Financial Intelligence Quiz

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Do you use facebook?

Photo of a smartphone with the Facebook application open
Economics is greatly impacted by how well information travels through society. Today, social media giants Twitter, Facebook, and Instagram are major forces on the information super highway. (Credit: Johan Larsson/Flickr)

Decisions ... decisions in the social media age

To post or not to post? Every day we are faced with a myriad of decisions, from what to have for breakfast, to which route to take to class, to the more complex—“Should I double major and add possibly another semester of study to my education?” Our response to these choices depends on the information we have available at any given moment; information economists call “imperfect” because we rarely have all the data we need to make perfect decisions. Despite the lack of perfect information, we still make hundreds of decisions a day.

And now, we have another avenue in which to gather information—social media. Outlets like Facebook and Twitter are altering the process by which we make choices, how we spend our time, which movies we see, which products we buy, and more. How many of you chose a university without checking out its Facebook page or Twitter stream first for information and feedback?

As you will see in this course, what happens in economics is affected by how well and how fast information is disseminated through a society, such as how quickly information travels through Facebook. “Economists love nothing better than when deep and liquid markets operate under conditions of perfect information,” says Jessica Irvine, National Economics Editor for News Corp Australia.

This leads us to the topic of this chapter, an introduction to the world of making decisions, processing information, and understanding behavior in markets —the world of economics. Each chapter in this book will start with a discussion about current (or sometimes past) events and revisit it at chapter’s end—to “bring home” the concepts in play.

Introduction

In this chapter, you will learn about:

  • What Is Economics, and Why Is It Important?
  • Microeconomics and Macroeconomics
  • How Economists Use Theories and Models to Understand Economic Issues
  • How Economies Can Be Organized: An Overview of Economic Systems

What is economics and why should you spend your time learning it? After all, there are other disciplines you could be studying, and other ways you could be spending your time. As the Bring it Home feature just mentioned, making choices is at the heart of what economists study, and your decision to take this course is as much as economic decision as anything else.

Economics is probably not what you think. It is not primarily about money or finance. It is not primarily about business. It is not mathematics. What is it then? It is both a subject area and a way of viewing the world.

Quiz PDF eBook: 
Financial Intelligence Quiz
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11 Pages
2012
English US
Educational Materials



Sample Questions from the Financial Intelligence Quiz Quiz

Question: What is the banking federal funds rate?

Choices:

The interest rate that banks charge their private clients

The interest rate that the Fed charges when it loans money to the banks

The interest rate they’re charged when the banks loan money to each other

Question: What is the Federal Reserve System FED discount rate?

Choices:

The interest rate that banks charge their private clients

The interest rate that banks are charged when they borrow from the Fed

The interest rate they’re charged when the banks borrow from each other

Question: When did the precious metals such as silver and gold start circulating as money?

Choices:

3500 BC

2500 BC

1500 BC

Question: What is the main role of the U.S. Federal Reserve System FED?

Choices:

Collects income tax payments from U.S. citizens

Hands over the employees' paychecks

Controls the U.S. money supply

Question: What is the banking Ripple Effect?

Choices:

When the banks refuse to lend each other

When the banks refuse to lend the private sector

When the scale of recursive deposit and lending process causes the amount of money in circulation to multiply

Question: When did President Nixon took the United States off the gold standard and abandoned the silver exchange?

Choices:

1951

1961

1971

Question: What is the banking prime interest rate?

Choices:

The interest rate banks charge their corporate or private clients with the highest credit rating

The interest rate banks charge their corporate or private clients with the lowest credit rating

The interest rate they’re charged when the banks loan money to each other

The interest rate that the Fed charges when it loans money to the banks

Question: When was the U.S. Federal Reserve System FED established?

Choices:

1813

1913

1944

Question: What is fiat currency compared to real money?

Choices:

Fiat currency preserves it's value over time and considered as is an equity instrument.

Fiat currency is money that could be exchanged for precious metal.

Fiat currency has no intrinsic value and can’t be redeemed for precious metal.

Question: Which of the following investment risks can be moderated by forms of diversification?

Choices:

Reputational risk

Financial risk

Legal risk

IT risk

Question: When did the very first paper money was issued?

Choices:

in Egypt 2500 BC by the Pharaoh Thutmose III

in France 1682 by Napoleon Bonaparte

in China 1282 by the emperor Kublai Khan

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