Econ Study Guide
you pay stub from your job deducts money from FICA. what does this mean A.money is being withheld to fund Social Security and Medicare B.money is being withheld for federal, sate, and city taxes C.money is being withheld for personal exemptions and deductions D.money is being withheld for excise and estate taxes
A.money is being withheld to fund Social Security and Medicare
what is the difference between a primary market and a secondary market A.primary market:financial assets can be redeemed only by the original investor; secondary market: assets can be resold B.primary market: paid first if a firm is in trouble; secondary market: gets what is left C.primary market: redeemed by a firm's assets; secondary market:redeemed by money owed to a firm D.primary market: money that lent for less than a year; secondary market: money lent for a longer time
A.primary market:financial assets can be redeemed only by the original investor; secondary market: assets can be resold
what is the intent of both deregulation and antitrust laws A.to increase competition B.to increase government control C.to prevent inefficiency D.to prevent monopolies
A.to increase competition
When government intervention cause supply of a good to rise, what happens to the supply curve? A. It shifts left B. It shifts right C. It reverses direction D. It's not affected
B It shifts right
Which of these is human capital? A. an accountant's wages B. a taxi driver's knowledge of city streets C. a seamstress's sewing machine D. a doctor's health-care tools
B a taxi driver's knowledge of city streets
In a centrally planned economy, the forces of self-interest and competition A.work together B.are absent C.regulate prices D.override the central bureaucracy
B are absent
An economist who focuses on microeconomist might study which of the following A.inflation B.household credit card debt C.income D.unemployment
B household credit card debt
What does elasticity of demand measure? A.an increase in the quantity available B.how buyers will cut back or increase their demand when price rises or falls C.a decrease in the quantity demanded D.the amount of time consumers need to change their demand for a good
B how buyers will cut back or increase their demand when price rises or falls
a demand curve is accurate only as long as ceteris paribus is true. what does this latin phrase mean A.goods are used in place of one another B. all things other than price stay constant C.demand for goods remains elastic D.supply can keep up with prices
B. all things other than price stay constant
what percentage of all businesses are partnerships A.2% B.9% C.15% D.25%
B.9%
which of the following is a financial asset traded on financial asset markets A.growth stock B.certificates of deposit C.income stock D.call option
B.certificates of deposit
why are coins easier than gold bars to use as money A.coins are more durable B.coins are more portable C.coins are more uniform D.coins are more limited
B.coins are more portable
what is a commodity A.cars B.gas C.gift wrap D.winter coats
B.gas
what might happen if the government creates more money to cover a large deficit A. crowding-out effect B.hyperinflation C.recession D.unemployment
B.hyperinflation
in a perfectly competitive market, output A.maximizes profits for company owners B.is just enough to cover opportunity costs C.exceeds customer demands for the supply D.reflects the trends of the stock market
B.is just enough to cover opportunity costs
which of these is a limitation of GDP A.it does not include government goods and services B.it does not measure a country's well-being C.it does not measure the success of a country's economy D.it does not include goods that are exported
B.it does not measure a country's well-being
in 1800s people in mining towns in the West often paid for goods with gold. what was the function of gold A.it was used as part of a barter system B.it was used as currency C.it was used as representative money D.it was used as fiat money
B.it was used as currency
karen wants to buy stock, but she is worried about the current "bear market. what does a bear market mean A.stock prices are rising, making it a good time to buy B.many investors are selling their stocks C.stock prices are rising, making it a bad time to buy D.many investors are buying stocks
B.many investors are selling their stocks
what is the main activity of a producer cooperative A.buying products for its members B.selling products for its members C.producing products for its members D.donating products for its members
B.selling products for its members
what is labor productivity A.the total number of workers in an economy B.the amount of output produced per worker C.the total amount of work produced in an economy D.the average training per worker
B.the amount of output produced per worker
what condition is necessary for fiat money system to work A.money owed by customers must be paid on time B.the governments must control the money supply C.banks must hold enough gold to cover paper money that they give out D.customers with checking accounts cannot earn interest
B.the governments must control the money supply
how do budget deficits contribute to the national debt A.the national debt is increased by double each budget deficit B.the national debt is increased by each budget deficit C.the national debt is reduced by each budget deficit D. the interest rate paid on the national debt is increased by each budget deficit
B.the national debt is increased by each budget deficit
