Econ Final

To an economist, public goods are defined as goods that

are used or consumed collectively by the population

Demand is best defined as the measure of how much consumers are able and willing to buy

at different prices at a particular time

In economics, the term "demand" refers to the quantities of a goods that people will buy

at different prices at a particular time.

Supply is best defined as the measure of how much producers are willing and able to sell

at different prices in a given period of time

The future of globalization means

more trade between countries

An individual's wealth after debts and other obligations have been subtracted is known as their

net worth

An economist would argue that of the following choices, structural unemployment would most likely be caused by

new entrants into the labor force

The Federal Reserve is best described as

the central banking system of the United States

To an economist, wages are part of

the cost of maintaining labor resources

In a pure market economy, prices are generally determined by

the exchanges between buyers and sellers

Which of these probably has the GREATEST overall influence on labor costs?

the forces of supply and demand

In a savings account, "Principal" is BEST described as

the initial amount of savings placed on deposit

The inverse relationship between the price of a product and the quantity that consumers will buy is known as

the law of demand

Which of these does the Federal Reserve System control most DIRECTLY?

the money supply in the United States economy

According to the textbook, "rate of return" is described as

the percentage of interest or dividends paid on savings or investments

An economist would probably define the EXCHANGE RATE as

the price of one nation's currency in relation to another currency

In economics, a shortage of a product occurs when

the product's price falls below its market-clearing level

In economics, the term supply refers to

the quantities of a good or service a producer is willing and able to sell at different possible prices

The market equilibrium price is the price at which

the quantity demanded is the same as the quantity supplied

Producers usually sell more at higher prices than at lower prices because

their marginal costs usually rise as they increase production

Which of the following BEST explains why a computer database designer is likely to have greater earning potential than a technician who repairs typewriters?

: Database design has a higher market value than typewriter repair services

According to the textbook, a mutual fund is best described as

: a pool of money used by a company to buy assets such as stocks or bonds, on behalf of shareholders.

According to the textbook, "compound interest" is described as

: the interest calculated on the sum of savings plus the accumulated interest.

Which of the following transactions would most likely be included in the calculation of a country's gross domestic product?

A bakery earns $750 one month from cake sales

Which of the following statements about investing in human capital is most likely true?

All of the above

Demand for automobiles tends to be price-elastic because automobile

are large expenditure items

Which of the following statements about international trade is most likely true?

Each country can import only if another country exports.

Which of the following effects would a government considering a gasoline tax most likely classify as a NEGATIVE incentive?

Gasoline taxes will reduce overall consumer spending.

Which of the following statements about unemployment in the United States is TRUE?

In order to be considered unemployed, a person must be looking for work.

Which of the following statements about competition in a market economy is TRUE?

It affects supply and demand schedules.

Which of the following characteristics has the GREATEST effect on whether an item can be used as money?

It must be commonly accepted as payment.

Which of the following is likely to increase the demand for peanut butter?

News that insects have destroyed much of the peanut crop

If the DEMAND for product B tends to fall immediately after the PRICE for product A falls, which of these conclusions is most likely?

Products B is a substitute for Product A

What is the best definition for "liquidity"?

The ease at which any asset can be converted to cash.

What is the best definition for "gross domestic product"?

The final value of all goods and services produced in the country in one year.

Which of these actions is probably most influenced by non-economic goals?

The government imposes pollution controls on an industry.

Which of the following statements about the money supply in the United States is MOST LIKELY true?

The money supply has an effect on the prices consumers pay

When demand and supply for a product are equal, which of the following is most likely true?

The product's market clears

Which of the following describes the way the GREATEST NUMBER of people earn income in the United States?

They supply labor to organizations that provide goods or services

An economist would most likely define an EXTERNALITY as

a cost paid by someone who is neither the producer nor consumer of a product

When government revenues exceed government spending, the result is

a federal budget surplus

By definition, which of these is created whenever buyers and sellers exchange goods or services?

a market

The United States economy is best described as

a mixed economy with market and government elements

Demand for insulin tends to be price-inelastic because the drug is considered

a necessity

According to economic principles, a tax on an item such as bread would be considered

a regressive tax

When people use money to save for goods and services they will purchase at a later date, they are using money as

a store of value

Incomes may be different from one group of people to the next because of

all of the above

Economic growth in a country

all of the above.

