1.  Select the ordered pair that best completes the following: "Suppose a parent tells his or her high school age child, 'The best thing you can do financially is get the interest thing working for you--that is, get on the side of earning interest for yourself, instead of paying out interest to a bank, etc.' Critics point out this requires _______________  something that can normally take time.  Someone receptive to the Work, Play, Pay As You Go Approach, points out that compensating for lack of money with ______________can help overcome this."  

1) accumulating capital to invest, usury                 2)  accumulating capital to invest, sweat equity 

3)  discounting the future, usury                             4)  discounting the future, sweat equity    

5) incurring an opportunity cost, adopting a net present value perspective

Response

2. Select the ordered pair that best completes the following: "A father teaches his son to ________________ and to figure out that $10,000 invested at fixed annual interest rate of 6% / year will be worth ( in today's dollars) $20,000 in ____________________. 

1) write and solve a simple algebra equation, 7.2 years 

2) use the Rule of 72,  years,  7.2        3) use the Rule of 72,  12 years 

4) understand discounting and net present value,  12 years 

5)  understand discounting and net present value,  7.2 years  

3. Which of the following associations is inappropriate or wrong?

1) credit score / gauges risk to lenders       2) Protestant Work Ethic / hard work, self reliance, frugality    

3) compound interest / fixed principal       4) play hard /  spending time pursuing a thoroughly enjoyable avocation      

5) Giving away what you don't need   / the basis for the gift economy 

4.  All of the following terms logically belong together except which? 

1)  acting on leverage possessed              2) investing "sweat equity"                  3) seeking instant gratification       

4) lack of self control                               5) getting a mortgage to buy a house 

5.  All of the following are examples of incurring ecological debt except which?  

1) eating food produced by sustainable organic farming practices and burying the waste in a compost pile       

2) using nuclear fission to produce electricity and the burying radioactive waste       

3) burning fossil fuels and putting massive amounts of carbon dioxide  into the atmosphere 

 4) using disposable plastic water bottles       5)  clear cutting a forest on a steep slope leading to massive erosion 

6.  Based on financial factors only, the biggest argument against a young person choosing the Work, Play, Pay As You Going approach over going with the Borrowing Mentality is ________________________________ .  

1) opportunity cost considerations 

2) lack of incentive to work hard given high  interest rates                 

3) lack of incentive to work hard given zero interest rates    

4) lack of leverage on the front end and wanting to have now, pay later         

5) lack of money to pay upfront and wanting to have now, pay later   

7.  Based on environmental factors only, the biggest argument against a young person going with the Borrowing Mentality rather than the Work, Play, Pay As You Going approach is________________________________ .  

1) fear that massive ecological debts coming due could compromise your future and everyone elses'   

2) fear that using non-renewable resources will lead to their running out compromising your future 

3) fear that self administered guilt could mess with your head given "common good" considerations      

4) fear that societal administered guilt may be tough to deal with given "common good" considerations 

5) fear that you will be ostracized by your peer group given "common good" considerations 

Response

8.  Which of the following bumpersticker messages connects best with the meaning of "discounting the future?"

1) "Insatiable is not sustainable"                        2) "One people, one planet, one future"     

3) "GET INVOLVED...the world is run by those who show up!"        4) "I'm spending my children's inheritance"

5) "Encourage your hopes, not your fears!"

9. One key ethical argument against bankruptcy hinges around the question, "What if everyone so flagrantly reneged on promises to pay debts?"  Which of the following people is most likely is behind this argument?

 1) a utilitarian raising the universality question          2) a utilitarian raising the usury question  

 3) a lawyer specializing in bankruptcy law                4) a priest concerned about "What would Jesus do?" 

5) an accountant specializing in finding tax loopholes 

10.   Select the ordered pair that best completes the following: "In recent years the USA national debt has ballooned due to changes in tax laws, and measures taken to combat the corona virus pandemic / related economic impact. Critics who see the nation's economy as "awash in red ink," charge that the government essentially is printing dollar currency as if it can do this without consequence.  The expected consequences suggested by economic theory  are that ______________ with _____________ settling in.   

1) the value of the dollar will increase, interest rate decreases              

2)  the value of the dollar will decrease, the realization that opportunity costs have been incurred                         

3)  the value of the dollar will decrease, scarcity 

4) the value of the dollar will decrease, inflation             5) the value of the dollar will increase, inflation 

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       For Choice #48:

       Your Score on the Self Test = correct out of 10 possible