what is the purpose of PAYGO A. to write the federal budget, which congress and the President must approve B.to decrease deficits by requiring Congress to raise enough revenue to cover direct-spending increases C.to require the federal government to balance the budget or face automatic spending cuts D.to help families with dependent children by paying them cash
B.to decrease deficits by requiring Congress to raise enough revenue to cover direct-spending increases
a company owner wants to make more baseballs. it costs $4.00 to make 10 baseballs. it costs $4.10 to make 11 baseballs. what is the marginal cost of making one more baseball A.20 cents B.30 cents C.10 cents D.40 cents
C 10 cents
Which is an example of an eco. shortage? A. a farmer w/out enough water for crops B. too many jobs available C.a toy store w/out dolls D. too much bread on store shelves
C a toy store w/out dolls
Gerda owns a grocery store. Increasing prices make her willing to supply more. What is the first thing Gerda does? A.increase her tax payments B.move to a bigger store C.have people work more hours D.limit the variety of food she sells
C have people work more hours
What can a decision-making grid do? A. tell you the right decision to make B. Show you every possible consequence of your decision C. help you determine some of the opportunity costs for your decision D.show you every possible benefit of your decision
C help you determine some of the opportunity costs for your decision
what is one reason the us government regulates car manufacturing A.to keep out foreign-made cars B.to keep us car prices competitive C.to offset the pollution caused by cars D.to product market competitive
C to offset the pollution caused by cars
what kind of assets are traded using futures contracts A.stocks B.bonds C.commodities D.real estate
C.commodities
how is the unemployment rate determined A.divide the number of unemployed people by the total population and multiply by 100 B.subtract the number of employed people from the total populations C.divide the number of unemployed people by the labor force and multiply by 100 D.add the number of employed and unemployed people and divide by 100
C.divide the number of unemployed people by the labor force and multiply by 100
the fact that money can withstand the wear and tear that comes from being used over and over again is a measure of its A.portability B.currency C.durability D.uniformity
C.durability
what happens when a company gains market power A.it must invest its profits in future goods B.it decreases its share of profits in the industry C.it has the abil D.it makes very good products that benefit society
C.it has the abil
why would investors buy junk bonds A.junk bonds are safe investments B.junk bonds are investment grade C.junk bonds pay higher interest D.junk bonds are sold by interesting firms
C.junk bonds pay higher interest
Little Joe's Company made $50000 in taxable income one year. Big Al's Company made $20000000 in taxable income that year. the corporate tax rate is $100000 of income and 35% on income over $100000. How much does each company owe A. little joe:$17500; big al $3000000 B.little joe:$7500; big al $3000000 C.little joe: $7500; big al $6980000 D.little hoe: $17500; big al $6965000
C.little joe: $7500; big al $6980000
your receipt from a department stores says that you paid a 5% sales tax on sports equipment. this sales tax is an example of a(n) A.proportional tax B.progressive tax C.regressive tax D.income tax
C.regressive tax
to improve its standard of living, a nation's economy must A.remain stable B.grow through innovation C.reach economic equity D.allow the central gov. to make economic decisions
D allow the central gov. to make economic decisions
the government claimed that, to illegally extend its control over the market, microsoft had used A.predatory pricing and mergers B.predatory pricing and buying out competitors C.predatory pricing and forming a cartel D.predatory pricing and requiring customers to buy other products
D.predatory pricing and requiring customers to buy other products
Which of the following are factors of production? A. Capital &Land B. scarcity and shortages C. tech. & productivity D. eco. and business decisions
A Capital &Land
For which of the following goods is supply likely to be in elastic in the short term whether prices rise or fall A. Cargo ships B. Haircuts C. Newspapers D. Staples
A Cargo ships
The gov. of a country must make a decision b/w increasing military spending and subsidizing wheat farmers. This is an example of: A. a guns or butter issue B.decision-making at the margin C. underutilization of resources D. the law of increasing costs
A a guns or butter issue
An eco. that is producing max amount of goods and services is considered? A. efficient B. underutilized C. growing D. trading off
A efficient
Each society answers the three basics economic questions based on A.its unique combination of values and goals B.the number of factor payments C.a degree of eco. growth D.the desire to achieve eco. freedom
A its unique combination of values and goals
which of the following are ways the government controls markets A.price ceiling and price floors B.equilibrium price and equilibrium point C.shortages and surpluses D.subsidies and disequilibrium
A price ceiling and price floors
The physical capital used by a woodworker to make furniture would include A. saws and drills B.trees and oil C.handwork and money D.a workshop and money
A saws and drills
What is the difference b/w a shortage and a scarcity? A. shortage=temporary & scarcity=always exists B. shortage= b/c of rising prices & scarcity=b/c of falling prices C. shortage=lack of all goods and services &scarcity=single item D. There is no diff.
