Test Your Knowledge In Economics
How Much do you know about Economics?
Questions and Answers
- 1.
Which of the following IRS forms lists the interest paid on a student loan?
- A.
1099-MISC
- B.
941
- C.
1098-E
- D.
4868
Correct Answer
C. 1098-EExplanation
Form 1098-E is the correct answer because it is the IRS form specifically designed for reporting the interest paid on a student loan. This form is provided by the loan servicer or lender and is used by the borrower to report the deductible amount of student loan interest on their tax return. The other forms listed, 1099-MISC, 941, and 4868, are not related to reporting student loan interest.Rate this question:
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- 2.
The United States Treasury first printed paper money during what war?
- A.
War Of 1812
- B.
U.S. Civil War
- C.
Mexican-American War
- D.
American Revolution
Correct Answer
B. U.S. Civil WarExplanation
During the U.S. Civil War, the United States Treasury first printed paper money. The war had a significant impact on the economy and the government needed a way to finance the war effort. As a result, they began issuing paper currency, known as "greenbacks," to fund the war and stabilize the economy. This marked the first time that the United States government relied heavily on paper money instead of gold or silver coins.Rate this question:
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- 3.
The CAMEL rating system evaluates the financial health of what institutions?
- A.
Insurance Companies
- B.
Trusts
- C.
Credit Unions
- D.
Banks
Correct Answer
C. Credit UnionsExplanation
The CAMEL rating system evaluates the financial health of credit unions. This system assesses several key factors including capital adequacy, asset quality, management, earnings, and liquidity. By evaluating these aspects, the CAMEL rating system helps regulators and stakeholders determine the overall financial stability and risk profile of credit unions.Rate this question:
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- 4.
Which unit of U.S. paper currency weighs the most?
- A.
100-Dollar Bill
- B.
They All Weigh The Same
- C.
20-Dollar Bill
- D.
1-Dollar Bill
Correct Answer
B. They All Weigh The SameExplanation
The correct answer is "They All Weigh The Same." The weight of U.S. paper currency is standardized by the Bureau of Engraving and Printing. Regardless of the denomination, all bills weigh approximately one gram. This uniform weight ensures consistency in handling and counting currency, making it easier for banks and businesses to process cash transactions.Rate this question:
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- 5.
The first U.S. Federal statute to limit cartels and monopolies was named for what senator?
- A.
John Sherman
- B.
Andrew Volstead
- C.
Homer Ferguson
- D.
John V. Tunney
Correct Answer
A. John ShermanExplanation
The correct answer is John Sherman. The question asks for the name of the senator after whom the first U.S. Federal statute to limit cartels and monopolies was named. The correct answer is John Sherman, as the legislation is known as the Sherman Antitrust Act. This act was passed in 1890 and aimed to promote fair competition and prevent the formation of monopolies. John Sherman, a senator from Ohio, was the primary sponsor of the act and played a crucial role in its passage.Rate this question:
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- 6.
Lipper averages are used to measure the performance of what investment type?
- A.
Money Markets
- B.
Mutual Funds
- C.
Stocks
- D.
Bonds
Correct Answer
B. Mutual FundsExplanation
Lipper averages are commonly used to evaluate the performance of mutual funds. These averages provide a benchmark to compare the returns of different mutual funds within the same category. By analyzing Lipper averages, investors can assess the relative performance of a mutual fund and make informed decisions about their investments.Rate this question:
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- 7.
Which retirement plan is similar to a 401(k) but designed for small companies and self-employed individuals?
- A.
419(e)
- B.
529
- C.
408(k)
- D.
403(b)
Correct Answer
C. 408(k)Explanation
The correct answer is 408(k) because it is a retirement plan specifically designed for small companies and self-employed individuals, similar to a 401(k) plan. This plan allows for tax-deferred contributions and potential employer matching contributions, making it an attractive option for those who are self-employed or work for a small company.Rate this question:
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- 8.
When used in finance, what term measures the amount of uncertainty or risk concerning the size of changes in a security's value?
- A.
Dispersion
- B.
Volatility
- C.
Wobble
- D.
