Social Studies Module 4

Which entrepreneur has succeeded in television and film and started many philanthropies?

Oprah Winfrey

How does the stock market affect the economy?

People who purchase shares of stock are helping those businesses grow and expand.

Imagine that the Federal Reserve decides to sell fewer securities like Treasury bonds. What do you expect would happen?

People would invest their money in other goods and services, which should help the economy grow.

Which of the following represents the most suitable use for revenue generated by a federal tax?

Purchasing new planes for a military campaign

Which of the following best describes the Federal Reserve?

The Federal Reserve is the central bank of the United States, created to provide the nation with a safe, flexible financial system.

Suppose the Federal Reserve wants to make a change to improve the national economy. In which area would it have the most direct effect? Why?

The amount of money flowing into businesses and homes: It has the ability to regulate how much money is in circulation.

Which best explains why so many people take out a loan from a bank to purchase a home?

The cost of a home is so high that it would take too long to save up the full amount.

Outdated internet stories cause rumors that a certain kind of tomato is causing illness and death. This story is completely false for current tomato crops, but it is still spread by word of mouth and even by television news reports. What will most likely be the outcome of this event?

The demand for tomatoes will decrease and tomato prices will fall.

When Heather's sister spends more than she makes, she has to use her credit card to pay for purchases. Which of the following is comparable to this scenario at the governmental level?

The government increases the national debt to pay for a war.

If a state legislature designates an area of land as a wildlife preserve instead of creating a new town, what would the opportunity cost be?

The income tax earned from potential businesses

One way the Federal Reserve responds to a sluggish economy is by reducing the federal interest rate. In response to this, people are more likely to apply for bank loans. What long-term effect could reducing the federal interest rate have on the economy?

The increase in the supply of money could cause inflation, which could slow down the economy even more.

A restaurant chain borrows $100,000 from a bank. Over eight years, the restaurant chain will pay the loan back in monthly payments which will total $130,000. Why would the business take out a loan when it will pay out more than it receives?

The profits they expect to make are greater than the additional amount they will have to pay back.

How do government regulations like the Sherman Antitrust Act benefit Americans?

They keep competition open and fair.

A local shoe store is offering the following coupon: "Buy ONE pair of shoes and get the second pair FREE!" Which of the following best explains what would motivate the store owner to create this offer?

To attract more customers

When the Federal Reserve Bank issues _________, it is increasing ________.

bonds; debt

A country with a command economy would have a

government that determines how much to produce in consumer goods

"Come to 'Cars Are Us'! We reduced this year's models up to 50%! It's time to make room for next year's new cars! Hurry on down so you don't miss out!"-Radio advertisement The main goal of this business's advertisement is to

motivate people to purchase a car by making them think it is the best deal they can get all year

An antitrust law

prevents one business from becoming the only provider of a product

Most state and local government revenues come from

sales and property taxes to support education and public safety

The price of goods can increase because of

scarce supply

A country with a market economy would have a

society that encourages individuals and business firms to seek profits

The main purpose of both the national budget and a household budget is to

track income and expenses

When you have to give up something upon making a choice, this is called a(n)

trade-off

Government must support the common good by establishing electric utility monopolies and regulating all trade agreements that allow goods to enter the country. Who would have disagreed with this comment and why?

Adam Smith would have disagreed with this statement. He believed government should not regulate the economy or control trade.

Many banks and mortgage companies offer special low-interest loans to first-time homebuyers. Which of the following is the most likely outcome of this action?

An increase in the number of homes sold

Which statement best explains the difference between a bank and a credit union?

Both provide banking services such as loans, checking accounts, and savings accounts, but a bank is privately owned and a credit union is owned by its members.

A new fashion trend has started in Miami Beach, located in Dade County, Florida. Which county would be most likely to experience this trend through cultural diffusion? Why?

Broward: It is the closest.

Which of the following shows a direct way that a new government regulation requiring child safety seats in vehicles would promote business competition?

Child seat makers would compete to offer the safest seats with the best features for parents.

The Americana Clothing Company, based in Rhode Island, is a clothing brand influenced by the New England lifestyle. Which state would be most likely to experience cultural diffusion of this clothing brand?

Connecticut

Which entrepreneur named below was motivated by a desire to own a product he or she first saw on TV?

Daymond John

Which entrepreneurs have focused mainly on fashion?

Daymond John and Vera Wang

Expenses for the United States military are covered by which of the following?

Federal tax revenue

Which of the following correctly explains where banks get the money to lend consumers?

From people who open accounts

Kiara's parents have a budget with many categories. Which of the following is an example of their monthly fixed expenses?

Housing

Mr. and Mrs. Clancy own a company called "Clancy's Bakery". The map indicates each state that has one or more of the bakeries. Where are Mr. and Mrs. Clancy most likely to open a new location for Clancy's Bakery?

Louisiana would most likely be next because it is closer to the locations that already exist.

Which of the following best compares state and federal laws concerning government debt?

Most state governments have laws requiring balanced budgets, while the federal spending and debt can go over budget.

Mary Gordon owns a local coffee shop. Coffeeco, a national coffee chain, opens a store down the street from Mary's shop. Coffeeco is known for extremely cheap coffee. What is the best course of action for Mary to take to remain competitive?

Offer goods and services that Coffeeco doesn't have.