Economics 6-10

In which political system does the government own all businesses and the economy?

Communism

Which government agency provides consumer protection in case of a bank failure and plays a direct role in the US economy? Federal Deposit Insurance Corporation Internal Revenue Service Securities and Exchange Commission National Security Council

Federal Deposit Insurance Corporation

In the United States, businesses are driven by profit. How does the profit motive benefit the American consumer? Firms that want to stay in business provide products that are pleasing to consumers. Firms need to hire people to produce goods so that more people will be employed. Firms ensure that prices stay low so that more consumers can afford to buy them. Firms that provide the highest-quality products will make the most money.

Firms that want to stay in business provide products that are pleasing to consumers.

What benefits does competition bring to consumers?

It can lead to lower prices for consumers on goods and services. It offers consumers more choices in the marketplace.

Which is true about scarcity?

Scarcity exists because people have unlimited wants and limited resources.

Which law did President George W. Bush sign to buy toxic assets from financial institutions? TARP AIG FDIC FRB

TARP

Which is true regarding the FDIC? The FDIC takes over for failed banks. The FDIC enters money into circulation. The FDIC writes fiscal policies approved by Congress. The FDIC determines interest rates for mortgage loans.

The FDIC takes over for failed banks.

Which accurately describes why the FDIC was created? The FDIC was created in 1933 after many bank failures caused the Great Depression. The FDIC was created in 1797 after the Revolutionary War caused local banks to fail. The FDIC was created in 1918 after World War I caused national banks to fail. The FDIC was created in 2008 after many bank failures caused the Great Recession. SUBMIT FOR GRADING

The FDIC was created in 1933 after many bank failures caused the Great Depression.

The US government plays an impactful role in the economy, both directly and indirectly. Which is an example of the federal government indirectly affecting the market economy? The US government provides social security benefits for senior citizens. The US government controls the Federal Deposit Insurance Corporation. The US government owns and operates the United States Postal Service. The US government supplies electrical power to households via the Tennessee Valley Authority.

The US government provides social security benefits for senior citizens.

Entrepreneurs who like a challenge and are dedicated to bringing their ideas to life have which qualities? competitive and innovative attuned to feedback and persevering strong leadership and vision self-motivated and self-disciplined SAVE/CHECK ANSWERS

competitive and innovative

What were the top two purposes of the Tennessee Valley Authority Act? (Select all that apply.) increase presidential favor in the valley create employment in the valley increase car traffic in the valley control flooding in the valley

control flooding in the valley create employment in the valley

Which is considered a need?

daily meals

What were the functions of the Tennessee Valley Authority Act? (Select all that apply.) develop agriculture and forest land in the valley improve navigation along the Tennessee River spend tax dollars for minimal gains allow for small planes to land in the valley

develop agriculture and forest land in the valley improve navigation along the Tennessee River

Kristine and Katherine are looking to team up. They want an already established business with a great corner store location and the independence to make something good turn into something better. Which are their best options? (Select all that apply.) franchise partnership corporation online business SAVE/CHECK ANSWERS

franchise partnership

Which economic system is based on private ownership of goods and private decisions to invest in trade or business industries, with the intent of making a profit? closed economy free enterprise economy command economy communist economy

free enterprise economy

Which are characteristics that make up capitalism? (Select all that apply.) equality freedom competition government control

freedom competition

Which characteristics of capitalism drive retail companies to produce better goods and services by the best workers?

freedom competition

What is the relationship between scarcity and trade-offs?

Trade-offs are made as a result of scarcity.

Which accurately describes aspects of a partnership business structure? (Select all that apply.) Two or more individuals share the profits generated by a business. Two or more individuals share the losses incurred by a business. The business is a legal entity that spares partners from personal liability. The business pays taxes rather than the business partners paying them. SAVE/CHECK ANSWERS

Two or more individuals share the profits generated by a business. Two or more individuals share the losses incurred by a business.

What is one fundamental principle, or question, of economics?

