FBLA Economics and Personal Finance 2

Question 1

What is the 'law of supply' in economics?

Accepted Answer

As price increases, quantity supplied increases

Answer

As price increases, quantity supplied decreases

Answer

Supply is always equal to demand

Answer

Producers supply more when costs rise

Question 2

Which type of account typically offers the highest interest rate but requires keeping money deposited for a fixed term?

Accepted Answer

Certificate of Deposit (CD)

Answer

Checking account

Answer

Savings account

Answer

Money market account

Question 3

What is 'diversification' in personal investing?

Accepted Answer

Spreading investments across different asset types to reduce risk

Answer

Putting all money into one high-performing stock

Answer

Investing only in government bonds

Answer

Withdrawing investments when markets fall

Question 4

What does GDP stand for and what does it measure?

Accepted Answer

Gross Domestic Product; total value of goods and services produced in a country

Answer

General Domestic Price; average price of consumer goods

Answer

Government Debt Payment; total national debt repayments

Answer

Gross Deposit Pool; total bank deposits nationwide

Question 5

Which of the following is considered a 'liquid' asset?

Accepted Answer

Cash in a checking account

Answer

Real estate

Answer

Long-term government bonds

Answer

Collectible artwork

Question 6

What is compound interest?

Accepted Answer

Interest earned on both the principal and previously earned interest

Answer

Interest calculated only on the original principal

Answer

A fixed interest payment regardless of balance

Answer

Interest charged on overdue credit card payments only