Economics

True or False? Imports are items shipped outside of the country?

False

The country of Callisto is experiencing an economic contraction. Trade and economic activity have decreased, and the GDP has fallen over the past 6 months. Callisto is most likely to be experiencing a(n) A.) recession B.) depression C.) peak D.) expansion

A.) recession

Why does the government sometimes use expansionary fiscal policy? A.) to encourage the growth and try to stop or prevent a recession B.) to expand the governments control over non-defense spending C.) to control the demand for consumer goods and services D.) to slow down the economy because fast-growing demand can exceed supply

A.) to encourage the growth and try to stop or prevent a recession

What is scarcity? A.) we have unlimited wants but limited resources B.) we have unlimited wants and unlimited resources C.) we have limited wants but unlimited resources D.) we have limited wants and limited resources

A.) we have unlimited wants but limited resources

Which of the following is a positive effect of government regulations: A.) prices controls B.) legal protection C.) unfair competition D.) increased inflation

B.) legal protection

To encourage people to buy domestic goods, a country wants foreign goods to be more costly. It imposes a tax on imported products to increase their selling prices. This tax is known as a(n) A.) bribe B.) tariff C.) quota D.) idiom

B.) tariff

A nation that exports more than it imports maintains a A.) balance of trade B.) trade surplus C.) lower standard of living D.) trade deficit

B.) trade surplus

Which is a type of capital? A.) physical B.) human C.) infrastructure D.) all of the above

D.) all of the above

Which of the following is an industrial good: A.) Tires for a tow truck B.) Matt's cell phone C.) Holiday flowers D.) Emily's home computer

A) Tires for a tow truck

Which of the following is an example of an economic want: A.) Clothing B.) Fresh air C.) Understanding D.) Conversation

A.) Clothing

What two types of unemployment make up the natural rate of unemployment? A.) Frictional & Structural B.) Frictional & Cyclical C.) Cyclical & Structural D.) Seasonal & Technilogical

A.) Frictional & Structural

In a socialist economic system, who tends to answer the question of how products will be produced? A.) Government and business B.) Government and individuals C.) Business and individuals D.) Tradition and government

A.) Government and business

A man that borrowed $1000 in 1995 and paid it back in 2006 is hurt or helped by unanticipated inflation A.) Helped B.) Hurt

A.) Helped

A tenant who is charged $850 fixed rent each year is helped or hurt by unanticipated inflation A.) Helped B.) Hurt

A.) Helped

Which of the following are qualities of monopolies: A.) High prices and low production B.) Low production and much competition C.) High prices and much competition D.) Low prices and little conpetition

A.) High prices and low production

In what economic system does the government let the market answer the 3 basic economic questions? A.) Market B.) Socialism C.) Command D.) Tradition

A.) Market

John only had $40 to spend and couldn't decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision? A.) New pair of jeans B.) $40 C.) Trip to the amusement park D.) No opportunity cost was involved

A.) New pair of jeans

Which of the following are methods that countries use to control their trade with other nations: A.) Quotas, tariffs, and subsides B.) Product standards, admission fees, and licenses C.) Tariffs, economic sanctions, and royalties D.) Embargoes, surplus charges, and product standards

A.) Quotas, tariffs, and subsides

What is the difference between Real and Nominal GDP? A.) Real represents the unchanging dollar and Nominal represents current prices B.) Real represents current prices and Nominal represents the unchanging dollar C.) Real represents current prices and Nominal represents the price of gold

A.) Real represents the unchanging dollar and Nominal represents current prices

Select the statement that best defines the term economy A.) The organized way a nation provides for its population's needs and wants B.) A political system that defines how resources can be used C.) The same thing as factors of production D.) The measurement of how much a country's people earn on average

A.) The organized way a nation provides for its population's needs and wants

A market economy is different than a command economy because A.) There is no government involvement in economic decisions B.) It is a traditional economic system C.) It is a mixed country D.) Businesses cannot decide how much goods to produce

A.) There is no government involvement in economic decisions

In many places, trash pickup is legally controlled by just one company. This is known as A.) a regulated monopoly B.) price discrimination C.) price competition D.) non price competition

A.) a regulated monopoly

Ups and downs in the level of economic activity over a period of time are called a(n) A.) business cycle B.) economic system C.) economic growth D.) inventory level

A.) business cycle

The use of federal governments' power to tax and spend to regulate the economic activity A.) fiscal policy B.) expansionary policy C.) contractionary policy D.) monetary policy

