|Name: _________________________||Period: ___________________|
This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.
Multiple Choice Questions
1. According to the author in Chapter 7, the basic set of rules and investor should follow is to do what?
(a) Research, fact check, invest.
(b) Save, invest, and repeat.
(c) Research, invest, watch.
(d) Invest, watch, sell.
2. What is the third simple need of financial markets, as discussed in Chapter 7?
(a) Raising capital.
(c) Insuring against risk.
(d) Storing, protecting and making profitable use of excess capital.
3. According to the principles of a market economy, if it's raining, it's time to sell what?
4. What is an investment position intended to offset potential losses that may be incurred by a companion investment?
(a) Futures contract.
5. Gary Becker was awarded the Nobel Memorial Prize in Economic Sciences in what year?
Short Answer Questions
1. What is a mathematical equation for an unknown function of one or several variables that relates the values of the function itself and its derivatives of various orders?
2. What is an economic model of price determination in a market that concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers?
3. In an insurance policy, what is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses?
4. What is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities?
5. When was Burton G. Malkiel born?
Short Essay Questions
1. What example does the author give for the negative effect of incentives in Chapter 2?
2. What is a "diversified portfolio"? What does the author state regarding this in Chapter 7?
3. What is the first of the basic needs the author boils down for investment markets in Chapter 7?
4. How does human capital relate to productivity? How does this in turn reflect the economic well-being of a nation, according to the author in Chapter 6?
5. What is the basic set of rules put forth by the author for those looking to invest in Chapter 7? How are risk and reward described?
6. What are the ramifications of decisions made in the world of finance and legislation, according to the author in the Introduction?
7. What is the difficulty of studying economics, according to the author of the Foreword? What is the role of economics in everyday activities?
8. How has the market economy contributed to a higher standard of living in America, according to the author in Chapter 1?
9. How is the black rhinoceros described in Chapter 2? What are the horns of the animal worth in Yemen, and why?
10. How does the author of the Foreword describe Charles Wheelan's approach to explaining economics in "Naked Economics: Undressing the Dismal Science"?
This section contains 1,006 words
(approx. 4 pages at 300 words per page)