Economic Unit 4 review

(4.3)Proportion taxes

11% on person who earn 40 grand per year and 11% on person who earns 120k per year

(4.4)In how many cities are Federal Reserve district banks located?

12

(4.8)Which best describes the difference between sole proprietorships and partnerships?

Sole proprietors keep all profits and have unlimited liability, while partners split profits and share liabilities.

(4.8)A disadvantage of corporations is that shareholders have to pay__ on profits.

Taxes

(4.5)Which most likely explains why the costs and benefits shown by the EPA are higher than the other regulatory agencies?

The EPA legislates and enforces more regulations that reap greater benefits than the other agencies.

(4.8)Which describes the process of how a business incorporates?

The business must gain government permission and issue a stock sale, followed by a shareholder vote.

(4.8)What role does a fast-food corporation play when it agrees to franchise its business? Check all that apply.

The franchisor will select a location. The franchisor will supply training. The franchisor will supply advertising. The franchisor will collect most profits.

(4.7)How will an increase in the percentage of older Americans affect the healthcare field?

The healthcare field will create new jobs because more people will need care.

(4.8)How do corporations raise money and resources to expand?

They agree to sell stocks.

(4.7)Read the excerpt from a letter about the early trade union movement. The trade union movement came into being as a movement of hunger. It was made necessary by conditions. It was in the beginning formed in response to a hunger for enough to eat . . . As it became possible to secure more food, other hungers demandedsatisfaction . . . The demands were for more and better food, for better clothes and for better homes. It required a struggle to satisfy these needs . . . [A]t every step of the way it was necessary to overcome the stubborn opposition of employers who were resolved not to recede and not to relinquish any of the powers and privileges which they possessed. —Samuel Gompers, 1920 What does the author believe about factory owners?

They are greedy and selfish.

(4.8)What happens to earnings in a cooperative?

They are shared with member owners.

(4.6)How did Adam Smith's economic ideas help the United States establish a free enterprise system? Check all that apply.

They led to open competition for consumers. They led to individual ownership of property. They led to freedom of choice for consumers and producers.

(4.3)Which best explains how contractionary policies can hamper economic growth?

They reduce disposable income.

(4.6)Which best describes how individuals help the economy grow?

They work to influence money supply

(4.7)What is one benefit for US workers who have a college degree rather than a high school diploma?

Those with a college degree earn nearly twice as much as those without college.

(4.7)_____laws ensure that workers are paid if they are injured on the job.

Worker compensation

(4.8)Which document determines the number of shares a company can sell?

a corporate charter

(4.1)Public policy can be best defined as

a course of action the government takes in response to an issue or problem.

(4.7)What event had an enormous effect on US workplace safety?

a deadly factory fire

(4.6)An economic thinker who influenced early economists was

adam smith

(4.5)Which are results of regulation in a mixed-market economy? Check all that apply.

advantages for government control of externalities control of markets

(4.7)Who benefits most from workplace safety regulations?

all workers, who are less likely to miss work because of injury or face high medical bills

(4.8)A disadvantage of forming a partnership is that owners

are fully responsible for their partners' losses.

(4.8)An entrepreneur who opens a franchise must

assume debt

(4.9)What is one way for an entrepreneur to decrease risk?

by creating a strong business strategy

(4.3)Governments collects taxes to ensure that

citizens contribute to meeting society's needs.

(4.4)Which best describes a central bank's primary goals?

controlling inflation and reducing unemployment

(4.8)Franchising is typically done by

corporation

(4.4)Which best describes a central bank's primary role?

creating monetary policy

(4.9)A new business should be based on an entrepreneur's individual interests because the entrepreneur must

dedicate as many hours as needed to the work

(4.3)High government expenditures can lead to a bigger

deficit.

(4.5)Government regulation is intended to

discourage producers from taking harmful actions.

(4.2)The pie chart shows federal spending in 2010. Which of the following was the highest spending priority for the federal government in 2010?

education/health and human services

(4.1)Which of these policies would a government take when it comes to employment?

ensuring that as many workers are employed as possible

(Extra)Successful entrepreneurs contribute to the economy by

expanding market

(4.4)The___ rate is the interest rate banks charge each other for borrowing or storing money.

federal funds

(4.9)What must an entrepreneur do after creating a business plan?

finance the business

(4.8)Which are examples of sole proprietorships? Check all that apply.

independent workers tax preparers freelance writers

(4.3)A sales tax is a type of

indirect tax.

(4.1)According to the scenario, what is the greatest economic challenge that Country D is facing?

inflation

(4.6)Monetarism plays a role in economic growth by

influencing the supply of money.

(4.5)Which are duties of OSHA? Check all that apply.

investigating worker complaints, inspecting businesses

(4.1)What course of action might a government take to respond to the downturn revealed in this graph?

investing in job-training programs

(4.7)What is the definition of collective bargaining?

labor union and employer negotiations about wages and other issues

(4.4)Economists studying the money supply categorize the status of the money based on

liquidity.

(4.6)Milton Friedman led a new economic school of thought called

monetarism.

(4.2) The graph shows government spending as a percentage of GDP from 1990 to 2012. At its peak, government spending made up about

one quarter of GDP.

