Extra Questions

Question 1

According to the Second Law of Demand, when the price of a product increases, consumers will reduce their consumption more in the ______ than the _____.

Answer 1

Long run; short run

Question 2

Demand for products is more elastic in the _____ than in the _____.

Answer 2

long run; short run

Question 3

How does a change in quantity supplied affect the supply curve?

Answer 3

It is identified as movement along the supply curve

Question 4

What kind of economic indicator is a change in consumer sentiment?

Answer 4

Leading economic indicator

Question 5

What kind of economic indicator is the average prime rate charged by banks?

Answer 5

Lagging economic indicator

Question 6

What kind of economic indicator is a change in the CPI?

Answer 6

Lagging economic indicator

Question 7

What kind of economic indicator are orders for durable goods?

Answer 7

Leading economic indicator

Question 8

What kind of economic indicator is average duration of unemployment?

Answer 8

Lagging economic indicator

Question 9

What kind of economic indicator is a change in the money supply?

Answer 9

Leading economic indicator

Question 10

What kind of economic indicator are housing starts?

Answer 10

Leading economic indicator

Question 11

How can an advisor satisfy the brochure rule? (2)

Answer 11

1. Advisor can provide the client with Form ADV, Part II or

2. Advisor can provide an actual brochure that contains the same information that would be found in Form ADV, Part II

Question 12

This law provides that a right of rescission clause must be included in a loan contract allowing the borrower three business days to nullify the contract.

Answer 12

Truth in Lending Act

Question 13

A recession is a decline in GDP for ___ or more consecutive quarters. A depression is a decline in real GDP for ___ or more consecutive quarters.

Answer 13

2; 6

Question 14

This rule states that damages assessed against a negligent party should not be reduced simply because the injured party has insurance protecting against a specific peril

Answer 14

Collateral source rule

Question 15

What common exclusions apply to all forms of homeowners insurance policies? (8)

Answer 15

1. water damage
2. neglect
3. ordinance of law
4. earth movement
5. power failure
6. war
7. nuclear hazard
8. intentional loss

Question 16

What must occur to obtain a viatical settlement? (4)

Answer 16

1. Insured must be terminally ill
2. Insured must have owned the policy for at least two years
3. The current beneficiary must sign a release or waiver
4. The insured must sign a release allowing the viatical settlement provider access to his medical records

Question 17

The type of hazard that deals with negligence or carelessness?

Answer 17

morale hazard

Question 18

What are the requirements of the insured after an automobile accident? (4)

Answer 18

1. Permit the insurer to gather medical reports and other relevant records
2. Send the insurer notices and legal documents related to the claim
3. Submit proof of loss
4. Submit to a physical exam if it is relevant to the claim

Question 19

This is a type of split-dollar life insurance policy in which the employee owns the death benefit and the employer pays the premium and owns the cash value?

Answer 19

Endorsement Method