A shortage=temporary & scarcity=always exists
suppose the supply of walnuts is inelastic. what will growers do if the price of changes A.they will not produce more walnuts, even if the price doubles B.they will quickly produce more walnuts, even if there is a small increase in price C.they will produce more walnuts when the price drops D.they will have to respond to the decreasing marginal returns of labor
A they will not produce more
what is one reason governments give farmers subsidies A.to keep food supplies up B.to help farmers pay back debts C.to increase the cost of production D.to help people forget past shortages
A to keep food supplies up
how do economist calculate GDP for one year using the expenditure approach A. add together all the amounts spend on final goods and services B.add up all the incomes received C.add the amounts spent on goods and services to incomes received D.subtract the amounts received as incomes from the goods and services
A. add together all the amounts spend on final goods and services
financial intermediaries include A. savings and loan associations, credit union, and pension funds B.stockbrokers, brokerage firms, and speculators C.all buyers, savers, traders, and investors D.financial asset markets and stock exchange
A. savings and loan associations, credit union, and pension funds
what did john maynard keynes believe should be the government's role in the economy A.active involvement B.contractionary fiscal policy C.lassez-faire D.emergency action only
A.active involvement
acme part supplies is a consumer cooperative. its prices are usually lower than other party supply stores because consumer cooperative A.buy goods in large quantities B.charge annual membership fees C.require members to work at the store D.help members sell their products
A.buy goods in large quantities
when demand is elastic, why is it harder for sellers to shift a new tax to consumers A.consumers will not buy the good or service if it costs too much B.when the supply decreases consumers worry about a shortage C.consumers need to buy the good or service no matter how much it costs D.when the supply increases, the price increases
A.consumers will not buy the good or service if it costs too much
what can businesses deduct from income A.health benefits B.profits C.earnings D.revenues
A.health benefits
you are a financial advisor whose client wants stock that pays regular dividends. you advise him to by A.income stock B.growth stock C.common stock D.preferred stock
A.income stock
if a sole proprietorship fails, the owner of the business A.must pay all the business debts B.must pay off the investors C.has to do a lot of legal work to close the business D.must wait 10 business days before starting another business
A.must pay all the business debts
how are prices and output of goods in a monopoly different from pices and output goods in perfect competition A.output is low and prices are high B.output is high and prices are low C.output is the same, but prices are lower D.output is the same, but prices are higher
A.output is low and prices are high
What happens when you make a purchase at a store using a credit card A.the credit card issuer pays the store the amount of the purchase B.the money is immediately deducted from your checking account C.the amount of the purchase is deducted from the prepaid account D.the store gets repaid a little money each month, plus interest
A.the credit card issuer pays the store the amount of the purchase
what is a major advantage of sole proprietorship A.the owner has full control over business B.the owner has no liability for business debts C.human capital is unlimited D.finding good employees is easy
A.the owner has full control over business
how do economists calculate GDP using the expenditure approach A.they add up all the amounts spent on final goods and services B.they add up all incomes received C.they subtract the value of all goods and services from all incomes D.they subtract all incomes from the value of all goods and services
A.they add up all the amounts spent on final goods and services
How can the demand for one good be affected by increased demand for another one? A.when goods are bought together, increased demand for the other B.if goods are used together, increased demand for one will increase demand for the other C.if goods are substitutes, increased demand for one will increase demand for the other D.a drop in the price for a good will increase demand for it and its substitute
B if goods are used together, increased demand for one will increase demand for the other
Which of the following is an advantage of a sole proprietorship A.it is easy to expand if it succeeds B.it faces few government rules C.it is easy to get financing to start one D.it has the lowest federal income taxes
B it faces few government rules
Which of the following is an advantage of a sole proprietorship A.it is easy to expand if it succeeds B.it is the least regulated form of business organizations C.it is easy to get financing to start one D.it has the lowest rate of federal income taxes
B it is the least regulated form of business organizations
When any effort by government causes the supply of a good to rise, what happens to the supply curve for that good? A.it shifts to the left B.it shifts to the right C.a point on the curve moves up D.the supply curve is not affected
B it shifts to the right
