ECON 210 Midterm

If the Nominal Interest Rate is 5% and Inflation is 6%, what is the Real Interest Rate? Question options: A) 11% B) 1% C) -1% (Negative 1 Percent) D) Six Percent (6%)

-1% (Negative 1 Percent)

Total Population=400. People working=80. People not working but seeking a job=20. Calculate the Unemployment Rate. Question options: A) 100/400=25% B) 20/(80+20)= 20% C) 20/(400-100)= 7.5% D) 100+80/(400-100)= 45%

20/(80+20)= 20%

Which of the following is NOT correct? Question options: A) The demand schedule of a good communicates the same data as the demand curve for that good. B) The supply schedule for a good shows the same information as the supply curve for that good. C) A change in price will change the entire demand schedule for a good but will not change the demand curve. D) Demand schedules are just table forms of the same data in the demand curve.

A change in price will change the entire demand schedule for a good but will not change the demand curve.

Which of the following is NOT true about factors that cause a change in supply? An decrease in the cost of inputs will increase the quantities supplied at every price and therefore shift the supply curve to the right. An improvement in technology that improves efficiency of production will shift the supply curve to the right. Changes in producer expectations can shift the supply curve. A change in the market price of a good will change ALL of the quantities supplied and shift the supply curve.

A change in the market price of a good will change ALL of the quantities supplied and shift the supply curve.

Which of the following is NOT correct? Question options: A) The term "supply" as used by economists refers to the entire supply curve which illustrates the various quantities supplied at various prices. B) The term "quantity supplied" only refers to the specific quantity supplied at one specific price. C) An increase in the market price of a good is shown by upward (to the right) movement along a fixed supply curve (which does not shift). D) A change in the market price of a good will change the supply of that good, which is shown by a shift of the entire supply curve, which means that all quantities supplied at all prices have changed.

A change in the market price of a good will change the supply of that good, which is shown by a shift of the entire supply curve, which means that all quantities supplied at all prices have changed.

Which of the following is NOT true? A) the A change in the price of a good will change its demand (shift the entire demand curve). B) An increase in the price of a good will decrease the quantity demanded, which is shown by downward movement on the fixed demand curve, which does not shift. C) A decrease in the price of a good will increase the quantity demanded, which is shown by an upward movement along the fixed demand curve, which does not shift. D) Demand only changes and the demand curve only shifts when all the quantities demanded change. Changes in consumer preferences and consumer income will change all of the quantities demanded at all the possible prices and will thereby change the demand, which is shown by a shift of the demand curve. But a change in the price of the good does not change all of the quantities demanded at all other prices, so demand will not change in response to a change in the price of the good.

A change in the price of a good will change its demand (shift the entire demand curve).

Which of the following is the correct definition of a co-op? Question options: A) A cooperative is a special corporation endowed by government backed securities but owned by private interests. B) A cooperative is a government monopoly conferred on a regional development commission. C) A co-op is a consortium of firms banded together by commonality of output. D) A cooperative or "co-op" is a group of people who pool their resources to buy and sell more efficiently than they could on their own. Co-ops are recognized by the government as legitimate business operations and most receive tax exempt status as a result.

A cooperative or "co-op" is a group of people who pool their resources to buy and sell more efficiently than they could on their own. Co-ops are recognized by the government as legitimate business operations and most receive tax exempt status as a result.

Which of the following is NOT correct about the federal deficit and the federal debt? Question options: A) The federal deficit is the amount that federal spending exceeds federal revenues in one year. B) The federal debt is just the sum of all past deficits. C) A federal deficit results in a decline in the federal debt. D) Regular declines in annual deficits will result in a lower federal debt.

A federal deficit results in a decline in the federal debt.

What causes a decrease in the quantity demanded of a good? Question options: A) A change in consumer income of massive proportions. B) Decline in preference for the good by all buyers. C) Lack of preference for that good by most high income buyers. D) A increase in the price of the good.

A increase in the price of the good.

What change in the Production Possibilities Frontier (PPF) illustrates a contraction in economic output? Question options: A) The bowed out shape of the PPF illustrates a reduction in GDP. B) A straight line PPF shows contraction of total output in an economy. C) A rightward shift of the entire PPF shows the economy is in a recession with a severe contraction of total output. D) A leftward shift of the entire PPF shows the economy is in a recession with a significant contraction of total output.

A leftward shift of the entire PPF shows the economy is in a recession with a significant contraction of total output.

Which of the following is NOT true about the factors that cause a change in demand? If an increase in the price of Good A causes an increase in the demand for Good B, then they are substitutes. If an increase in the price of Good A causes a DECREASE in the price of Good B, they are complements. DVDs and DVD players are complements because an increase in the price of one causes a decrease in the demand for the other. A normal good is one in which its demand DECREASES as consumer income increases.

A normal good is one in which its demand DECREASES as consumer income increases.

What is the correct definition of a Positive Economic Statement? Question options: A) Positive Economic Statements reflect the values, goals and aspirations of a society. B) Positive Economic Statements are those that express positive expectations about economic forces and events. C) A positive economic statement is one that can proved true or proven false by testing it with reference to facts. It need not be true but simply able to subjected to testing to determine if in fact it is true. D) Positive Economic Statements are ones that are believed to be true.

A positive economic statement is one that can proved true or proven false by testing it with reference to facts. It need not be true but simply able to subjected to testing to determine if in fact it is true.

Which of the following is NOT true? A) A price floor is when the government enforces a market price that is less than the natural equilibrium price. B) A price ceiling is a government imposed maximum price set that is less than the naturally occurring equilibrium price. It results in a shortage. C) A price floor is a government set minimum price above the equilibrium price and it results in a surplus. D) While a price floor is set by government to benefit suppliers, a price ceiling is set to benefit those demanding a good. Removal of a price floor or a price ceiling results in price moving naturally to its equilibrium level.

A price floor is when the government enforces a market price that is less than the natural equilibrium price.

Which of the following provides the correct definition of Progressive Taxation? Question options: A) A progressive tax is a flat tax that has a rate that stays constant even as income levels rise. B) In progressive taxation, tax as a percentage of income increases as income level increases. The tax rate rises as certain income levels are surpassed. C) A progressive tax places a higher rate on the lowest tier of income earners. D) A progressive tax is a gradual tax that has a rate that stays gradual at gradual income levels.

A progressive tax places a higher rate on the lowest tier of income earners.

Which of the following is NOT true? Question options: A) A quota is one fourth of a dollar. B) A tariff is a tax placed on an import. C) A quota is a limit of the total amount of a good that can be imported or exported. D) Tariffs and quotas benefit self interested producers who lobby the government to enforce those tariffs and quotas.

A quota is one fourth of a dollar.

Which of the following correctly describes a Regressive Tax? Question options: A) In regressive taxation, tax as a percentage of income increases as income level increases. The tax rate rises as certain income levels are surpassed. B) A regressive tax is a flat tax that has a rate that stays constant even as income levels rise. C) A regressive tax is one that places a higher tax rate on upper income earners and a very low or nonexistent tax on very lower earners. D) A regressive tax hits low income earners harder than high income earners.

A regressive tax hits low income earners harder than high income earners.

Which of the following is NOT true about taxation? Which of the followig is NOT true about taxation? Question options: In progressive taxation, tax as a percentage of income increases as income level increases. The tax rate rises as certain income levels are surpassed. A proportional tax (also known as a "flat" tax) has a tax rate that remains constant as income levels rise. The marginal tax rate is the rate paid on the last dollar of income. High marginal tax rates reduce the incentives to work and save. A regressive tax is one that places a higher tax rate on upper income earners and a very low or nonexistent tax on very lower earners.

A regressive tax is one that places a higher tax rate on upper income earners and a very low or nonexistent tax on very lower earners.

Which of the following is NOT true? A) A shortage exists when the quantity demanded is just equal to the quantity supplied. B) A surplus results when the quantity demanded is less than the quantity supplied at a given price. C) A shortage exists when the quantity demanded exceeds the quantity supplied at a given price. D) Both a surplus and a shortage can be resolved by allowing the price to change to the equilibrium price.

A shortage exists when the quantity demanded is just equal to the quantity supplied.

Which of the following is NOT true about an outward shift of the PPF? Question options: A) An outward shift of the PPF illustrates economic growth, meaning that more of one good can be produced without reducing the output of the other good. B) An increase in the availability of one or more productive resources will cause the entire PPF to shift outward. C) Even if productive resources are constant, an increase in technology (know-how) can shift the PPF outward. D) A sudden and unexpected decrease in the capital stock is the most effective method of shifting the PPF outward.

A sudden and unexpected decrease in the capital stock is the most effective method of shifting the PPF outward.

