ECON Literacy Quiz

When the federal government's expenditures for a year are greater than its revenue for that year, the difference is known as:

A budget deficit.

A person who starts a business to produce a new product in the marketplace is known as:

An entrepreneur.

If the United States stopped importing automobiles from Country X, who would be most likely to benefit

Automobile manufacturers in the United States

Mexico grows fruits and vegetables and Argentina produces beef. If Mexico voluntarily trades fruits and vegetables in exchange for Argentinean beef,

Both Mexico and Argentina benefit from the trade.

When a person rents an apartment, who benefits from the transaction?

Both the person renting the apartment and the landlord.

The stock market is an example of an institution within our economy that exists to help people achieve their economic goals. The existence of this institution:

Brings people who want to buy stocks together with those who want to sell stocks.

When deciding which of the two items to purchase, one should always:

Choose an item after comparing the costs and benefits of both items.

The manufacturers of XYZ winter sportswear have their manufacturing plants running night and day, but they are unable to produce enough sportswear to satisfy demand. If XYZ manufacturers cannot increase production and demand continues to increase, the price of XYZ winter sportswear will:

Increase

If the real gross domestic product of the United States has increased, but the production of goods has remained the same, then the production of services has:

Increased.

Which of the following would be most likely to accelerate innovation in the computer industry?

Investing in more research and development in the computer industry.

A large increase in the number of fast-food restaurants in a community is most likely to result in:

Lower prices and higher quality.

The resources used in the production of goods and services are limited, so society must:

Make choices about how to use resources.

Which one of the following statements about the function of money is wrong?

Money holds its value well in times of inflation.

If the price of beef doubled and the price of poultry stayed the same, people would most likely buy:

More poultry and less beef.

When governments supply products and services, these products and services usually benefit:

More than one person at a time whether they have paid for it or not.

An increase from 5% to 8% in the interest rates charged by banks would most likely encourage:

People to save money.

Which of the following are most likely to be helped by inflation?

People who borrowed money at a fixed rate of interest.

In the United States, who determines what goods and services should be produced?

Producers, consumers, and government

If your city government sets a maximum amount landlords can charge in rent, what is the most likely result?

There will be fewer apartments available than people want to rent.

For most people, the largest portion of their personal income comes from:

Wages and salaries from their jobs.