Interesting Quiz On Economics - 2

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Interesting Quiz On Economics - 2 - Quiz

Do you really know everything about Economics?


Questions and Answers
  • 1. 

    What document is usually included with a 401(k) to help the employee better understand it?

    • A.

      Administrative Services Agreement

    • B.

      Base Plan Document

    • C.

      Adoption Agreement

    • D.

      Summary Plan Description

    Correct Answer
    D. Summary Plan Description
    Explanation
    A Summary Plan Description is usually included with a 401(k) to help the employee better understand it. This document provides a comprehensive overview of the plan, including details about eligibility, contribution limits, investment options, and vesting schedules. It also explains the rights and responsibilities of the employee and the employer. By reading the Summary Plan Description, employees can gain a better understanding of how the 401(k) plan works and make informed decisions about their retirement savings.

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  • 2. 

    What now-debunked law of Economics essentially states that "supply creates its own demand"?

    • A.

      Campbell's Law

    • B.

      Say's Law

    • C.

      Bowley's Law

    • D.

      Keynes' Law

    Correct Answer
    B. Say's Law
    Explanation
    Say's Law essentially states that "supply creates its own demand." It suggests that the production of goods and services generates income, which in turn creates demand for those goods and services. This means that as long as producers are able to supply goods and services to the market, there will always be enough demand to absorb them. However, this law has been debunked as it does not account for factors such as savings, hoarding, and the possibility of overproduction leading to a lack of demand.

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  • 3. 

    Which U.S. President's image was stamped onto the last new dollar coin design of 2011?

    • A.

      Rutherford B. Hayes

    • B.

      Ulysses S. Grant

    • C.

      James Garfield

    • D.

      Chester A. Arthur

    Correct Answer
    C. James Garfield
    Explanation
    James Garfield's image was stamped onto the last new dollar coin design of 2011.

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  • 4. 

    What is the term for the difference between actual transaction costs and the amount actually paid?

    • A.

      Runoff

    • B.

      Slippage

    • C.

      Service Gap

    • D.

      Diminution

    Correct Answer
    B. Slippage
    Explanation
    Slippage is the term used to describe the difference between the actual transaction costs and the amount that was actually paid. It refers to the discrepancy between the expected price of a trade and the price at which it is actually executed. This can occur due to various factors such as market volatility, liquidity issues, or delays in order execution. Slippage can have a significant impact on the profitability of trades, especially for high-frequency traders or those dealing with large volumes.

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  • 5. 

    Used in economics to discount unlikely scenarios and variables, the Latin expression ceteris paribus translates to...

    • A.

      For All Intents And Purposes

    • B.

      Besides The Obvious

    • C.

      Other Things Being Equal

    • D.

      Without Regard

    Correct Answer
    C. Other Things Being Equal
    Explanation
    The correct answer is "Other Things Being Equal." Ceteris paribus is a Latin phrase used in economics to indicate that all other variables or factors are held constant or equal, while focusing on the impact of a specific variable or factor. It is a way to isolate and analyze the relationship between two or more variables without the interference of other factors.

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  • 6. 

    NASDAQ purchased which American stock exchange in 2007?

    • A.

      Philadelphia Stock Exchange

    • B.

      Chicago Stock Exchange

    • C.

      Arizona Stock Exchange

    • D.

      Boston Stock Exchange

    Correct Answer
    A. Philadelphia Stock Exchange
    Explanation
    In 2007, NASDAQ purchased the Philadelphia Stock Exchange. This acquisition allowed NASDAQ to expand its presence in the American stock market and gain access to the Philadelphia Stock Exchange's resources and client base.

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  • 7. 

    Which of the following is not an inflation-indexed bond?

    • A.

      Real Return Bonds

    • B.

      I-Bonds

    • C.

      TIPS

    • D.

      Treasury Notes

    Correct Answer
    D. Treasury Notes
    Explanation
    Treasury Notes are not an inflation-indexed bond. While Real Return Bonds, I-Bonds, and TIPS are all examples of inflation-indexed bonds, Treasury Notes do not have their principal or interest payments adjusted for inflation. Therefore, Treasury Notes do not provide protection against inflation like the other options mentioned.

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  • 8. 

    What classification of debt lies between investment-grade debt and junk bonds?

    • A.

      Medium-Yield Debt

    • B.

      Low-Yield Debt

    • C.

      Slow-Yield Debt

    • D.

      High-Yield Debt

    Correct Answer
    D. High-Yield Debt
    Explanation
    High-Yield Debt is the correct answer because it refers to a classification of debt that falls between investment-grade debt and junk bonds. High-yield debt, also known as speculative-grade or non-investment-grade debt, carries a higher risk of default compared to investment-grade debt but offers higher yields to compensate investors for the increased risk. This type of debt is typically issued by companies with lower credit ratings or higher levels of debt.