Which shows the total value of all output supplied in relation to the price level? Question options: A) Gross Domestic Production B) Gross National Output Production C) Aggregate Supply D) National Output

Aggregate Supply

Which of the following is NOT true about natural resources? Question options: A) Some of the things included in the category of natural resources are lakes, copper deposits and deer. B) As a factor of production, natural resources refer to naturally occurring resources generating value that exist under the earth and on the surface of the earth. C) All natural resources are renewable or have a supply that man can never exhaust. D) As a category of productive resources, natural resources (like other productive resources such as capital or labor) are inputs used to produce the goods and serves that people want.

All natural resources are renewable or have a supply that man can never exhaust.

Which of the following is NOT correct about how tariffs impact consumers and domestic producers? Question options: A) Consumers benefit because they are able to buy imports they value above domestic versions at a cheaper price. B) Consumers lose out from tariffs because they are forced to pay a higher price for imports or they must buy the domestic version of a good at a price higher than the original price of the import before it was taxed with a tariff. C) Domestic producers who manufacture goods similar to the import with a tariff benefit because consumers become more likely to buy their higher priced good after the tariff forces the price of the import to rise. D) Tariffs benefit domestic producers of products similar to imports burdened with a tariff because the import now becomes as expensive as the domestic good, so consumers become more likely to buy the domestic good they previously rejected.

Although the most common form of business organization, corporations account for less than half of all output and revenue.

Which of the following factors does NOT account for the higher labor productivity of workers in the United States? Question options: A) American workers typically work much harder and are more dedicated to their tasks than workers in lower income countries. B) American workers are fortunate to come to work environments where the quality of capital is much higher than in other countries. C) American workers are fortunate to be able to come to workplaces that have more capital goods available (more computers, machines, tools and equipment). D) American workers are fortunate to work in places that benefit immensely from being able to put new technologies into immediate practice.

American workers typically work much harder and are more dedicated to their tasks than workers in lower income countries.

Which of the following is correct about an Economic Expansion? Question options: A) A great benefit of an economic expansion is continually falling prices. B) An economic expansion is when employment, total national output and total national income is rising, C) An economic expansion that occurs for at least 6 straight years is called a recession. D) While output increases in an expansion, job creation falls dramatically.

An economic expansion is when employment, total national output and total national income is rising,

Which of the following is NOT correct about Structural Unemployment? Question options: A) An example of structural unemployment is the situation with Joan who is taking her time seeking a new job that better fits her skill set because she is so confident in her employment prospects. B) Structural unemployment occurs because many workers lack the skills demanded by employers. C) Structural unemployment occurs because many workers simply do not live near or in the areas with the greatest demand for workers. D) An example of Structural Unemployment is Jim who was laid off as a construction worker and does not have the skill set needed by a local factory producing high tech equipment.

An example of structural unemployment is the situation with Joan who is taking her time seeking a new job that better fits her skill set because she is so confident in her employment prospects.

Which of the following is NOT true about an externality? Question options: A) An externality is a cost or benefit that accrues to third parties not directly involved in an economic transaction. B) When an externality occurs, the buyer is not affected. C) An externality is a benefit or cost that impacts only the parties directly involved in a transaction, i.e., the buyer and the seller. D) When an externality occurs, the seller is not affected.

An externality is a benefit or cost that impacts only the parties directly involved in a transaction, i.e., the buyer and the seller.

Which of the following correctly defines an Externality? Question options: A) While buyers can be impacted by externalities, sellers can never be impacted by them. B) Both buyers and sellers are equally impacted by a given externality. C) An externality is a cost or benefit that accrues to third parties not directly involved in an economic transaction. D) Only parties directly involved in a transaction are impacted by externalities.

An externality is a cost or benefit that accrues to third parties not directly involved in an economic transaction.

Which of the following is NOT correct about Aggregate Supply? Question options: A) The aggregate supply curve shows how much producers are willing and able to supply at each potential price level. B) The aggregate supply curve shows the relationship between the price level and the aggregate output in the economy (the quantity supplied of all goods and services). C) An increase in the price level will decrease aggregate supply. D) An decrease in the price level will result in a decrease in the quantity supplied of all goods and services in the economy, which is shown by downward movement along the fixed aggregate supply curve.

An increase in the price level will decrease aggregate supply.

Which of the following is NOT true about what changes demand (what changes all of the quantities demanded in the demand schedule and shifts the demand curve)? An increase in the price of a product will decrease the demand for the product.That is, it will decrease all of the quantities demanded at each and every price. A change in income changes demand. A change in consumer preferences and tastes changes demand. Changes in the prices of substitutes or complements changes demand.

An increase in the price of a product will decrease the demand for the product.That is, it will decrease all of the quantities demanded at each and every price.

Which of the following is NOT true about Aggregate Demand? Question options: A) Aggregate demand is the relationship between the economy's overall price level and the quantity demanded of aggregate output (all goods and services in the economy). B) As the price level increases, the quantity demanded of all goods and services in the economy declines, which is shown by movement upward on the fixed aggregate demand curve. C) As the price level decreases, the quantity demanded of all goods and services in the economy increases, which is shown by movement downward on the fixed aggregate demand curve. D) An increase in the price of walnuts will decrease the aggravated demand for walnuts.

An increase in the price of walnuts will decrease the aggravated demand for walnuts.

What are intermediate goods and why aren't they included in GDP? Question options: A) An intermediate good is one that is produced by consumers for personal consumption. They are not included in GDP because doing so would result in illegal counting. B) An intermediate good is one that is produced intermittently. They are no included in GDP because they are not produced every day. C) An intermediate good is one that is produced to produce other consumer goods. They are not included in GDP because doing so would result in double counting because their value is already reflected in the value of the final good. D) An intermediate good is a final consumer good that is consumed immediately upon purchase. They are not included in GDP because only goods that remain intact at least one day before consumption are included in GDP.

An intermediate good is one that is produced to produce other consumer goods. They are not included in GDP because doing so would result in double counting because their value is already reflected in the value of the final good.

Which of the following is correct about how economic growth is illustrated by the PPF? Question options: A) An inward shift of a straight line PPF illustrates modest economic growth. B) An inward shift of a bowed out PPF illustrates robust economic growth. C) An outward shift (rightward shift) of the entire PPF curve indicates economic growth has occurred. D) Movement down along a stationary PPF line indicates that massive economic growth has occurred.

An outward shift (rightward shift) of the entire PPF curve indicates economic growth has occurred.

Which of the following is NOT correct about a progressive tax? Question options: A) As income rises, the progressive tax rate falls. Therefore, lower income earners pay a higher tax RATE than higher income earners. B) The progressive income tax is used in the United States. C) In progressive taxation, the tax rate as a percentage of income increases as the income level increases. D) In progressive taxation, the tax rate rises as certain income levels are surpassed.

As income rises, the progressive tax rate falls. Therefore, lower income earners pay a higher tax RATE than higher income earners.

Why is labor most commonly used to measure productivity? Question options: A) Because labor only accounts for half of production costs. B) Because labor accounts for 98% of total production costs. C) Because labor typically accounts for about 70% of production costs. D) Because labor is the only production cost.

Because labor typically accounts for about 70% of production costs.

Why are Intermediate Goods not included in GDP? Question options: A) They are too big. B) Their value is insignificant. C) Because they are purchased by firms to produce final goods, counting them in GDP would undercount the full level of GDP. D) Because they are sold to producers to make final goods, counting them would result in overcounting.

Because they are sold to producers to make final goods, counting them would result in overcounting.

What resource is most responsible for increasing labor productivity? Question options: A) Labor B) Capital C) Payroll D) Natural Resources

Capital

What is Capital Deepening? Question options: A) Capital Deepening refers to an increase in the quantity of capital available to each worker. B) Capital Deepening is the investment in deeply analyzed financial instruments such as preferred stock and guaranteed bonds. C) Capital Deepening is when investors focus more than 75% of total investment funds in a deeply confirmed mutual, common or preferred stock. D) Capital Deepening refers to the practice of holding large quantities of low return but highly safe instruments such as Treasury Notes and Bills.a

Capital Deepening refers to an increase in the quantity of capital available to each worker.

What accounts for higher wage rates in the United States as compared to a very undeveloped country? Question options: A) Better worker attitudes. B) Worker willingness to work long and hard hours. C) Real Interest Rates. D) Capital Deepening.

Capital Deepening.

Which of the following is NOT included in Gross Domestic Product of the United States? Question options: A) New homes. B) Goods built with robots. C) Cars built in South Korea by Ford and General Motors. D) Cars built in United States by Toyota, Nissan and BMW.

Cars built in South Korea by Ford and General Motors.

