macro (econ unit 3) test

In the circular flow model, factors of production flow to firms. Which of the following are the primary factors of production? Check all that apply. labor capital goods land services

1,2,4

This graph shows changes in GDP and the unemployment rate in the United States in recent years. In what year would someone looking for work have had the hardest time finding a job? 2008 2009 2011 2012

b

Inflation causes money to........ value over time.

lose

Income reaches the highest level at the point of the business cycle.

peak

Which statement best describes why a government's actions are important in macroeconomics? Check all that apply. Government controls industry through policy. Government is both a consumer and a producer. Government can prevent changes and challenges. Government can use policy to influence the economy. Government can accurately predict economic trends.

1,2,4

Which factors can affect a stock's price? Check all that apply. market performance the company's financial health the quantity products produced location of the company the economy

1,2,5

What is true of representative money? Check all that apply. It can be exchanged for a valuable good. It was once the most common form of money. It was used in systems involving a "gold standard." It can be traded for a commodity such as silver. It is made with precious metals or stones.

1,3,4

Why might buying a home during a recession be a good decision for some consumers? Choose three answers. Housing prices are down. It is easier to get a mortgage. Less demand means more options for buyers. Less demand means less competition with other buyers. Fewer houses are on the market.

1,3,4

What advantages does money have over bartered goods? Check all that apply. Money is easy to earn, and bartering takes a lot of work. Money has a set value, and bartered goods do not. Money is more portable than bartered goods. Money is always worth more than bartered goods. Money allows people to easily store value they ea

2,3,5

What decisions does the business cycle help businesses make? Choose four answers. whether to stay at old facilities or move to new facilities whether to grow or shrink the business whether to keep or change products whether to increase or decrease production whether to hire or lay off workers whether to invest or save money

2,4,5,6

Which are the most likely uses of capital invested in a business? Check all that apply. paying taxes hiring workers repaying investors producing goods distributing goods buying materials

2,4,5,6

Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Check all that apply. cyclically unemployed domestically unemployed frictionally unemployed structurally unemployed still employed unemployed

4,6

The most common measure of inflation is a statistic called the

CPI

Capital appreciation refers to the increased value of an asset. the ability to make a profit from owning stock. the distribution of earnings to shareholders. the profitable sale of shares.

a

During a recession, what is one way governments try to encourage growth? by increasing unemployment benefits by stopping government spending by requiring firms to maintain production by eliminating all tax breaks

a

How do consumers' feelings about the economy help contribute to growth? Positive consumer attitudes influence spending habits. Positive consumer attitudes increase job prospects. Positive consumer attitudes inspire increased production. Positive consumer attitudes can end a depression.

a

How does demand-pull inflation differ from cost-push inflation? Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers. Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers. Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government. Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.

a

People might choose to use a debit card rather than cash for purchases because they do not want to carry around large amounts of cash. their banking institutions charge high fees for cash withdrawals. most items cost less when purchased with a debit card. debit cards have a higher value than cash and can buy more.

a

Read the paragraph. Government officials in Country M have determined that they need to take action to encourage the growth of their economy. To do this, they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who sign a contract agreeing to work within their specific industry for the next ten years. Country M hopes to encourage economic growth by investing in education to reduce unemployment and increase production. new technologies to produce goods that are in great demand. resources that can be traded with other nations. research to develop goods that can be sold on a global scale.

a

The circular flow model examines interactions between which two groups? households and firms households and consumers firms and producers firms and government

a

There are five stages in a recession. 1. job loss 2. falling production 3. falling demand (occurs twice) 4. peak production In which order do these stages occur? 4, 3, 2, 1, 3 3, 2, 1, 3, 4 4, 3, 2, 3, 1 4, 2, 3, 1, 3

a

What is the name of the period when an economy begins to shrink? recession depression recovery peak

a

When might it be important to know a currency's exchange rate? when planning expenses for an overseas trip when changing money into smaller denominations when preparing to buy something expensive when deciding which college is the best value

a

Which best describes the purpose served by economic models within an economic system? Models identify patterns. Models determine the business cycle. Models control change. Models define global demand.

a

Which of the following best describes the circular flow model? The model represents the movement of money throughout the economy. The model represents the interactions within sectors. The model represents the flow of goods and services between sectors. The model represents the changing relationships between actors.

a

Which types of investments are securities? both debt and equity debt only equity only neither debt nor equity

a

A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society? The society's supply and demand have stagnated. The society is using all of its resources efficiently. The society's needs are being fully met. The society is not using all of its resources effectively.

b

One fact about all currency is that it loses value over time. has a changing value. maintains a stable value. grows increasingly valuable.

b

The aggregate is a type of economic system. the total number of goods demanded or supplied. a form of revenue. the total profit made on sales.

b

The aim of the study of macroeconomics is to examine the interactions between individual producers and consumers. the behavior of factors affecting the economy. the relationship between supply and demand. the economy's viability.

b

The equation calculates an annual rate in economics. final value-initial value / initial value (100) What rate does the equation calculate? employment rate inflation rate demand rate supply rate

b

The level of investment in markets often indicates the stability of the government. the state of the economy. the success of individual companies. the stability of a currency.

b

What is one problem that might commonly occur when one is bartering? Someone wants to trade a valuable item for a less valuable one. Two people have different ideas about the value of an item. Someone wants to barter a good in exchange for a service. Two people want to trade items of equal or nearly equal value.

b

Which best describes what generally occurs in financial markets? Debt and loans are traded. Assets are traded. Commodities are traded. Shares are traded.