Which of the following people would probably find gross domestic product (GDP) statistics most useful?

an economist comparing a country's economic growth from one year to the next

If the profit opportunity for a given product increases, the most likely result would be

an increase in the number of producers

When something is produced, there is always

an opportunity cost.

Which term means "the cost of credit calculated as annual percentage of of the principal borrowed"?

annual percentage rate

In a market economy, the money supply increases when

banks make loans

Profit is one of the main incentives for nearly all

businesses

During periods of rapidly increasing inflation rates, a person's salary will

buy fewer goods than before

According to the textbook, collateral is best described as

capital acceptable to a lender for a loan

A major factor in the decline of manufacturing jobs from the early 1900s to the late 1990s was the result of

changes in technology

During one month, the price of a product rose 20%. This most likely occurred because of an increase in

consumer demand

Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States?

consumer spending, business investment, government spending, net exports

When overall demand for labor is low, an increase in the nation's unemployment rate is most likely the result of

cyclical unemployment

An economist would probably agree that demand and supply schedules are PRIMARILY based on

decisions made by consumers and producers in a market

If the price of a product falls, producers are likely to

decrease production to lower marginal costs

An economist would most likely agree that a key advantage of money as a medium of transactions is that it

decreases the cost of the exchange

If consumers readily switch to substitutes when the price of butter increases by only a small amount, the demand for butter is said to be

elastic

Which of these BEST illustrates an effort made by the United States government to ensure fair competition in the marketplace?

enforcing antitrust legislation

During which period of the business cycle do most businesses make the greatest increases in spending levels?

expansion

Demand for a product tends to be price-inelastic when the product has

few if any substitutes

If the minimum wage is set too high, some economists believe the result might be that

fewer jobs will be available at that price

The business cycle is a term used to describe the

fluctuations (increases and decreeases) in business activity over time

An economist would argue that according to the principle of comparative advantage, a country should generally

focus productive resources on what it does best relative to other nations

One of the benefits of trade barriers is that they may

help a nation's newest industries develop successfully

Fiscal policy refers to the power of the federal government to

impose taxes and spend tax revenues

Which of the following provides the federal government with the GREATEST amount of revenue?

income and payroll taxes

If a good or service is in high demand, this can

increase the wages of workers

Tariffs or quotas on imports are most likely to cause

inefficient production

The consumer price index (CPI) is used to measure

inflation

In a market economy, goods are most often produced as a result of

interaction between buyers and sellers

Which of the following terms could an economist use to describe the cost of borrowing other people's money?

interest

Economists generally consider money to be preferable to using a barter system because it makes exchanges

less costly

In international trade, an import quota is best described as something which

limits the quantity of an item that can be imported

People are more likely to buy new houses in an economic environment that includes

lower interest rates for home loans

Which of these is the most likely effect of an increase in the cost of production?

lower levels of production

Which of these activities is beyond the traditional role of the FEDERAL government?

paying for local police services

Responses to incentives are predictable because

people generally pursue their own interests

A DEFLATIONARY period is best described as a period of time in which

prices for goods and services decrease

People who create goods and services are most commonly called

producers

The Social Security and Medicare systems illustrate the United States government's effort to

promote economic security

A labor union or other group would most likely argue in favor of trade barriers as an effective way of

protecting domestic jobs in a specific trade or industry

Imports are best described as goods that have been

purchased from other nations

The market-clearing price is the price at which

quantity supplied equals quantity demanded

An economist would most likely agree that specialization

reduces self-sufficiency but increases productivity

An economist would probably agree that prices set by supply and demand are primarily measures of the

relative scarcity of goods or services

Which expense is most likely a fixed cost?

rent for a company's warehouse

A proportional tax is best described as a form of taxation that

requires all citizens to pay an equal percentage of their incomes to taxes

Exports are best described as goods that have been

sold to consumers in other countries

Which of the following institutions is responsible for controlling the money supply in the United States economy?

the Federal Reserve

The purchase of a new product in a market economy is an act of

voluntary exchange

In a market economy, prices are affected by all of the following EXCEPT

welfare

Labor unions typically negotiate wages, employee benefits, and

workplace rules and practices