Which of the following is NOT correct about how tariffs impact consumers and domestic producers? Question options: A) Consumers benefit because they are able to buy imports they value above domestic versions at a cheaper price. B) Consumers lose out from tariffs because they are forced to pay a higher price for imports or they must buy the domestic version of a good at a price higher than the original price of the import before it was taxed with a tariff. C) Domestic producers who manufacture goods similar to the import with a tariff benefit because consumers become more likely to buy their higher priced good after the tariff forces the price of the import to rise. D) Tariffs benefit domestic producers of products similar to imports burdened with a tariff because the import now becomes as expensive as the domestic good, so consumers become more likely to buy the domestic good they previously rejected.

Consumers benefit because they are able to buy imports they value above domestic versions at a cheaper price.

Which of the following is TRUE about Product Markets? Question options: A) Consumers buy final goods and services in Product Markets. While firms are the buyers in resource markets, consumers (households) are the buyers in product markets. B) Firms are the only buyers in Resource Markets and and Product Markets. C) Product Markets are where natural resources, labor and capital are purchased by businesses. D) Factors of production--such as land, labor and capital- are exchanged in Product Markets.

Consumers buy final goods and services in Product Markets. While firms are the buyers in resource markets, consumers (households) are the buyers in product markets.

Which component of Aggregate Expenditures comprises over 70% of Aggregate Expenditures? Question options: A) Consumption B) Investment C) Government D) Net Exports

Consumption

Which of the following is correct about Consumption? Question options: A) Consumption is the largest category in GDP, averaging more than two thirds of total GDP over the last decade. B) Consumption makes up 25% of GDP. C) Consumption has never exceeded 50% of GDP. D) Consumption is always less than Government because spending cannot exceed revenues.

Consumption is the largest category in GDP, averaging more than two thirds of total GDP over the last decade.

Which of the following is correct about the components of Aggregate Expenditures? Question options: A) Consumption refers to personal consumption of final goods by consumers, which typically makes up the largest component of Aggregate Exenditures. B) Investment only counts investment expenditures by firms and not personal investment spending by individuals. C) Government Spending only includes spending by the federal government. D) If Exports exceed Imports, Aggregate Expenditures will decrease.

Consumption refers to personal consumption of final goods by consumers, which typically makes up the largest component of Aggregate Exenditures.

Which of the following correctly lists the components of Aggregate Expenditure? Question options: A) Consumption, GDP, Aggregate Demand and Investment B) Consumption, Investment, Government and Net Exports C) Consumption, Investment, GDP and Output D) Consumption, Investment, Government and Exports

Consumption, Investment, Government and Net Exports

Which of the following is NOT true about the cooperative form of business organization? Question options: A) A cooperative or "co-op" is a group of people who pool their resources to buy and sell more efficiently than they could on their own. B) The government grants most co-ops tax exempt status. C) Cooperatives are always formed as Chapter J subsidiaries of preferred stock companies. D) Cooperatives are recognized by the government as legitimate business operations and most receive tax exempt status as a result.

Cooperatives are always formed as Chapter J subsidiaries of preferred stock companies.

This type of inflation occurs when Aggregate Supply contracts while Aggregate Demand holds steady, as shown by an AS curve that shifts to the left while the AD curve holds steady. Question options: A) Nominal Inflation B) Demand Pull C) Cost Push D) Hyperinflation

Cost Push

Which of the following does NOT correctly state the types of inflation? Question options: A) Demand pull inflation results when aggregate demand is increasing faster than supply, as shown by an aggregate demand curve shifting to the right while the aggregate supply curve is stationary. B) Cost push inflation occurs when Aggregate Supply contracts while Aggregate Demand holds steady, as shown by an AS curve that shifts to the left while the AD curve holds steady. C) Cost Push inflation is caused by increases in prices of major inputs used in production. D) Cost Push inflation is caused by increases in prices of most consumer goods.

Cost Push inflation is caused by increases in prices of most consumer goods.

Which are of the following does NOT contribute to understating the true level of unemployment? Question options: People working as few as 20 hours per week are not counted as unemployed. Not counting discouraged workers as unemployed. Counting part time workers as fully employed. Counting people over 16 who don't have a job but are actively seeking a job as employed but unemployable.

Counting people over 16 who don't have a job but are actively seeking a job as employed but unemployable.

Which of the following is NOT true about productivity? Question options: Labor is the most common resource to measure productivity because labor typically constitutes 70% of total production costs. Labor is the most common resource used to measure productivity because labor is more easily measured than other inputs. The resource most responsible for increasing labor productivity is capital. Countries with lower capital per worker achieve higher labor productivity rates.

Countries with lower capital per worker achieve higher labor productivity rates.

This type of inflation results when aggregate demand is increasing faster than supply, as shown by an aggregate demand curve shifting to the right while the aggregate supply curve is stationary. Question options: A) Demand Push B) Supply Push Pull C) Demand Pull D) Hyperinflation

Demand Pull

Income remaining after taxes are excluded and transfer payments are included. Question options: A) National Income B) Disposable Income C) Adjusted Gross Income D) Unadjusted Gross Domestic Income

Disposable Income

Which of the following is correct about disposable income? Question options: A) Disposable income is calculated by dividing GDP by Per Capita Income B) Disposable Income is just income remaining after taxes are excluded and transfer payments are included. C) Disposable Income is income left over after taxes, expenses and debt is added to gross domestic income. D) Disposable Income is average consumer income that is unspent at the end of each standard payment period.

Disposable Income is just income remaining after taxes are excluded and transfer payments are included.

In which direction does the supply curve shift when there is an increase in supply? Question options: A) North by Northwest B) Downward to the right. C) Upward to the left. D) The supply curve does not shift when supply increases.

Downward to the right.

What is occurring when output, prices, income and production are falling? Question options: A) Economic Expansion B) Peak of Business Cycle C) Economic Contraction D) Economic Growth

Economic Contraction

Which of the following is correct about the term "capital" as defined by economists? Question options: A) As used by economists, the term "capital" refers to gold, stocks, bonds and other highly liquid assets. B) Economists define capital as physical assets (factories, machinery, etc.) used to produce other physical assets or consumer goods. C) Capital is hard money assets in the form of certified bonds, corporate certificates of deposit and preferred stock. D) Capital includes retained earnings, corporate debt and certified receipts.

Economists define capital as physical assets (factories, machinery, etc.) used to produce other physical assets or consumer goods.

Which of the following correctly reflects the function of a resource market? Question options: A) Consumers purchase final goods for personal consumption in resource markets. B) Firms buy labor, capital and natural resources in Resource Markets. C) Firms receive payments for goods and services from consumers in resource markets. D) Consumers receive goods and services in resource markets that are used for personal consumption.

Firms buy labor, capital and natural resources in Resource Markets.

Which of the following is NOT true about the various types of unemployment? Question options: Frictional unemployment occurs as job seekers need time to explore the market. It does not occur long and is actually a positive indicator about the health of the job market. Structural unemployment results from changes in tastes, technology and taxes. The presence of structural unemployment is difficult for those affected but is actually a sign of a dynamic, healthy economy. Cyclical unemployment results from the unavoidable ups and downs of the business cycle. The unemployment experienced now (late 2008 to Summer of 2009) is mostly cyclical unemployment. For economists, the term "full employment" means that all able bodied adults are employed.

For economists, the term "full employment" means that all able bodied adults are employed.

This type of unemployment occurs as job seekers need time to explore the market. It occurs when the economy is growing and people are more likely to switch to a job that better fits their skills, rather than clinging desperately to their existing job, which may not utilize their full skill set. Question options: A) Structural Dynamic B) Occasional C) Seasonal D) Frictional

Frictional

Which of the following is NOT true about Frictional Unemployment. Question options: A) Frictional Unemployment is actually a positive indicator about the health of the job market because it results from job seekers who are so confident in their employment prospects that they are willing to take extra time to explore job opportunities. B) Frictional Unemployment refers to the difference between monthly hiring quotas and the number of qualified job applicants. C) Frictional unemployment occurs as job seekers need time to explore the market. It does not occur long and is actually a positive indicator about the health of the job market. D) As a positive indicator of a robust job market, Frictional Unemployment is a sign that worker job confidence is increasing.

Frictional Unemployment refers to the difference between monthly hiring quotas and the number of qualified job applicants.

Which of the following is NOT true? Question options: A) Frictional unemployment occurs because job seekers and employers need time to connect. B) Structural unemployment occurs because many workers lack the skills demanded by employers or the workers simply do not live where the jobs are located. C) Frictional unemployment tends to be long term and constitutes the most difficult type of unemployment to resolve. D) Cyclical unemployment is associated with economic contractions and recessions.

Frictional unemployment tends to be long term and constitutes the most difficult type of unemployment to resolve.