What should the country produce?

Which is best classified as a want?

cable

Which are examples of free enterprise? private property, profit motive, competition limited government, community property, economic freedom government regulation, profit sharing, competition no government interference, profit motive, economic freedom

limited government, community property, economic freedom private property, profit motive, competition

Which disadvantage of a free market economy is most likely to lead to high unemployment?

market failure

The housing bubble expanded in 2003 when _[blank]_ were at a 50-year low. Which best completes the sentence?

mortgage interest rates

Which are characteristics of a mixed market system?

ownership of private property greater tax rates on public finances

Which are examples of consumer exchanges? (Select all that apply.) producing a wreath for a company buying lunch at a restaurant paying a teen to mow the lawn digging for raw materials

paying a teen to mow the lawn partial

Which are considered goods?

pool table couch computer

Subprime mortgages allowed many individuals to become homeowners; however, sometimes their credit scores were _[blank]_. Which most accurately completes the sentence?

poor

Which are characteristics of a command market system? (Select all that apply.)

priorities for the production of goods stricter laws to regulate economic activity

What were the goals of the Tennessee Valley Authority Act? (Select all that apply.) provide power at a lower cost improve the economy of the Southeast allow private companies to run the power plants raise taxes on the people using the power plants

provide power at a lower cost improve the economy of the Southeast

Which type of government regulation is designed to increase business competition? regulations that prohibit a single business from controlling the market environmental laws that manage and prevent wasteful use of natural resources patent laws that protect people's inventions and innovations tariff laws that tax certain imports that rival American-made products

regulations that prohibit a single business from controlling the market

When society does not have enough resources to produce all of the things people want, it is known as _[blank]_. Which correctly completes the sentence?

scarcity

What is the consumer's role in the marketplace?

someone who acquires and uses goods and services through economic exchanges

What is a characteristic of a need?

A need is something you cannot live without, such as water.

Which is an example of specialization? A person studies nursing and works in a hospital. A college student gets a double major in math and economics. A person stays at the same company until retiring. A college student works on a part-time basis while going to school. SAVE/CHECK ANSWERS

A person studies nursing and works in a hospital.

Which famous economist wrote The Wealth of Nations?

Adam Smith

Which is true regarding scarcity?

All individuals and businesses face the problem of scarcity.

Which political theory allows for voluntary cooperation between citizens and the absence of government?

Anarchism

The free enterprise economy is most closely aligned with which system?

Capitalism

How does business competition impact the consumer?

It helps them because it keeps the price of goods low.

What is a positive consequence of competition among firms? It promotes monopolies. It prevents surpluses. It ensures high quality. It keeps prices low.

It keeps prices low.

What does the JOBS Act do for companies? (Select all that apply.) It makes it easier for certain companies to go public on US stock exchanges. It gives private companies more access to capital from various sources. It allows companies to buy back stock at a discounted rate without penalty. It discourages entrepreneurship and encourages big business monopolies. SUBMIT FOR GRADING

It makes it easier for certain companies to go public on US stock exchanges. It gives private companies more access to capital from various sources.

How is the JOBS Act helping to stimulate business? (Select all that apply.) It permits companies to sell securities through crowdfunding or the Internet. It offers easier registration for a public company under federal regulations. It allows businesses to claim bankruptcy and not have to pay taxes. It restricts companies on initial public offerings (IPOs) of their stock.

It permits companies to sell securities through crowdfunding or the Internet. It offers easier registration for a public company under federal regulations.

What is the primary function of the Federal Deposit Insurance Corporation? It provides consumers protection in case of a bank failure. It is the US central banking system and sets interest rates. It is a government agency responsible for tax collection. It is a government agency responsible for enforcing federal securities laws.

It provides consumers protection in case of a bank failure.

What effect does government regulation have on businesses? It gives businesses economic freedom so that they are able to make greater profits and employ more people. It takes away some economic freedom from businesses to ensure economic freedom for consumers. It increases the cost of production for businesses in the long term, but it does not impact them in the short term. It decreases production costs for businesses in exchange for them agreeing to lower their prices to consumers.