A.) fiscal policy

An economic good or service that is scarce is one that is A.) in limited supply B.) not made in America C.) readily available D.) not test-marketed

A.) in limited supply

Which of the following government actions is most likely to stimulate the economy A.) lowering tax rates B.) raising the prime interest rate C.) printing less money D.) borrowing more money

A.) lowering tax rates

Water and air are examples of _______________ resources, while people are considered to be _______________ resources. A.) natural; human B.) physical; mental C.) capital; human D.) mental; natural

A.) natural; human

One of the reasons that has caused governments roles in business to expand is that A.) people's attitudes have changed B.) products have come very technical C.) costs of production have continued to increase D.) competition in the marketplace has increased

A.) people's attitudes have changed

What is a command economy? A.) An economic system where there is no government involvement, the people are in control B.) An economic system in which a government makes economic decisions about what, when, and how much will be produced and distributed C.) It is the economic system most often associated with democratic countries D.) An economic system where the market determines demand

B.) An economic system in which a government makes economic decisions about what, when, and how much will be produced and distributed

Which of the following is one of the main principles of the private enterprise system: A.) Monopolies B.) Competition C.) Price fixing D.) Exclusive agreements

B.) Competition

A business manager realizes that the demand for his/her products now exceeds producers' capabilities, and producers had raised their prices to offset the high demand. Under these conditions, what phase of the business cycle should the manager begin to prepare for? A.) Peak B.) Contraction C.) Trough D.) Expansion

B.) Contraction

A man who lent out $500 to his friend in 1960 and is still waiting to be paid back is helped or hurt by unanticipated inflation A.) Helped B.) Hurt

B.) Hurt

A woman who saved a paycheck from 1950 by putting it under her mattress is helped or hurt by unanticipated inflation A.) Helped B.) Hurt

B.) Hurt

An elderly couple living off fixed retirement payments of $2000 a month is helped or hurt by unanticipated inflation A.) Helped B.) Hurt

B.) Hurt

Why are resources considered limited? A.) Everyone has them, and they change B.) There are not enough available for everyone to have as much of them as desired C.) There are so many that people must decide which ones to choose at any one time D.) Entrepreneurs do not invest enough of them

B.) There are not enough available for everyone to have as much of them as desired

Why should a businessperson understand business cycles? A.) To prevent the cycles from happening B.) To make plans that will help to level out cycles C.) To determine the cause of each cycle D.) To predict the exact beginning and end of cycles

B.) To make plans that will help to level out cycles

Which of the following groups of words best describes wants: A.) Limited, changing, and compensating B.) Unlimited, changing, and competing C.) Limited, unchanging, and competing D.) Unlimited, unchanging, and compensating

B.) Unlimited, changing, and competing

What are the three economic questions? A.) What produced, How produced, & for Who to consume B.) What produced, How much produced, & for Who to consume C.) What produced, How produced, & Who should produce it

B.) What produced, How much produced, & for Who to consume

An embargo is when? A.) A countries borders are open for all trade between countries B.) When a countries borders are closed to all trade C.) When an item is heavily taxed when entering a country D.) When only a limited amount of an item may enter a country

B.) When a countries borders are closed to all trade

A student purchased a laptop to use for homework assignments. In economic terms, this computer would be classified as a(n) ________________ good. A.) capital B.) consumer C.) ultimate D.) industrial

B.) consumer

A fiscal policy used to encourage economic growth, often through increase spending or tax cuts. A.) fiscal policy B.) expansionary policy C.) contractionary policy D.) monetary policy

B.) expansionary policy

What is not a characteristic of a Communist economic system? A.) society is classless B.) government is typically a democracy C.) no financial incentive to increase productivity D.) no private ownership of property

B.) government is typically a democracy

The economy of the country of Swizzleland is undergoing rapid changes. Unemployment is low, consumer spending is high, and factories are increasing their production capabilities. Which phase of the business cycle is Swizzleland in? A.) Peak B.) Trough C.) Expansion D.) Contraction

C.) Expansion

In a communist command economy, who decides how the economic questions will be answered? A.) Businesses B.) Individuals C.) Government D.) A venture team

C.) Government

What action expands economic activities? A.) Increasing the unemployment rate B.) Decreasing the purchase of durable goods C.) Increasing inventory levels D.) Decreasing investments in capital goods