Which of the following is NOT true about the term "full employment", as used by economists? Question options: A) Full employment, as used by economists, just means there is no cyclical unemployment, even if some structural, seasonal or frictional unemployment exists. B) Full employment, as used by economists means zero unemployment. Everyone over 16 in the labor force is working at a job. C) The term "full employment", as used by economists is not a zero unemployment rate. It just means that no cyclical unemployment remains, although some structural, seasonal or frictional unemployment may linger. D) As used by economists, full unemployment, as used by economists, can be any level of unemployment over zero caused by structural, seasonal or frictional unemployment (but not cyclical unemployment).

Full employment, as used by economists means zero unemployment. Everyone over 16 in the labor force is working at a job.

Which of the following is NOT true about the mixed economic system in the United States? Question options: A) Government spending accounts for over 90% of the total economy. B) Government regulates the private sector in many ways. C) Government plays a limited but very influential role in the economy. D) Federal agencies regulate safety in the workplace, safety of food and medicines, water standards, and ensure maximum competitiveness in the overall economy.

Government spending accounts for over 90% of the total economy.

The market value of all FINAL goods and services produced within the borders of a country during a particular time period Question options: A) Refined Domestic Output B) Gross Average Output C) Gross Domestic Product D) National Output Production

Gross Domestic Product

Which of the following is NOT true about factors that contribute to productivity? Question options: A) Technological changes improve the quality of capital, which improves productivity. B) Tax cuts typically increase the quantity of capital, which improves productivity. C) More and better capital per worker increases productivity, output, and living standards. D) Higher productivity results in a leftward shift of the PPF and thus reduced long run economic capital inversion growth.

Higher productivity results in a leftward shift of the PPF and thus reduced long run economic capital inversion growth.

Which of the following is correct about the effect of imports on Aggregate Demand? Question options: A) If Consumption, Investment and Government hold steady from one year to the next and Imports are greater than Exports, Aggregate Demand will fall. B) If Consumption, Investment and Government hold steady from one year to the next and Imports are less than Exports, Aggregate Demand will fall. C) Imports are not used to calculate Aggregate Demand. D) If the value of Imports exceeds the value of Exports, Consumption must fall.

If Consumption, Investment and Government hold steady from one year to the next and Imports are greater than Exports, Aggregate Demand will fall.

Which of the following is NOT true about factors that change the equilibrium price? Question options: A) If supply is constant and demand increases, the equilibrium price will increase. B) If demand is constant and the supply decreases, the equilibrium price will increase. C) If supply is constant and consumer income increases, the equilibrium price will increase. D) If both supply and demand increases, it is certain that the equilibrium price will increase.

If both supply and demand increases, it is certain that the equilibrium price will increase.

Which of the following is NOT correct about GDP per capita? Question options: A) If employment and output grow faster than the population, then GDP Per Capita will increase. B) GDP per capita is calculated by dividing GDP by the population. C) If the population grows faster than output, GDP per capita will fall. D) If population grows faster than output and employment, GDP per capita will increase.

If population grows faster than output and employment, GDP per capita will increase.

What causes the quantity supplied of a good to rise? Question options: A) Increase in the market price of the good. B) Increase in input costs for that good. C) Decrease in input costs for that good. D) Increase in consumer preference for that good.

Increase in the market price of the good.

What is the effect of greater spending on government and private sector Research and Development on living standards? Question options: A) No significant effect. B) Increases in research and development drive improvements in technology which drive improvements in the quality of capital which increases living standards. C) R&D spending lowers productivity which lowers living standards. D) R&D spending reduces the value of technology, which ultimately results in reduced standards of living.

Increases in research and development drive improvements in technology which drive improvements in the quality of capital which increases living standards.

Which of the following is NOT correct about the effects of Research and Development? Question options: A) Increases in research and development drive improvements in technology which drive improvements in the quality of capital which increases living standards. B) Increases in research and development drive improvements in technology which drive improvements in the quality of capital, which results in higher productivity, higher real GDP per capita and higher living standards. C) Increases in research and development drive improvements in technology which increase the quality of capital, which is one of the major sources of improvements in productivity. D) Increases in research and development increase corporate spending which results in reducing return on investment.

Increases in research and development increase corporate spending which results in reducing return on investment.

This term refers to government picking and choosing the emerging industries of the future and nurturing them with special taxes and subsidies, to give these specially selected industries an advantage over similar foreign corporations. Question options: A) Whole Term Policy B) Industrial Policy C) Government policy D) Full Term Policy

Industrial Policy

Which of the following correctly defines and describes Industrial Policy? Question options: A) Industrial Policy is the primary production methodology stated in official documents supporting the initial public offering (IPO) of a newly formed enterprise. B) Industrial Policy is the use of government subsidized loans to finance a major improvement in technology or a major expansion of productive capacity by a major automotive company. C) Industrial policy refers to the use of government tools to pick the emerging industries of the future and nurture them with special taxes and subsidies, so as to give these specially selected industries an advantage over similar foreign corporations. D) Industrial Policy is the use of government subsidized loans, government grants, or other governmental assistance to incorporate a previously single owner standard household appliance maker through a well publicized initial public offering (IPO).

Industrial policy refers to the use of government tools to pick the emerging industries of the future and nurture them with special taxes and subsidies, so as to give these specially selected industries an advantage over similar foreign corporations.

Which of the following is NOT an accurate definition? Question options: An expansion is when the economy's output increases. A depression is a sharp reduction in output that lasts more than a year with unemployment higher than most recessions. The business cycle is the normal up and down of economic output. Inflation occurs when the price of one or two key consumer goods increases.

Inflation occurs when the price of one or two key consumer goods increases.

Which of the following is NOT included in GDP? Question options: A) Planes, trains and automobiles. B) Real estate. C) Intermediate goods sold to producers as input into making a final good. D) Refined goods.

Intermediate goods sold to producers as input into making a final good.

What effect does an increase in total output of both goods have on the PPF? Question options: A) It shifts the PPF downward. B) It contracts the PPF. C) It shifts the PPF outward. D) It has no effect on the position of the PPF,

It shifts the PPF outward.

Which of the following people has the comparative advantage in making pizza? Question options: A) Joe has to give up making one rocking horse to make one pizza. B) June gives up making one half of a rocking horse to make one pizza. C) Jimbo can make one pizza or one fourth of a hobby horse in the same amount of time. D) Jasmine can make more pizzas and hobby horses than anyone.

Jimbo can make one pizza or one fourth of a hobby horse in the same amount of time.

Which of the following is NOT included in GDP? Question options: A) Lumber sold to furniture maker. B) Lumber sold to homeowner to make a dog house. C) Nails sold to individual to build a playhouse. D) Final goods sold to consumers.

Lumber sold to furniture maker.

John is a high school dropout with amazing self taught computer skills and a three year old thriving business setting up and maintaining computer systems. Joan just graduated from dental college but just decided to learn how to set up computer systems. Judy is a doctor who worked her way through college and medical school setting up and maintaining computer systems. Based on the concept of opportunity cost, who should set up and maintain the computer system at the newly formed large scale private medical practice Judy just joined? Question options: A) Judy, because she has 8 years of experience setting up computer systems and John only has 3 years of experience. B) John, because he has the lower opportunity cost of setting up computer systems. Although Judy has more experience, she would have to sacrifice $500 per hour of medical income to save her firm just $100 per hour of computer set up costs. Likewise, Joan is giving up $300 per hour of dental income for each hour she earns $50 for providing computer set up services. C) Joan because she is new and has lots of time to spend setting up the new system. D) None of the three listed has a lower opportunity cost of setting up new computer systems.

John, because he has the lower opportunity cost of setting up computer systems. Although Judy has more experience, she would have to sacrifice $500 per hour of medical income to save her firm just $100 per hour of computer set up costs. Likewise, Joan is giving up $300 per hour of dental income for each hour she earns $50 for providing computer set up services.

Who should specialize in making pizza? Question options: A) Joe can make one pizza in the time it takes him to make one woven basket. B) Joan can make two pizzas in the time it takes her to make one woven basket. C) June can make three pizzas in the time it takes her to make on woven basket. D) Jumba can make the most pizzas and woven baskets of anyone.

June can make three pizzas in the time it takes her to make on woven basket.

Which of the following is true about labor as a factor of production? Question options: A) Labor refers to human effort. B) Labor includes physical effort but not mental effort. C) If labor is scarce, the goods produced by labor will never be scarce. D) The cost of labor does not reflect the value of time.

Labor refers to human effort.

Which of the productive resources involves the surface of the earth and the valuable resources located just on the surface and below the surface? Question options: A) Labor B) Land (Natural Resources) C) Capital Formation D) Natural Capital

Land (Natural Resources)

Which of the following lists the four major categories of economic resources used in the production of consumer goods? Question options: A) Scarcity, shortages, surpluses and extra output. B) Goods, services, inputs, outputs. C) Land, labor, capital and entrepreneurial skill. D) Factories, stores, outlets and malls.

Land, labor, capital and entrepreneurial skill.