It takes away some economic freedom from businesses to ensure economic freedom for consumers.

One weakness of a free market economy is instability. Which argument would supporters of a free market economy most likely use to argue that instability is acceptable?

Market corrections are difficult but necessary. The benefits people receive from innovation and freedom in a free market system are worth the cost of instability.

How is a mixed market economy different from other economic systems?

People are free to choose and purchase goods and services based on their own wants and needs, while some government exists to protect the public.

Which is a description of scarcity?

People have limited resources, so they must pick which wants to satisfy.

In a free market economy, which is true regarding the role of the consumer?

The consumer determines what is produced.

Which is an example of the indirect role of government in the economy? The government provides a service that private businesses will not offer. The government passes laws that keep electricity rates affordable. The government has partial ownership in a business along with investors. The government competes with private business to ensure quality products.

The government passes laws that keep electricity rates affordable.

Which explains the US government's role in promoting competition? The government plays an active role in promoting competition at all levels. The government plays a role in promoting competition only at the state level. The government plays no role in promoting competition at any level. The government plays a role in promoting competition only at the local level.

The government plays an active role in promoting competition at all levels.

Why do economists need to find the answer to all three of the basic economic questions?

There are not enough resources to satisfy people's seemingly unlimited wants.

Which is an advantage of the sole proprietorship and partnership business models? They are both easy to start up. They are both difficult to start but easy to maintain. There is no personal liability with either type of business. There is no tax liability with either type of business.

They are both easy to start up.

What were some of the tasks of the Tennessee Valley Authority Act? (Select all that apply.) generate and provide hydroelectric power to the valley manufacture nitrates and phosphorus for creating fertilizer create roads and bridges in the valley pay the senator for allowing this to happen

generate and provide hydroelectric power to the valley manufacture nitrates and phosphorus for creating fertilizer

In a command economy, who answers the three fundamental economic questions?

government

Capitalism drives the constant rotation of business opportunity, _[blank]_, and failure. Which most accurately completes the sentence?

growth

Georgia wants to open her own business. She is looking for flexible hours, low overhead costs, and no need for a physical store with total control of the company. Which are her best options? (Select all that apply.) home-based business online business corporation franchise

home-based business online business

Which are considered services?

housecleaning serving food tailoring a suit

What economic theory was proposed by Adam Smith and explains that an economy's success is determined by people's ability to pursue their own financial self-interest?

invisible hand

Which are characteristics of a traditional market system? (Select all that apply.)

strong community network predominance of agriculture

An entrepreneur with the ability to motivate others in a collaborative environment that fosters team goals and work productivity has which qualities? strong leadership and vision competitive and persevering self-motivated and self-disciplined attuned to feedback and innovative

strong leadership and vision

What do the three basic economic questions determine?

the allocation of resources

What does macroeconomics deal with?

the economy as a whole

What does microeconomics deal with?

the impact of individual and business decisions on economic markets

What is the definition of economics?

the production, distribution, and consumption of goods and services in one country

Why did the US government establish the FDIC? to provide deposit insurance for banking customers to enforce tax laws and tax collection policies to protect investors from insider trading to stabilize prices, inflation, and interest rates SAVE/CHECK ANSWERS

to provide deposit insurance for banking customers

What is the primary role of producers in the marketplace?

to provide goods and services

What is specialization? when a business provides services that help communities when the market offers higher wages for more important jobs when the government offers military protection when an individual becomes an expert in a particular area

when an individual becomes an expert in a particular area

In which situation is the US government most likely to regulate the marketplace?

when business practices decrease competition

When would the government's response to a market failure be controversial? (Select all that apply.) when it chooses to redistribute income to different populations when it encourages businesses to hire veterans when it raises taxes to increase revenue for government programs when it encourages businesses to provide skills development for workers

when it chooses to redistribute income to different populations