Flippancy
Correct Answer
B. VolatilityExplanation
Volatility is the correct answer because it accurately measures the amount of uncertainty or risk associated with the size of changes in a security's value. In finance, volatility refers to the degree of variation or fluctuation in the price or value of a financial instrument. Higher volatility indicates greater potential for large price swings, indicating higher risk and uncertainty. Therefore, volatility is a crucial concept in finance for assessing and managing investment risk.Rate this question:
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- 9.
As of December, 2011, what is the only Asian country to hold a coveted AAA rating from the Fitch Group?
- A.
Singapore
- B.
China
- C.
Japan
- D.
South Korea
Correct Answer
A. SingaporeExplanation
Singapore is the correct answer because as of December 2011, it was the only Asian country to hold a AAA rating from the Fitch Group. This rating indicates that Singapore has a very low risk of defaulting on its debt and is considered to have a strong and stable economy. China, Japan, and South Korea did not hold this coveted rating at that time.Rate this question:
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- 10.
Which variety of trade block is composed of a free trade area with a common external tariff?
- A.
Customs Union
- B.
Monetary Union
- C.
Common Market
- D.
Fiscal Union
Correct Answer
A. Customs UnionExplanation
A customs union is a type of trade block where member countries have a free trade area, meaning they can trade goods and services with each other without tariffs or trade barriers. However, they also have a common external tariff, which means they apply the same tariffs and trade policies to non-member countries. This helps create a unified trading bloc and promotes economic integration among member countries.Rate this question:
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- 11.
How long was the instructions packet for the 2011 version of the IRS' 1040 form?
- A.
150 Pages
- B.
100 Pages
- C.
75 Pages
- D.
50 Pages
Correct Answer
B. 100 PagesExplanation
The instructions packet for the 2011 version of the IRS' 1040 form was 100 pages long.Rate this question:
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- 12.
The term "cat bonds" is short for what?
- A.
Catered Bonds
- B.
Categorized Bonds
- C.
Catastrophe Bonds
- D.
Cataloged Bonds
Correct Answer
C. Catastrophe BondsExplanation
Cat bonds, short for catastrophe bonds, are a type of insurance-linked security that allow insurance companies to transfer the risk of potential catastrophic events, such as natural disasters, to investors. These bonds are designed to provide financial protection to insurance companies in the event of large-scale disasters, and investors earn a return based on the performance of the bond and the absence of catastrophic events.Rate this question:
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- 13.
What investment strategy involves spreading one's resources across a wide variety of investment types?
- A.
Playing The Field
- B.
Random Allocation
- C.
Cost Hedging
- D.
Diversification
Correct Answer
D. DiversificationExplanation
Diversification is an investment strategy that involves spreading one's resources across a wide variety of investment types. By diversifying, an investor can reduce the risk of their portfolio by not putting all their eggs in one basket. This strategy allows them to potentially benefit from the performance of different investment types and sectors, while also mitigating the impact of any individual investment's poor performance. By diversifying, investors can increase the likelihood of achieving a more stable and balanced return on their investments over time.Rate this question:
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- 14.
Legislative motions which authorize the government to spend money towards a specific purpose are called what?
- A.
Outflow Bill
- B.
Ways And Means Bill
- C.
Appropriation Bill
- D.
Spending Bill
Correct Answer
C. Appropriation BillExplanation
An Appropriation Bill is a legislative motion that authorizes the government to spend money towards a specific purpose. It is a formal proposal that outlines the amount of money that can be allocated for various government programs, projects, and expenses. This bill is crucial for the government to ensure that funds are allocated and spent in a transparent and accountable manner.Rate this question:
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- 15.
What term is used for the act of providing very small loans to entrepreneurs in impoverished nations?
- A.
Minifunds
- B.
Microcredit
- C.
Bitpayments
- D.
Nanoloans
Correct Answer
B. MicrocreditExplanation
Microcredit refers to the act of providing very small loans to entrepreneurs in impoverished nations. It is a financial service that aims to empower individuals who lack access to traditional banking systems and cannot obtain loans from conventional sources. By providing microcredit, entrepreneurs can start or expand their businesses, generate income, and improve their living conditions. This approach has been widely adopted as a means of poverty alleviation and economic development in many developing countries.Rate this question:
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