Which of the following is NOT true about leading economic indicators. Question options: Leading economic indicators predict near future economic conditions. A reduction in business sales, orders for machinery, computer sales, and stock market prices usually predicts a near term recession. Leading economic indicators always predict when a recession will begin, within 30 days or better. Leading indicators include changes in business investment and changes in purchases of big ticket items, such as cars, appliances and houses.

Leading economic indicators always predict when a recession will begin, within 30 days or better.

Which is the correct definition of Macroeconomics? Question options: A) Macroeconomics looks at the entire economy, not at the multitude of individual markets for the numerous individual goods and services. It looks at high level economic measures such as the level of employment, price levels and Gross Domestic Product. B) Macroeconomics focuses entirely on choices made by individual consumers and firms. C) The primary focus of Macroeconomics is limited to profit maximizing decisions by firms operating under conditions of perfect competition. D) Macroeconomics focuses only on output and profit decision-making by firms in competitive and non-competitive markets.

Macroeconomics looks at the entire economy, not at the multitude of individual markets for the numerous individual goods and services. It looks at high level economic measures such as the level of employment, price levels and Gross Domestic Product.

Which of the following is NOT true about marginal analysis? Question options: A) Marginal analysis focuses on the change brought about by doing one more thing or buying one more good. B) If the marginal benefit is greater than the marginal cost, then one should take the action or buy the good. C) As used by economists, marginal analysis refers to comparing the expected value and the expected cost of a decision under consideration. D) Marginal analysis refers to the evaluation of relatively inferior goods and services. One might refer to such a good or service as having "marginal quality" or "marginal value."

Marginal analysis refers to the evaluation of relatively inferior goods and services. One might refer to such a good or service as having "marginal quality" or "marginal value."

Which of the following is NOT true about Microeconomics and Macroeconomics? Question options: A) Microeconomics studies the phenomenon of individual choice and how markets coordinate those choices. B) Microeconomics focuses on how prices and quantities sold are determined in defined markets for individual goods. C) Microeconomics studies the performance of the economy as a whole. D) Macroeconomics looks at the entire economy, not at the multitude of individual markets for the numerous individual goods and services.

Microeconomics studies the performance of the economy as a whole.

Which of the following provides the correct definition of Microeconomics? Question options: A) Microeconomics provides analysis of high level economic measures such as employment, inflation and Grossed Out Domestic Producers. B) Microeconomics studies the phenomenon of individual choice and how markets coordinate those choices. Microeconomics focuses on how prices and quantities sold are determined in defined markets for individual goods. C) Microeconomics studies the overall output of the economy and its general levels of employment and prices. D) Microeconomics looks at large macro level measures of economic outcomes.

Microeconomics studies the phenomenon of individual choice and how markets coordinate those choices. Microeconomics focuses on how prices and quantities sold are determined in defined markets for individual goods.

Which of the following strategies is most likely to boost productivity in an automobile plant? Question options: A) More advanced robots, equipment, and tools. B) A 10% pay raise. C) Greater enforcement of time-off policies. D) More visits by the CEO.

More advanced robots, equipment, and tools.

Which of the following is NOT true about unemployment? Question options: A) The unemployment rate is the percent of the labor force that is not working but is actively seeking work. B) Discouraged workers (those without a job who have given up looking for one) are not included in the labor force and are therefore not reflected in the unemployment rate. C) Part time workers working less than 20 hours per week are counted as unemployed by the Bureau of Labor Statistics. D) Not counting discouraged workers and part time workers as employed tends to understate the true level of unemployment.

Part time workers working less than 20 hours per week are counted as unemployed by the Bureau of Labor Statistics.

Which of the following will cause the Equilibrium Price to rise? Question options: A) No change in supply but an increase in demand. B) No change in demand but an increase in supply. C) Increase in demand but much larger increase in supply. D) No change in demand or supply.

No change in supply but an increase in demand.

Which of the following is NOT correct about the Real Interest Rate? Question options: A) On accordance with federal law, the Real Interest Rate is the one stated at the very bottom of the Declaration Page of all standard lending contracts. B) The Real Interest Rate is just the nominal or stated interest rate adjusted for inflation. C) The Real Interest Rate is calculated by subtracting the inflation rate from the nominal interest rate. D) If the Nominal Interest Rate is 10% and the Inflation Rate is 4%, the Real Interest Rate is 6%.

On accordance with federal law, the Real Interest Rate is the one stated at the very bottom of the Declaration Page of all standard lending contracts.

Which of the following is NOT true about Intermediate Goods? Question options: A) Only half of the value of total Intermediate Goods are included in GDP because most are not resold to consumers. B) Intermediate Goods are those that are purchased by firms as inputs into final goods that are sold to consumers for ultimate consumption. C) Intermediate Goods are not included in GDP because that would result in double counting because their value is reflected in the price of final goods sold to consumers. D) Intermediate Goods are used by firms in the production of final goods that are marketed to consumers.

Only half of the value of total Intermediate Goods are included in GDP because most are not resold to consumers.

Which of the following is correct about Opportunity Cost? Question options: A) The Opportunity Cost of a purchase or action is always the same for everyone. B) The Opportunity Cost of a purchase or action is always the same for everyone sharing a given level of income. C) Opportunity Cost is highly subjective and varies according to the personal perspective of each individual. D) The Opportunity Cost of a purchase or action is determined by the average income of a person or the total amount of wealth held by that person.

Opportunity Cost is highly subjective and varies according to the personal perspective of each individual.

Which of the following is correct about the partnership form of business organization? Question options: A) Partnerships are the least common business form. B) Partnerships are the MOST common business form. C) Partnerships generate over 90% of all proprietary revenue. D) Partnerships are formed as subsidiaries of preferred stock companies.

Partnerships are the least common business form.

As used by economists, which of the following is the correct definition of capital? Question options: A) Checking, Savings and Money Market accounts used by firms to expand their businesses. B) Gold, stocks, bonds and other highly liquid financial assets. C) Hard money assets in the form of certified bonds, corporate certificates of deposit and preferred stock. D) Physical assets (factories, machinery, tools etc.) used to produce other physical assets or consumer goods.

Physical assets (factories, machinery, tools etc.) used to produce other physical assets or consumer goods.

Which of the following is NOT true of the production possibilities frontier (PPF)? Which of the followig is NOT true of the production possibilities frontier (PPF)? Question options: To shift the PPF outwards, it is necessary to increase the amount of resources or improve the state of technology (or both).Points between the PPF curve and the X and Y axes are not attainable. Points outside the PPF curve are not attainable with the given level of resources and the current state of technology. Points inside the curve are attainable but not efficient. The slope of the PPF curve shows that the opportunity cost of making one product (in terms of the other product) increases as more of that product is made.

Points between the PPF curve and the X and Y axes are not attainable

Which of the following is true about points inside and outside of the PPF? Question options: A) Points inside the PPF (between the curve and the X&Y axes), are the most efficient points of production. B) Points outside the PPF are the most efficient of the attainable points of output. C) Points outside the PPF are not attainable with the given level of resources the given state of technology being used. D) Points inside the PPF are attainable only if resources are increased or technology is improved or both).

Points outside the PPF are not attainable with the given level of resources the given state of technology being used.

Which of the following is correct about a Production Possibilities Frontier? Question options: A) Points between the PPF and the X and Y axes are not attainable without more resources or better technology. B) Points outside the PPF curve are not attainable with the given level of resources and the current state of technology. Points inside the curve are attainable but not efficient. To shift the PPF outwards, increase total resources or improve technology (or both). C) Points outside the PPF line are not attainable in the future, regardless of changes in resources or technology. D) A change in technology alone cannot push the PPF outwards.

Points outside the PPF curve are not attainable with the given level of resources and the current state of technology. Points inside the curve are attainable but not efficient. To shift the PPF outwards, increase total resources or improve technology (or both).

Which of the following is NOT true about positive economic statements? Question options: A) Positive economic statements are ones that are true. B) A good example of a positive economic statement is this: An increase in the price of a good or service causes a decrease in the amount purchased of that good or service. C) A positive economic statement is one that can proved true or proven false by testing it with reference to facts. D) A positive economic statement can be false if it is proven by facts to be false. It need not be true to be a positive economic statement--it only needs to be subject to being proved or disproved by reference to facts.

Positive economic statements are ones that are true.

What measure is determined by the intersection of Aggregate Demand and Aggregate Supply? Question options: A) GDP B) NPP C) Price Level D) National Output

Price Level

Which of the following is NOT correct about price ceilings? Question options: A) While a price ceiling benefits the lucky folks able to find an available instance of the protected good, it creates a substantial number of losers unable to find the good at the artificially low government-set price. B) A price ceiling reduces the quantity supplied while increasing the quantity demanded. Therefore, more people will want to buy the good while fewer units will be available, which results in a shortage. C) Price ceilings are set by government on behalf of consumers. The irony is that many consumers are harmed because they cannot get the good because a shortage results. D) Price ceilings benefit all consumers because everyone can get the good at the lower government mandated price.