(4.9)An entrepreneur would most likely be a

person who works well alone.

(4.5)The Food and Drug Administration sets standards for

product labeling

(4.2)When governments inject money into the economy, which of the following are their goals? Check all that apply.

reducing unemployment improving economic stability encouraging competition improving production

(4.1)Rules ensuring that businesses offer safe products to consumers are part of a nation's

regulatory policy.

(4.9)An entrepreneur must accept being accountable for the failure of the company because the entrepreneur is

responsible for organizing the business.

(4.8)Based on the chart, the primary responsibility of shareholders is to

run the business by electing a board of directors, who then hire the company's leaders.

(4.5)Regulatory agencies such as the OCC and the FDIC add to the banking system.

safety

(4.8)People who buy stock in a company are known as

shareholders

(4.2)When revenues are higher than expenditures in a budget, that budget

show a surplus

(4.2)When expenditures are higher than revenues in a budget, that budget

shows a deficit.

(Extra)Before creating a business plan, an entrepreneur must research businesses in the past.

simliar

(4.8)The most common business organizations in the United States are

sole proprietorships.

(4.4)Which of these is a banking activity of the Fed?

storing money for banks

(4.2)What does deficit spending require a government to do?

take on debt

(4.3) AN ___ is a tax issued by the federal government on imported goods

tarif

What gives the US government the power to collect taxes? (4.3)

the Constitution

(4.5)A regulatory agency that makes sure banks follow federal laws is

the FDIC.

(4.1)Based on the scenario, who is most affected by the situation taking place within Country D?

the government, workers, and businesses of Country D

(4.7)What is the definition of minimum wage?

the lowest hourly pay that workers can receive

(4.7)Both newspaper journalists and postal workers have been negatively affected by

the popularity of electronic communication and the Internet.

(4.8)Franchises are attractive to business owners because

they have a proven business model.

(4.9)Because many successful business owners fail on their first attempts, the reader should assume that

they learned from their mistake

(4.9)To be successful, an entrepreneur must be willing to invest money, considerable effort, and.

time

(4.9)What is one purpose of writing a business plan before entering the market?

to differentiate the new company from the competition

(Extra)Which best explains why a sole proprietor would want a partner?

to make it easier to raise funds for expansion

(4.5)A goal of financial regulatory agencies is to

to prevent monopoly

(4.3)Which of these is most likely the US government's aim in taxing imported goods?

to protect domestic businesses

(4.7)The job outlook for physical therapists

will improve overtime

(4.6)The General Theory of Employment, Interest and Money was written by

John Maynard Keynes.

(4.2)Spending that is required by law is known as ___ spending.

Mandatory

(4.5)What makes enforcing safety standards a challenge for the Food and Drug Administration?

Many foods are imported from other countries, and the FDA must ensure those foods meet the same standards as US goods.

(4.6)According to Milton Friedman, policy is the best way to influence the economy's aggregate demand.

Monetary

(4.3)If expansionary taxation policies encourage growth, are they always appropriate to implement?

No, government services could be reduced and cause serious problems for individuals and businesses

(4.6)What is likely to happen if a new aggregate demand curve moves to the right?

Prices and output would rise in the short and long run

(4.5)Security federal agency that require finance. oversee broker, dealer, and adviser

SEC

(4.3)If a sales tax is the same for all goods sold within a given area, why are sales taxes considered regressive?

Sales tax disproportionately affects low-income earners.

(4.2)The graph shows the federal budget from 1980 to 2010. In which period did the federal budget show the greatest deficit?

2000 to 2010

(4.9)Read the graph. What can the reader conclude from the graph?

A company offering physical therapy most likely has only an 80 percent chance of surviving for at least two years.

(4.5)In which situation would government regulation most likely be necessary?

A factory requires employees to work in unsafe conditions.

(4.2)Which statements accurately describe debts and deficits? Check all that apply.

A government's budget deficit causes debt to increase. Debt requires a government to pay back more than it has borrowed. The deficit is the amount a government spends above what it brings in.

(4.4)Why does the Fed pay interest to banks?

It is interest on money held in reserve.

(4.4)If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased?

Borrowing will decrease

(4.1)Which statements describe a free enterprise system? Check all that apply.

Citizens can own property. Supply and demand drives production. Consumers and producers make their own decisions. Citizens can accumulate wealth.

(4.1)Which of these statements describes what the diagram is showing?

Economic policy must reach a balance between needs and ideals.

(4.3) Contractionary reduce give deficit or gain surplus by

High income tax, less disposable income, lower profit, less spending, improve government finances

(4.1)An organization whose members have a common cause for which they seek to influence public policy is called an

Interest group

(4.4)Which statement best describes how the Fed responds to recessions?

It increases the money supply.

(4.6)Classical economics played an important role in helping the United States establish .

free enterprise

(4.9)Successfully starting and running a business requires drive, talent, and clear vision of a long-range .

goal

(4.1) Economic interdependence means that economic policies must balance the needs of

governments, individuals, and businesses.

(4.2)Which of these effects of expansionary spending would a government most want to avoid?

higher inflation

(4.6)A government might enact expansionary spending when it is trying to

increase aggregate demand for goods.

(4.4)What is a potential negative effect of an expansionary policy?

increased inflation