b

Which best describes why taxes and savings are considered leakage factors? They take money out of households. They take money out of the economic system. They take money out of the economic sectors. They take money out of the financial sector.

b

Which describes an investor's primary goal of buying a loan? to grow a business to earn a profit off the interest to bolster the economy to provide capital to a business

b

Which federal agency calculates the Consumer Price Index (CPI)? US Census Bureau US Bureau of Labor Statistics US Department of Commerce US Department of the Treasury

b

Which is an effect of stagflation? Trade with other economies increases. The value of a country's currency drops. Prices for goods fall sharply and suddenly. The GDP rises along with production levels.

b

Which is the best definition of inflation? a gradual decrease in the price of goods and services a gradual increase in the price of goods and services an exponential decrease in the price of goods and services an exponential increase in the price of goods and services

b

Which statement best describes how an investor makes money off debt? An investor makes money by issuing bonds. An investor makes money by earning interest. An investor makes money by raising capital. An investor makes money by being repaid for the principal.

b

Which statement best describes why it is difficult to sell a home during a recession? Mortgage rates are high. Demand greatly decreases. Mortgages become unavailable. Housing prices increase.

b

Which unemployment rate do most economists consider to be acceptable in the United States? 0 percent 5 percent 10 percent 20 percent

b

How do bonds generate income for investors? Bonds depreciate in value. Bonds protect investors from bankruptcy. Bonds pay interest to the bank that sold the bond. Bonds pay a specified amount to the investor at maturity.

b i think dont count on me for this one, def not c or d tho

_____are debt certificates that are purchased by an investor.

bonds

A currency is a system of money created and used by an individual or a group of people. all people who live in the same era. a nation or region of the world. a town, city, or state within a region.

c

An increase in gross domestic product (GDP) is a sign that a country's economy is declining. stagnant. growing. depressed.

c

In microeconomics, what occurs when equilibrium is reached? Prices decline. Prices increase. Prices are set. Prices fluctuate.

c

This graph shows merchandise export data for the years 2010 through 2012. Which statement most accurately describes the information presented on the graph? The United States exported more merchandise than any other nation. The United States exported more than $2 trillion worth of goods in 2012. China exported more goods than the United States from 2010 to 2012. China exported more than $2 trillion in goods for each year on the graph.

c

To barter means to sell. create. trade. earn.

c

Typically, high inflation is a sign of a healthy economy because it results from a fall in production costs. a healthy economy because it results from a rise in consumer interest. a struggling economy because wages cannot keep up with the increase in prices. a struggling economy because it results from a fall in consumer interest.

c

What term is used in macroeconomics to describe the total supply and the total demand? capital inflation aggregate equilibrium

c

What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills? People would be more likely to confuse the value of currencies. Exchanging money between countries would be much easier. People could not charge as many different prices for goods. All goods would be more expensive than they currently are.

c

Which best describes how a recession develops as demand and production decrease? The recession enters a recovery period. The recession slows. The recession accelerates. The recession starts and stops.

c

Which best describes the role that government and business play in investments? They both use taxes to support a country's growth. They both invest money to earn a profit. They both receive capital to use for growth. They both act as angel investors for start-ups.

c

Which best describes what occurs in the product market? the exchange of labor for capital the exchange of goods and services for factors of production the exchange of goods and services for money the exchange of money for factors of production

c

Which best describes why investing can be such a challenge? All investments involve major risks. There is never a sure way to predict the likelihood of success. There are no guaranteed investments. The market is totally unpredictable.

c

Which of these scenarios involves commodity money? A girl writes a check to her friend for a stack of valuable comic books. A boy starts a lemonade stand and sells each drink for twenty-five cents. A woman offers her neighbor a US silver dollar in exchange for a bicycle. A man buys some T-shirts and pays with a US fifty-dollar bill

c

Which scenario best reflects the relationship between production and demand in a recession? Car dealerships have minimal overstock. Car dealerships are not restocking. Car dealerships cannot sell their stock. Car dealerships cannot obtain stock.

c

Why must old currency be taken out of circulation when new currency is made? The old currency is more valuable than the new currency. The new currency is much more liquid than the old currency. Too much currency in an economic system will cause inflation. Too much currency in an economic system will create artificial wealth.

c

Hyperinflation can occur when consumers begin purchasing more goods. producers need more money to make and distribute goods. companies raise prices to pass on costs to consumers. the government prints a ton of money in order to pay off its debt.

d

Sometimes an economy cannot grow because of external factors, such as lack of skilled labor. poor infrastructure. low domestic demand. low demand for exports.

d

There are four stages in an economic recovery. 1. increased production 2. rising demand (occurs twice) 3. increased hiring In which order do these stages occur? 2, 1, 2, 3 3, 2, 1, 2 2, 3, 1, 2 2, 1, 3, 2

d

Which best describes what injector factors bring to an economic system? factors of production imports consumers money

d

Which is an example of a demand account? savings account investment account credit account checking account

d

Which is true about investments and risk? Low-risk investments have a high return over the long run. High-risk investments usually fail. Safe investments are always somewhat profitable. Every investment carries some degree of risk.

d

Which stage of the business cycle is an economy in when it reaches its low point? Expansion Peak Contraction Trough

d

Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States? Gasoline costs more to produce and purchase than tomatoes. Gasoline is imported from other nations at a higher rate than tomatoes. Americans purchase many more boxes of tomatoes than barrels of gasoline. Americans spend more money on gasoline than tomatoes, on average.

d

The exchange of factors of production for income occurs in the ___market.

factor