Price ceilings benefit all consumers because everyone can get the good at the lower government mandated price.

Which of the following is NOT true about price floors? Question options: A)Price floors result in shortages, which hurts producers. B)Price floors increase the quantity supplied while decreasing the quantity demanded, which results in a surplus. C)Price floors are mandated by government on behalf of producers. D)The minimum wage is a price floor but in this case the "producers" are workers who produce labor.

Price floors result in shortages, which hurts producers.

Which of the following causes a shortage? Question options: A) Price is held below the equilibrium price resulting in quantity demanded exceeding quantity supplied. B) Government forces the price above the equilibrium level making quantity demanded exceed the quantity supplied. C) Natural economic forces cause the market price to remain high above the equilibrium price which causes quantity supplied to remain well below quantity demanded. D) Quantity demanded falls well below quantity supplied from government imposed controls.

Price is held below the equilibrium price resulting in quantity demanded exceeding quantity supplied.

Which of the following is the correct definition and description of Private Goods? Question options: A) Private goods are those that the consumption by one person does not preclude the consumption by many other people, regardless of ability to pay. B) Private goods are those that non-payers cannot be excluded from using. C) Private goods are exclusive because sellers have the legal right to exclude those who refuse to pay. Private goods are said to be rival in consumption because the amount consumed by one party is unavailable to another for consumption. D) Private goods are those typically provided by government because most people will not pay for them.

Private goods are exclusive because sellers have the legal right to exclude those who refuse to pay. Private goods are said to be rival in consumption because the amount consumed by one party is unavailable to another for consumption.

Which of the following is NOT true about Product Markets and Resource Markets? Question options: A) Product Markets involve the sale and purchase of factors of production used to make goods and services. B) Firms buy labor, capital and natural resources in Resource Markets. C) Consumers buy goods and services in Product Markets. D) While firms are the buyers in resource markets, consumers (households) are the buyers in product markets.

Product Markets involve the sale and purchase of factors of production used to make goods and services.

Which of the following correctly defines the concept of productivity? Question options: A) Productivity is how hard an average worker works in an 8 hour shift. B) Productivity is measured by the percent of work time devoted to productive work. C) Productivity shows output per unit of input, such as output per worker. D) Productivity is measured by the quality of output produced in a given period of time.

Productivity shows output per unit of input, such as output per worker.

Which type of good is most likely to be provided by the government because it is valued by society but very unlikely to ever be provided by a private sector firm? Question options: A) Public Good. B) Private Good. C) Publicly Held Private Good. D) Goods produced by private firms.

Public Good.

Which of the following is NOT correct about Public Goods? Question options: A) Public Goods are those whose usage by one does not preclude usage by another. B) Public Goods are those for which exclusion to non-payers is very difficult and often impossible. C) Public Goods are provided by publicly held corporations with massive subsidies from the government. D) Public goods are goods valued by a society but not likely to be provided by private firms.

Public Goods are provided by publicly held corporations with massive subsidies from the government.

Which of the following is NOT true about private and public goods? Question options: A) Private goods are exclusive because sellers have the legal right to exclude those who refuse to pay. B) Private goods are said to be rival in consumption because the amount consumed by one party is unavailable to another for consumption. C) Public goods are both nonrival and nonexclusive. Consumption by one does not preclude consumption by another. Also, nonpayers benefit as much as those who pay. D) Public goods are those whose consumption by one party precludes consumption by another. Also, public goods are those whose consumption can be denied to nonpayers.

Public goods are those whose consumption by one party precludes consumption by another. Also, public goods are those whose consumption can be denied to nonpayers.

Picture 50 Indian workers with shovels preparing the roadbed for a new road. Now picture 50 American road workers driving loaders, graders, rollers and dump trucks. What accounts for the difference in labor productivity and wage rates between these two sets of road building workers? Question options: A) Quality and extend of productive capital. B) Harder working Americans. C) More dedicated American workers who show up for work everyday and work hard for 10-12 hours a day. D) Better attitudes.

Quality and extend of productive capital.

Which of the following is NOT true about a normative economic statement? Question options: A) This is an accurate example of a normative economic statement: Raising the price of labor will cause a decrease in the amount of labor used by firms. B) A normative economic statement cannot be proved or disproved by using objective facts. C) A normative economic statement reflects an opinion which cannot be confirmed or denied by reference to facts. D) Normative economic statements refer to what should be rather than simply summarizing what currently exists.

Raising the price of labor will cause a decrease in the amount of labor used by firms.

This interest rate is calculated by subtracting the inflation rate from the nominal interest rate. It is is just the nominal or stated interest rate adjusted for inflation. Question options: A) Contract Interest Rate B) Federal Interest Rate C) Real Interest Rate D) Full Employment Interest Rate

Real Interest Rate

In which type market do firms buy labor, capital and natural resources? Question options: A) Farmers Market B) Natural Market C) Resource Market D) Market for Goods and Services

Resource Market

Which of the following is true about scarcity? Question options: A) Only items that continually sells out are called scarce. B) Scarcity refers to the long term situation whereby the amount desired exceeds the amount freely available. Therefore, any item that can command any price in an open market is technically scarce. C) A scarce item is one that is hard to find during a brief time period in most retail outlets. D) Scarcity refers to a temporary shortage of any item because the current price is too low.

Scarcity refers to the long term situation whereby the amount desired exceeds the amount freely available. Therefore, any item that can command any price in an open market is technically scarce.

Which concept reflects the benefit gained from having people do a specific task in a production process rather than every single step in that process? Question options: A) Opportunity marginal analysis. B) Specialization C) Generalization D) Marginal cost.

Specialization

Which of the following is NOT true about specialization? Question options: A) Specialization increases productivity by allowing a group of workers to produce more than each could do working individually on their own, even after totally up the work that was done individually. B) Specialization results in greater output, higher productivity and greater efficiency of production. C) Specialization degrades the skill set of workers forced to work under a specialized system of production. D) Specialization allows a region or country to achieve higher standards of living by boosting the overall productivity of workers.

Specialization degrades the skill set of workers forced to work under a specialized system of production.

Which of the following is correct about stagflation? Question options: A) Stagflation is beneficial to producees in that it results in steadily falling price levels. B) Stagflation occurs when aggregate supply contracts, resulting in higher inflation and lower output. Decreases in agricultural output and oil supplies contributed to stagflation in the 1970's. C) Although prices rise a little under stagflation, it benefits producers with steadily rising output. D) Although output falls under stagflation, the fall in prices is a major benefit to consumers.

Stagflation occurs when aggregate supply contracts, resulting in higher inflation and lower output. Decreases in agricultural output and oil supplies contributed to stagflation in the 1970's.

This type of unemployment results from changes in tastes, technology and taxes. Although it is difficult for those affected but is actually a sign of a dynamic, healthy economy. Question options: A) Fractional B) Divisional C) Seasonal D) Structural

Structural

Which curve has a positive slope where the quantity increases as the price increases? Question options: A) Supply Curve B) Demand Curve. C) Indifference Curve. D) Bell Curve.

Supply Curve

Which of the following is correct about Supply Side Economics? Question options: A) Supply side economists believe that cuts in tax rates increase the incentives to work, save and invest; all of which will boost aggregate supply, which lowers price levels and increases output and employment. B) Supply side economists believe that increases in tax rates increase the incentives to work, save and invest. C) Supply side economists believe that cuts in tax rates will boost aggregate supply, raise price levels and decrease output and employment. D) Supply side economists believe that cuts in tax rates decrease the incentives to work, save and invest.

Supply side economists believe that cuts in tax rates increase the incentives to work, save and invest; all of which will boost aggregate supply, which lowers price levels and increases output and employment.

Which of the following is NOT true about the impact of tariffs and quotas? Question options: A) Tariffs and quotas allow consumers to save money. B) Tariffs and quotas raise the price of the import upon which they are imposed and allow domestic American producers to raise their price to match the final consumer price of the import. C) Tariffs and quotas are taxes on imports imposed to force the final consumer price of those imports higher. D) Tariffs and quotas raise the price of the import upon which they are imposed and allow domestic American producers to raise their price to match the final consumer price of the import.

Tariffs and quotas allow consumers to save money.

Under what conditions can labor productivity increase when the quantity of capital available to each worker is constant? Question options: A) Technological advances allow labor productivity to increase even when the amount of capital goods available to each worker remains constant. B) Improvements in how hard workers work will massively improve labor productivity even when the amount and quality of capital goods are fixed. C) Improvements in worker attitude and devotion will greatly increase labor productivity even when the amount and quality of capital is unchanging. D) Increases in nominal wages rates that are no greater than the inflation rate will massively increase average labor productivity even when the quantity/quality ratio is held constant.

