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

Opportunity cost is the value of the next best option you give up when making a choice.

Question 2

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

Accepted Answer

Income exceeds spending

Answer

A budget surplus occurs when revenue or income is greater than expenditures during a given period.

Question 3

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

Accepted Answer

Manage the nation's monetary policy

Answer

The Federal Reserve manages monetary policy, including controlling the money supply and setting interest rates.

Question 4

What is 'inflation'?

Accepted Answer

A general rise in price levels over time

Answer

Inflation refers to the sustained increase in the general price level of goods and services in an economy.

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

A personal balance sheet, or net worth statement, captures assets minus liabilities to show financial health at a given date.

FBLA - Future Business Leaders of America Practice Test