If a baker's supply of bread exceeds the demand for bread, he should A.stop selling bread B.lower the price of bread C.sell only bread D.raise the price of bread
B lower the price of bread
due to an increase in her rent, Isa needs to cut back her spending time on other items. which of the following types of goods will Isa consume less of A.substitutes B. normal goods C.inferior goods D.complements
B normal goods
Which of the following describes a centrally planned economy A.the central government follows laissez-faire policies B. the central government makes all economic decisions C. the central government lets factories set their own goals D.the central government lets the market set wages for jobs
B the central government makes all economic decisions
Human capital includes A.the salary paid to an accountant B.the knowledge a taxi driver has of the city streets C.the machinery run by a seamstress to weave a cloth D.the equipment used by a doctor to cure a patient
B the knowledge a taxi driver has of the city streets
what is the government's goal in buying excess crops or other agricultural products A.to raise minimum wage B.to keep prices from going down C.to set legal price ceilings D.to lower prices
B to keep prices from going down
A country is changing from a centrally planned economy to a free-market economy. What will be one difficulty for citizens in this country? A. farmers will have to grow the crops that the government instructs them to B.only poor quality goods will become available to consumers C.workers will lose job security and guaranteed incomes D.entrepreneurs will have fewer opportunities to start a new business
C workers will lose job security and guaranteed incomes
You bought 2 new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity cost of these CDs? A.the difference b/w the cost to produce them and the price you paid for them B. The $30 check you wrote for the CDs C. the night out with your friends that you missed because you can't afford it now D. the satisfaction of knowing you are the first of your friends to have these CDs
C. the night out with your friends that you missed because you can't afford it now
a government deregulates its airlines. what is likely to happen next A.more people buy airplane tickets B.airlines purchase better airplanes C.airlines have more control over prices D.more airplanes fly to more places
C.airlines have more control over prices
money market mutual funds are riskier than savings accounts because they A. cannot be cashed in for at least 6 months B.are invested in bonds with high failure rates C.are not insured by the federal government D.yield low returns because of their interest rates
C.are not insured by the federal government
what will happen to price, supply, and demand when a surplus of a product develops A.price and demand will rise. at the same time, supply will fall B.price will rise. at the same time, supply and demand will fall C.price and supply will fall. at the same time, demand will rise D.price will fall. at the same time, demand and supply will rise
C.price and supply will fall. at the same time, demand will rise
What is the difference between real GDP and nominal GDP A.real DGP is accurate to hundreds of dollars; nominal GDP is accurate thousands of dollars B.real GDP includes non market activities; nominal GDP has no non market activities C.real GDP is based on constant prices; nominal GDP is based on the current year"s prices D.real GDP allows for depreciation; nominal GDP allows for no depreciation
C.real GDP is based on constant prices; nominal GDP is based on the current year"s prices
what is the difference between how simple and compound interest are paid A.simple interest: as long as money is in the bank; compound interest: a year at a time B.simple interest: once a year; compound interest: quarterly C.simple interest: on principle only; compound interest: on both principal and interest D.simple and compound interest are two names for the same thing
C.simple interest: on principle only; compound interest: on both principal and interest
what does limited liability mean for stockholders A.the corporation is not responsible for stockholders' debts B.the corporation's managers are not responsible for its debts C.stockholders can lose the money they invested D.the corporation can sell stock
C.stockholders can lose the money they invested
why does higher savings lead to higher GDP A.the government taxes savings to pay for education B.stockbrokers, brokerage firms, and speculators gain more profits C.the saved money is lent by banks to businesses, who use the money to expand D.a higher savings rate encourages immigration, which increases the number of workers
C.the saved money is lent by banks to businesses, who use the money to expand
a major disadvantage of the sole proprietorship is that A.the business cannot be sold off it does well B.the business can be difficult to relocate C.the sole proprietor may have problems borrowing money from a bank D.no one can work for the business owner
C.the sole proprietor may have problems borrowing money from a bank
which of the following is the biggest disadvantage of using shells instead of coins as money A.durability B.portability C.uniformity D.divisibility
C.uniformity