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  • 9. 

    Which of the following economists would not be considered a disciple of John Maynard Keynes?

    • A.

      Alvin Nansen

    • B.

      Paul Krugman

    • C.

      Milton Friedman

    • D.

      Paul Anthony Samuelson

    Correct Answer
    C. Milton Friedman
    Explanation
    Milton Friedman would not be considered a disciple of John Maynard Keynes because he was a prominent figure in the Chicago School of Economics, which had a different approach to economic theory than Keynesian economics. Friedman believed in the importance of free markets and limited government intervention, while Keynes advocated for government intervention to stimulate the economy during times of recession. Therefore, Friedman's economic views and policy recommendations were in direct contrast to those of Keynes, making him not a disciple of Keynes.

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  • 10. 

    Which of the following is not an example of a "club good"?

    • A.

      A Lighthouse

    • B.

      A Private Park

    • C.

      A Movie Theater

    • D.

      Satellite Television

    Correct Answer
    A. A Lighthouse
    Explanation
    A lighthouse is not an example of a "club good" because it is a public good. Club goods are excludable, meaning that access can be restricted to those who pay for it, and non-rivalrous, meaning that one person's use does not diminish its availability to others. However, a lighthouse is non-excludable as it provides a benefit to all ships in its vicinity, regardless of whether they contribute to its maintenance or not. Therefore, it does not meet the criteria of a club good.

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  • 11. 

    What type of framework is used to study a theoretical economy cut off from the outside world and with only one economic agent?

    • A.

      Robinson Crusoe Economy

    • B.

      Swiss Family Robinson Economy

    • C.

      Survivor Economy

    • D.

      Tempest Economy

    Correct Answer
    A. Robinson Crusoe Economy
    Explanation
    A Robinson Crusoe Economy is a theoretical framework used to study an economy that is isolated from the outside world and has only one economic agent. This concept is derived from the novel "Robinson Crusoe" by Daniel Defoe, where the protagonist is stranded on a deserted island and has to make economic decisions to survive. In this type of economy, the individual is responsible for all production, consumption, and decision-making, making it an ideal scenario to analyze the behavior and choices of a single economic agent.

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  • 12. 

    Which of the following people did not do jail time for income tax evasion?

    • A.

      Al Capone

    • B.

      Spiro T. Agnew

    • C.

      Wesley Snipes

    • D.

      Leona Helmsley

    Correct Answer
    B. Spiro T. Agnew
    Explanation
    Spiro T. Agnew did not do jail time for income tax evasion. This is because although he was charged with tax evasion, he reached a plea agreement with the government in 1973. Under this agreement, he pleaded no contest to a single charge of income tax evasion and resigned from his position as Vice President of the United States. As a result, he was spared from serving jail time and instead received three years of probation and was fined $10,000.

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  • 13. 

    In terms of percentage, the largest daily loss in Dow Jones history took place on what date?

    • A.

      October 15th, 2008

    • B.

      October 19th, 1987

    • C.

      October 27th, 1997

    • D.

      October 28th, 1929

    Correct Answer
    B. October 19th, 1987
    Explanation
    On October 19th, 1987, the largest daily loss in Dow Jones history took place. This event is commonly referred to as "Black Monday" and it was a significant stock market crash. On that day, the Dow Jones Industrial Average dropped by 22.6%, which remains the largest percentage decline in a single day. This event had a profound impact on the global financial markets and is considered one of the most severe stock market crashes in history.

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  • 14. 

    On the S&P ratings scale, what is the highest long-term credit rating a country can hold?

    • A.

      AA+

    • B.

      AA

    • C.

      AAA+

    • D.

      AAA

    Correct Answer
    D. AAA
    Explanation
    AAA is the highest long-term credit rating a country can hold on the S&P ratings scale. This rating indicates that the country has a very low risk of defaulting on its financial obligations. It signifies that the country has a strong and stable economy, a reliable government, and a solid track record of meeting its financial commitments. Countries with a AAA rating are considered to be the most creditworthy and trustworthy borrowers in the global financial markets.

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  • 15. 

    How many U.S. banks failed between 2005 and 2006?

    • A.

      7

    • B.

      1

    • C.

      0

    • D.

      19

    Correct Answer
    C. 0
    Explanation
    Between 2005 and 2006, there were no U.S. banks that failed. This suggests that the banking industry was relatively stable during that period, with no significant financial crises or collapses. It could be attributed to effective regulatory measures and strong financial performance of the banks during that time.

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  • Mar 17, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 18, 2015
    Quiz Created by
    Thames
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