Technological advances allow labor productivity to increase even when the amount of capital goods available to each worker remains constant.

Which of the following is NOT true about the Consumer Price Index (CPI)? Question options: The Consumer Price Index measures changes over time in the price of a collection of commonly purchased items The CPI is imperfect because it does not capture quality improvements that may justify higher product prices. Therefore, it can overstate the true level of inflation. Because the CPI holds the market basket constant over time, it cannot reflect substitutions in purchasing preferences. Therefore, it can overstate the true level of inflation. The CPI is an alternative measure of GDP based upon valuing all current output at prices expected to exist in the following year.

The CPI is an alternative measure of GDP based upon valuing all current output at prices expected to exist in the following year.

Which of the following is NOT a shortcoming of the CPI? Question options: A) The CPI tends to overstate the true level of inflation by not taking into account that households shift away from goods that experience relatively greater price increases toward goods with smaller or no price increases. B) The CPI tends to overstate the true level of inflation by not taking into account that quality improvements in goods actually lower the long term cost of buying such goods. C) The CPI tends to overstate the true level of inflation by not including new goods that may be quite popular at the onset of their introduction. D) The CPI likely understates inflation because it does not count part time workers and discouraged employers.

The CPI likely understates inflation because it does not count part time workers and discouraged employers.

Which of the following is the correct definition of a business cycle? Question options: A) The business cycle is the final value of goods. B) The business cycle is the natural ups and downs of total production in an economy. The lowest part of the cycle is called the trough and the highest part is called the peak. C) The business cycle reflects the nominal inflation rate expressed as output per dollar denominated. D) The business cycle is the employment rate divided by the unemployment rate over a period of one year.

The business cycle is the natural ups and downs of total production in an economy. The lowest part of the cycle is called the trough and the highest part is called the peak.

What are some basic inaccuracies of using the CPI to measure inflation? Question options: A) There are no weaknesses in using the CPI. B) The CPI tends to undercount the true level of inflation by taking into account that quality improvements in goods actually raise the long term cost of buying such goods. C) The CPI tends to understate the true level of inflation by taking into account that households tend to shift away from goods with greater price increases toward goods with smaller or no price increases. D) The CPI tends to overstate the true level of inflation by not taking into account that households shift away from goods that experience relatively greater price increases toward goods with smaller or no price increases. The CPI tends to overstate the true level of inflation by not taking into account that quality improvements in goods actually lower the long term cost of buying such goods.

The CPI tends to overstate the true level of inflation by not taking into account that households shift away from goods that experience relatively greater price increases toward goods with smaller or no price increases. The CPI tends to overstate the true level of inflation by not taking into account that quality improvements in goods actually lower the long term cost of buying such goods.

Which of the following provides the correct definition and description of the Labor Force? Question options: A) Parents who choose to stay home to care for young children and is not actively seeking employment are always included in the Labor Force. B) People who have given up looking for a job are included in the Labor Force. C) The Labor Force includes people over 16 who are not actively seeking a job, such as retirees, stay at home parents and those who have returned to school. D) The Labor Force does NOT include adults who are not actively seeking a job, such as retirees and those who have returned to school. A parent who chooses to stay home to care for young children and is not actively seeking employment is NOT included in the Labor Force.

The Labor Force does NOT include adults who are not actively seeking a job, such as retirees and those who have returned to school. A parent who chooses to stay home to care for young children and is not actively seeking employment is NOT included in the Labor Force.

Which of the following is NOT correct about the Labor Force. Question options: A) The Labor Force includes every adult that can read and should be working. B) The Labor Force refers to adults who are either working or seeking work. C) The Labor Force does NOT include adults who are not actively seeking a job, such as retirees and those who have returned to school. D) A parent who chooses to stay home to care for young children and is not actively seeking employment is NOT included in the Labor Force.

The Labor Force includes every adult that can read and should be working.

Which of the following is true about comparative advantage? Question options: A) If Country A can produce more tin than Country B, then County A is said to have a Comparative Advantage over Country B in tin. B) The Law of Comparative Advantage indicates that the person or country with the lower opportunity cost of making a good should specialize in making that good. If people or countries specialize according to comparative advantage and then engage in trade,both will be better off. C) If Georgia can grow more peaches than South Carolina, then Georgia is said to have a comparatively advantageous position of advantage over that state. D) Comparative Advantage refers to the country that can produce the most goods in the shortest period of time.

The Law of Comparative Advantage indicates that the person or country with the lower opportunity cost of making a good should specialize in making that good. If people or countries specialize according to comparative advantage and then engage in trade,both will be better off.

What is the effect on the PPF from an increase in natural resources, labor and capital? Question options: A) The slope of the PPF will become flatter. B) The slope of the PPF will become more vertical. C) The PPF line will shift outwards. D) The PPF line will shift inward.

The PPF line will shift outwards.

Which of the following is the BEST example of Industrial Policy? Question options: A) A Japanese company secures multi-national loans to finance a major expansion of car factories in multiple countries. B) An American Firm receives government subsidized low interest loans to finance a doubling of the number of its overseas railcar factories. C) The U.S. Congress passes legislation to provide extensive government loan guarantees to newly incorporated firms producing innovative products in newly emerging industries officially designated as key to U.S. economic growth and national security. D) A multinational consortium secures massive financing from the World Bank to build numerous factories in three less developed countries.

The U.S. Congress passes legislation to provide extensive government loan guarantees to newly incorporated firms producing innovative products in newly emerging industries officially designated as key to U.S. economic growth and national security.

Which of the following is correct about the Unemployment Rate? Question options: A) The Unemployment Rate is the percent of adults who are able to work but are not working. B) The Unemployment Rate is calculated by dividing those unemployed but seeking work by the total labor force. The labor force is defined as those either working or actively seeking work. C) The Unemployment Rate is the percent of adults who can read and write but do not have a job. D) The Unemployment Rate is calculated by dividing the number of people employed by the total population of adults over 16.

The Unemployment Rate is calculated by dividing those unemployed but seeking work by the total labor force. The labor force is defined as those either working or actively seeking work.

Which of the following correctly defines and describes a federal deficit? Question options: A) Total amount of debt owed by the United States. B) Federal debt expressed in terms of short and long term debt. C) The amount of government spending that exceeds government revenue in one fiscal year. D) Treasury bonds and notes owed to foreign concerns.

The amount of government spending that exceeds government revenue in one fiscal year.

Which of the following is NOT true about Gross Domestic Product (GDP)? Question options: GDP is the market value of all FINAL goods and services produced within the borders of a country during a particular time period. GDP measures up the value of a country's production of goods and services. Real GDP is GDP after removing the effects of price changes. The best measure of a country's standard of living is average median income per medianiated household.

The best measure of a country's standard of living is average median income per medianiated household.

Which of the following provides the correct definition of "opportunity cost?" Question options: A) The price of the good expressed as the full cost of purchase. B) All of the other things one could have bought with the money spent on a good or service. C) All of the other things one could have done with the hour spent on studying for an Economics exam. D) The best single alternative given up in order to buy a good or to spend an hour doing a particular activity.

The best single alternative given up in order to buy a good or to spend an hour doing a particular activity.

Which of the following is NOT true about exclusions to GDP? Question options: Intermediate goods are not included in GDP Unreported underground market transactions are not included because they are not recorded in government accounting mechanisms. Nonreported, under the table, cash payments made to an unlicensed home repairman are not counted in official GDP calculations. The cash values of long term financial instruments sold through state chartered multi-service banks with highly varieted investment instruments secured by high yield treasuries are not included in GDP

The cash values of long term financial instruments sold through state chartered multi-service banks with highly varieted investment instruments secured by high yield treasuries are not included in GDP

Which of the following is the correct method to determine comparative advantage? Question options: A) The person with the lowest production possibility frontier has the comparative advantage. B) The country whose PPF curve bowest out the greatest has the comparative advantage in those two goods. C) The country with the lower opportunity cost of making steel is said to have the comparative advantage in making steel. D) If Country A can make more steel in one week than Country B then it must have the comparative advantage in making steel over Country B.

The country with the lower opportunity cost of making steel is said to have the comparative advantage in making steel.

Which of the following is NOT true about a Production Possibilities Frontier? Question options: A) The curve on a PPF cannot be shifted outward even if more resources are used or if existing technology is vastly improved. B) A production possibilities frontier is the curve on a graph showing the maximum output possible of two goods from a mix of inputs. C) The curve on a PPF shows the maximum output possible when using all resources to their fullest and best extent. D) A point inside the PPF indicates either that resources are not being fully used or they are being used in an inappropriate or inefficient manner.

