FBLA Economics and Personal Finance 1

Question 1

What does the term 'opportunity cost' mean in economics?

Accepted Answer

The value of the next best alternative foregone

Answer

The price of a product plus taxes

Answer

The total cost of producing one unit

Answer

The fee charged by a financial advisor

Question 2

Which of the following best describes a 'budget surplus'?

Accepted Answer

Income exceeds spending

Answer

Spending exceeds income

Answer

Income equals spending

Answer

Debt exceeds assets

Question 3

What is the primary function of the Federal Reserve in the United States?

Accepted Answer

Manage the nation's monetary policy

Answer

Collect federal taxes

Answer

Regulate state banks only

Answer

Issue U.S. passports

Question 4

What is 'inflation'?

Accepted Answer

A general rise in price levels over time

Answer

A decrease in the money supply

Answer

An increase in consumer savings

Answer

A drop in unemployment rates

Question 5

Which financial document shows a person's assets, liabilities, and net worth at a specific point in time?

Accepted Answer

Balance sheet (net worth statement)

Answer

Income statement

Answer

Cash flow statement

Answer

Tax return

Question 6

What is a 'credit score' primarily used for?

Accepted Answer

Assessing an individual's creditworthiness

Answer

Measuring a business's profitability

Answer

Calculating income tax owed

Answer

Determining insurance premiums only