit card
    Explanation
    Keeping your card-related information (e.g. PIN) in the same place as your credit card is not a recommended practice to guard against credit card fraud. This is because if someone gains access to your credit card, they will also have access to your PIN, making it easier for them to misuse your card. It is advisable to keep your card-related information separate from your credit card and to memorize your PIN instead of writing it down.

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  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • May 20, 2010
    Quiz Created by
    Nefmq2010

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