The curve on a PPF cannot be shifted outward even if more resources are used or if existing technology is vastly improved.

Which of the following is NOT true about Gross Domestic Product (GDP) Question options: GDP is the dollar value of all final goods and services produced within the border of a country in a given time period. Intermediate goods, which are used to produce other goods, are NOT counted in GDP The dollar value of cars manufactured in Japanese or German auto plants in the United States are not included in Crass Domesticated Produce Counting intermediate goods in GDP would result in double counting because their value is reflected in the price of final goods and services

The dollar value of cars manufactured in Japanese or German auto plants in the United States are not included in Crass Domesticated Produce

Which of the following is correct about Aggregate Expenditure? Question options: A) The four components of aggregate expenditure are consumption, taxes, government spending and net revenue. B) The four components of aggregate expenditure are consumption, investment, government spending and net exports (X-M). C) The four components of aggregate expenditure are revenues, investment, government spending and net deficits. D) The five components of aggregate expenditure are consumption, net taxes, investment, government borrowing and net revenues.

The four components of aggregate expenditure are consumption, investment, government spending and net exports (X-M).

Which of the following provides a correct example of Normative Economics? Question options: A) The inflation rate measures inflation. B) The unemployment rate measures the percent of the labor force that is unemployed. C) The government should provide a minimum total welfare payment to poor people that is at least 80% of the local minimum wage salary. D) The Unemployment Rate for 2017 is lower than it was for 2016.

The government should provide a minimum total welfare payment to poor people that is at least 80% of the local minimum wage salary.

Which of the following causes a surplus? Question options: A) Current price falls exactly on the equilibrium price. B) Natural market forces cause the temporary current price to fall below the equilibrium price, so quantity demanded exceeds quantity supplied. C) The minimum price is set above the equilibrium price resulting in quantity supplied exceeding quantity demanded. D) Poor government policy forces the short term price below the equilibrium price.

The minimum price is set above the equilibrium price resulting in quantity supplied exceeding quantity demanded.

What factor is key to determining which good a person or country should specialize in producing? Question options: A) The person or country with the greatest opportunity cost of producing a good should specialize in that good. B) The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost. C) Specialization should be based on the personal interest of an individual and the national interest of the country. D) The key factor in determining specialization is the opportunity advantage of comparative production.

The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost.

Which of the following statements correctly states the relationship between Comparative Advantage and Specialization? Question options: A) Countries that can compare their advantages over another country have the specialization advantage over those countries. B) The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost. C) The comparative advantage is found by determining the firm with the greatest opportunity cost of production. Companies with the comparative advantage should supply the firms that specialize in that product. D) Comparative Advantage determines the opportunity cost of production. The productive opportunity cost should be highest for those firms that specialize in making one comparative good.

The person or country with the comparative advantage in making a good should specialize in making that good. The comparative advantage is based on having the lower opportunity cost.

Which of the following will NOT change the supply of lead pencils? A) The cost of wood. B) The cost of lead. C) The cost of production of pencils. D) The price of pencils.

The price of pencils.

What happens to the quantity demanded of all goods and services when the price level falls? Question options: A) The quantity demanded of all goods and services in the economy rises. B) The quantity demanded of all goods and services in an economy falls dramatically. C) There is no effect on the quantity demanded. D) The quantity demanded does not change but the demand for quantity does.

The quantity demanded of all goods and services in the economy rises.

Which of the following is NOT true about the basis or source of productivity? Question options: A) The resource most responsible for increasing labor productivity is the attitude and devotion of the average worker. B) The resource most responsible for increasing labor productivity is either an increase in the quantity or the quality of capital. C) An major improvement in technology will result in increasing labor productivity. D) An increase in the amount of capital will increase labor productivity.

The resource most responsible for increasing labor productivity is the attitude and devotion of the average worker.

Which of the following is correct about the sole proprietorship? Question options: A) They are the most common form of business organization. B) They generate over 90% of all business revenue. C) The sole proprietorship is the most common business form but it only generates a tiny portion of all business sales. D) It is responsible for the production of over 90% of all shoe production in the United States.

The sole proprietorship is the most common business form but it only generates a tiny portion of all business sales.

Which of the following is correct about the term "full employment", as used by economists. Question options: A) Full employment means no one needs a job. B) The term "full employment", as used by economists is not a zero unemployment rate. Full employment, as used by economists, just means there is no cyclical unemployment, even if some structural, seasonal or frictional unemployment exists. C) Full employment means everyone over 16 is working full time. D) Full employment means everyone 25-65 is working full time.

The term "full employment", as used by economists is not a zero unemployment rate. Full employment, as used by economists, just means there is no cyclical unemployment, even if some structural, seasonal or frictional unemployment exists.

Which of the following is correct about the top 1% of income earners? Question options: A) They pay the same amount of taxes as their secretaries. B) They pay 1% of all incomes taxes. C) The top 1% of income earners pay over a third of all tax revenues. D) They pay less in taxes than the bottom 1% of wage earners.

The top 1% of income earners pay over a third of all tax revenues.

As used in economics, to what does the term "marginal" refer? Question options: A) The word "marginal" refers to the incremental or additional change that results from buying one more unit of something or doing one more specified action. B) As used by economists, "marginal" means insignificant or of little consequence. C) Economists used the word "marginal" to express the idea of minimal relevance to an economic transaction. D) Marginal refers to a substitute for a naturally occurring economic good.

The word "marginal" refers to the incremental or additional change that results from buying one more unit of something or doing one more specified action.

What is the difference between the information in the Supply Schedule of a good and its Supply Curve? Question options: A) The supply schedule has larger quantities supplied at each price than occur in the supply curve. B) The supply curve is always much greater than the supply schedule. C) There is no difference. D) The supply schedule has lower quantities supplied at each price than occur on the supply curve.

There is no difference.

Which of the following is NOT true about private and public goods? Question options: A) Private goods are rival in consumption, meaning that consumption by one person precludes its consumption by another. A public good, such as a paved road, is nonrival. B) Private goods are excludable, meaning a nonpayer can be excluded from using or consuming the good. Public goods are nonexcludable. C) Public goods are available to all. Once produced, nonpayers cannot easily be prevented from enjoying the true public good. D) To be a public good, it need only be nonrival or nonexcludable, not both.

To be a public good, it need only be nonrival or nonexcludable, not both.

Which of the following is NOT included in GDP? Question options: A) Tools sold to consumer to use at home. B) Tools sold to manufacturer to produce final goods. C) Equipment purchased by consumers. D) Gas and oil.

Tools sold to manufacturer to produce final goods.

Which of the following is correct about U.S. Gross Domestic Product? Question options: A) GDP does not include value of production of United States by foreign owned companies. B) GDP excludes value of Japanese production in U.S. C) U.S. GDP includes value of Japanese cars made in the United States. D) U.S. GDP includes GDP of all foreign countries.

U.S. GDP includes value of Japanese cars made in the United States.

Which of the following is included in U.S. GDP? Question options: A) Value of automobile production in France by U.S. automakers. B) Total dollar value of U.S. production in foreign countries. C) Coca-Cola sales in China. D) Value of automotive production by Japanese and German auto makers in the United States.

Value of automotive production by Japanese and German auto makers in the United States.

Which of the following is correct about an Economic Contraction? Question options: A) While expansion is when employment, total national output and total national income is rising, an economic contraction is when these measures are falling. A recession is when the economy contracts for longer than just a few months. B) An economic contraction is illustrated by a steadily rising rate of employment and level of output. C) When output and jobs are increasing, an economic contraction is well underway. D) A major negative side effect of an economic contraction is inflation.

While expansion is when employment, total national output and total national income is rising, an economic contraction is when these measures are falling. A recession is when the economy contracts for longer than just a few months.

Which of the following indicates that the U.S. has a Mixed Economic System? Question options: A) 25% of economy powered by perfectly competitive firms. 35% of production from firms with moderate competition. 30% from monopolies and 10% from government endowed corporations. B) While most corporations have private citizens on their boards of direction, some 25% must include at least one high level federal official. C) While most production is achieved through profit seeking private firms, Federal agencies regulate safety in the workplace, safety of food and medicines, water standards, and ensure maximum competitiveness in the overall economy. D) Half of corporations are purely private while the other half have some form of government subsidy or financial guarantees.

While most production is achieved through profit seeking private firms, Federal agencies regulate safety in the workplace, safety of food and medicines, water standards, and ensure maximum competitiveness in the overall economy.

Joe has an extra $30 to spend. His top three choices, in order of preference, are, (1) buying a soccer ball, (2) buying a pair of jeans or (3) going to a concert. What is his opportunity cost of buying the soccer ball? Question options: A) buying a pair of jeans or going to the concert B) the price difference between the concert and the pair of jeans C) buying the pair or jeans D) going to the concert

buying the pair or jeans