C.) Increasing inventory levels

Which of the following allows the free movement of good and services among Canada, the United States, and Mexico: A.) European Union B.) World Trade Organization C.) North American Free Trade Agreement D.) Consumer Product Safety Commission

C.) North America Free Trade Agreement

Communist command economies are most likely to experience which of the following problems: A.) Shortage of capital investment B.) Surplus of consumer goods C.) Poor quality products D.) High income taxes

C.) Poor quality products

Which of the following pieces of legislation prevents monopolies from forming and hinders price fixing: A.) Clayton Act B.) Robinson-Pathan Act C.) Sherman Antitrust Act D.) Celler-Kefauver Antimerger Act

C.) Sherman Antitrust Act

George has decided to purchase a dishwasher. He is checking the newspaper ads for the best place to get quality goods and services at a reasonable price. What type of product is the dishwasher? A.) Capital B.) Convenience C.) Shopping D.) Specialty

C.) Shopping

Why do marketers classify goods and services? A.) To determine promotional budgets B.) To determine prices to charge for goods and services C.) To aid in marketing planning D.) To decide whether to increase production

C.) To aid in marketing planning

A fiscal policy used to reduce economic growth, often through decreased spending or higher taxes. A.) fiscal policy B.) expansionary policy C.) contractionary policy D.) monetary policy

C.) contractionary policy

One of the reasons that a country needs an economic system is because it A.) is independent of other nations B.) has limited wants and needs C.) has a limited supply of resources D.) has immigrants from several countries

C.) has a limited supply of resources

The biggest communication issue for businesses engaging in international trade is A.) corruption B.) power distance C.) language D.) religion

C.) language

How is the unemployment rate defined? A.) students under the age of 16 B.) stay at home moms C.) percent of individuals in the labor force that want a job D.) all of the above

C.) percent of individuals in the labor force that want a job

The government can restrict the flow of money by A.) increasing purchases B.) lowering interest rates C.) raising taxes D.) increasing employment

C.) raising taxes

Government tries to protect competition by A.) controlling the prices of products B.) restricting the production of certain products C.) regulating monopolies D.) preventing all monopolies

C.) regulating monopolies

What is inflation? A.) decreasing general level of prices B.) what you do to a balloon C.) rising general level of prices

C.) rising general level of prices

Government owns the basic means of production, by there is some private ownership of businesses under A.) communism B.) capitalism C.) socialism D.) entrepreneurship

C.) socialism

What is not a characteristic of a Socialist economic system? A.) higher taxes than capitalism B.) basic needs of all is met C.) society is classless D.) large amount of government involvement

C.) society is classless

Susan is willing to pay a high price for the brand of china that she wants for her home. This china would be classified as a(n) ________________ product. A.) shopping B.) industrial C.) specialty D.) convenience

C.) speciality

What are benefits of international trade? A.) Consumers have more choices B.) Higher employment rate C.) Producers expand to other countries D.) All of the above

D.) All of the above

What is a way to increase productivity. A.) Additional Training B.) Financial Incentive C.) Technology D.) All of the above

D.) All of the above

Because of competition, people in our society enjoy A.) a narrower selection of goods or services B.) fewer changes in existing goods or services C.) government control of our economic system and businesses D.) a higher standard of living than that of people in many other countries

D.) a higher standard of living than that of people in many other countries

What is not a characteristic of a Capitalist economic system? A.) government is typically a democracy B.) private ownership of business C.) market place competition D.) an example is Cuba

D.) an example is Cuba

The government controls the economic system and does not allow private ownership of the means of production and distribution in a ______________________ economy. A.) traditional B.) market C.) socialist command D.) communist command

D.) communist command

A large trade deficit in a nation often leads to _________________ opportunities. A.) more export B.) fewer import C.) more trade D.) fewer jobs

D.) fewer jobs

The actions that the Federal Reserve System take to influence the level of GDP and the rate of inflation in the economy. A.) fiscal policy B.) expansionary policy C.) contractionary policy D.) monetary policy

D.) monetary policy

The two main sources of revenue used to pay the costs of government regulations are A.) business and labor B.) taxpayers and no taxpayers C.) government and industry D.) taxes and borrowing

D.) taxes and borrowing

In a traditional economic system, the question of what to produce is answered by producing A.) what the government chooses B.) what consumers need and want C.) what supply dictates D.) what has always been produced

D.) what has always been produced

True or False? An economy is successful when it has low employment, increased productivity, and stable prices

True

True or False? Exports are items shipped outside of the country?

True