What is the difference between a business cycle and the day-to-day fluctuations of the stock market A.day-to-day fluctuations are more predictable than a business cycle B.day-to-day fluctuations have greater impact on people's finances than a business cycle C.a business cycle is usually more restricted, whereas day-to-day fluctuations are worldwide D.a business cycle consists of prolonged fluctuations rather than a day-to-day fluctuations
D a business cycle consists of prolonged fluctuations rather than a day-to-day fluctuations
What kinds of goods can be compared on a production possibilities curve? A. farm goods&factory good B. 2 types of farm goods C. 2 types of factory goods D. any 2 categories of goods
D any 2 categories of goods
Where are traditional economies usually found? A.in small communities that welcome change B. in large communities that welcome change C. in large communities that are able to deal with environmental disaster D. in small communities that avoid change
D in small communities that avoid change
traditional economic are usually A.small, close communities that welcome change and new technology B. large, widespread communities that are able C.large, widespread communities that are able to deal with environmental disaster D.in small communities that avoid change
D in small communities that avoid change
Which of these is missing in a centrally planned economy A.bureaucracy B.poorly made goods C.social goals D.incentives
D incentives
How is the US gov. involved in the factor market A. It buys paper from firms B.it purchases telephones and computers C.it tells businesses and firms what to purpose D.it pays wages to gov. employees
D it pays wages to gov. employees
which of the following products has inelastic demand? A. a particular soft drink B.candy bars C.steaks D. medicine
D medicine
what is prospectus A.a pool of money from various investors B.a report for an individual's investments C.a collection of financial assets D.a report for possible investors
D.a report for possible investors
which of the following is an example of representative money A.a fur coat B.diamonds C.gold earrings D.an IOU note
D.an IOU note
according to keynesian economics, the government could prevent, or reduce the severity of, inflation by A.increasing transfer payments B.applying an expansionary fiscal policy C.increasing federal spending D.applying a contractionary fiscal policy
D.applying a contractionary fiscal policy
what is fractional reserve banking A.only some deposits must be paid on demand B.banks lend only some of their money as mortgages C.people transfer money and pay bills electronically D.banks keep some money on hand and lend out the rest
D.banks keep some money on hand and lend out the rest
how does a bank make most of its profit on its business A.by collecting fees on credit card purchases B.by collecting fees on safe deposit boxes C.by receiving fees from the government for handling federal and state accounts D.by paying out less in interest on deposits than it earns in interest on loans
D.by paying out less in interest on deposits than it earns in interest on loans
the main difference between monopolistic competition and perfect competition is that A.in perfect competition prices are set by the gov. B.in perfect competition the buyer is free to buy from any seller C.in monopolistic competition there are fewer sellers and more buyers D.in monopolistic competition sellers can profit from differences between products
D.in monopolistic competition sellers can profit from differences between products
why don't government planners try to end seasonal unemployment A.it would eliminate too many jobs B.many people do not want to work all year C.it would be too expensive D.it's a natural part of a healthy eco.
D.it's a natural part of a healthy eco.
which describes a bear market A.stocks are staying the same B.some stocks are going up and some are going down C.most stock prices are rising D.most stock prices are falling
D.most stock prices are falling
you want to buy stock, but you are concerned about losing your investment if the company goes out of business. what kind of stock should you buy A.income stock B.growth stock C.common stock D.prefered stock
D.prefered stock
why do companies practice price discrimination A.price discrimination enables companie to charge all consumers the same price for a good or service B.price discrimination allows companies to defend an illegal monopoly against free market competition C.price discrimination provides individual producers with an advantage in perfectly competitive markets D.price discrimination maximizes profits by charging different prices to different groups of consumers
D.price discrimination maximizes profits by charging different prices to different groups of consumers
a tax rate that increases as income rises is a A.proportional tax B.regressive tax C.variable tax D.progressive tax
D.progressive tax
what condition has been reached when the buyers purchase exactly as much as the sellers sell A.supply and demand B.shortage C.equilibrium D.price floor
c equilibrium
Why does an economist create a market demand schedule? A.to learn what demands the market under unusual conditions B.to have an idea of how a market would change if conditions in an area changed C.to predict how people will change their buying habits when prices change D.to show how various conditions can change the demand for a good
c to predict how people will change their buying habits when prices change