Economics Final Review

Which statement is a correct analysis of the business cycles represented in the graph? (Value of Manufacturers' New Orders for Capital Goods: Nondefense Capital Goods Industries line graph) A. A decrease in the value of manufacturers' new orders for capital goods is an economic indicator of a recession. B. An increase in the value of the manufacturers' new orders for capital goods is an economic indicator of stagflation. C. The value of manufacturers' new orders for capital goods demonstrates an indication that the economy is at its peak. D. The value of manufacturers' new orders for capital goods demonstrates a consistent and stable growth in the economy.

A decrease in the value of manufacturers' new orders for capital goods is an economic indicator of a recession.

Which of the following reflects the information in the table? (Input Costs and Changes in Supply chart 4 columns) A. A rise in the cost of an input will cause a fall in supply. B. A rise in the cost of an input will cause an increase in supply. C. A decrease in the cost of an input will cause a decrease in supply. D. Increases and decreases in input costs do not affect supply.

A rise in the cost of an input will cause a fall in supply.

Your friend, a house painter, wants a digital camera, and he is considering trading his painting services in exchange for one. Why might he want to carefully consider this decision? A. Although it would be faster to trade for the camera, it might be difficult to complete the paint job in a timely manner, which could cause conflict. B. Although it would save him money to trade for the camera, it might be difficult to find someone who wants painting services and has a camera available. C. Although the warranty on the camera would be easily transferable, it might be difficult to explain why he is painting someone's house for free. D. Although he would be reducing waste by trading for a used camera, it might be difficult to provide painting services without receiving some monetary compensation.

Although it would save him money to trade for the camera, it might be difficult to find someone who wants painting services and has a camera available.

Based on an analysis of the info-graphic, why do changes in supply due to input costs affect the price of the products? A. As input costs rise for butter, supply goes up, which would result in lower prices for butter in order for companies to avoid tax penalties. B. As input costs rise for steel, supply goes down, which would result in higher prices for steel in order for companies to maintain profits. C. As input costs decrease for butter, supply goes down, which would result in lower prices for butter in order for companies to pay employee wages. D. As input costs decrease for steel, supply goes up, which would result in lower prices for steel in order for companies to pay dividends to shareholders.

As input costs rise for steel, supply goes down, which would result in higher prices for steel in order for companies to maintain profits.

What function does money serve to a person who is deciding where to buy a new bike? A. Bicycle stores have annual sales, which allow you to purchase an expensive bike for a reduced price. B. Bicycle stores carry different inventories, which allow you to buy the bicycle that best suits your needs. C. Bicycle stores mark the price in dollars, which allows you to comparison shop to find the best value. D. Bicycle stores accept a variety of payment options, which allows you to purchase the bike even if you don't have enough money.

Bicycle stores mark the price in dollars, which allows you to comparison shop to find the best value.

Analyzing the bar chart, what conclusions can you draw about the effect of exports on a country? (Top Five Exporting Nations 2013) A. Germany is one of the top exporters in the world, which most likely contributes to its classification as a developing nation. B. China is one of the top exporters in the world, which most likely contributes to its status as one of the world's most productive economies. C. The European Union is one of the top exporters in the world, which most likely contributes to its desire to raise protective tariffs for its trading partners. D. Japan is one of the top exporters in the world, which most likely contributes to its need to increase the amount of imports it purchases from other countries.

China is one of the top exporters in the world, which most likely contributes to its status as one of the world's most productive economies.

Based on an examination of the graph, which statement is an accurate evaluation of the government regulations against gender discrimination in the workforce? (Median Usual Weekly Earnings of Full-Time Wage and Salary Workers by Sex, Race, and Hispanic or Latino Ethnicity, 2012 Annual Averages bar graph) A. Government regulations limited the amount of men in the labor force; however,wages decreased for women. B. Despite government regulations, women still earn less than men. C. Government regulations had no impact on ending gender discrimination; however, Asian men and women earnings are now equal. D. Government regulations erased the wage gap between men and women.

Despite government regulations, women still earn less than men.

Which statement most accurately explains how financial institutions affect businesses? A. Financial institutions provide capital to businesses to support development. B. Financial institutions pass laws that require businesses to hire union workers. C. Financial institutions mandate the minimum wages businesses pay to their employees. D. Financial institutions raise interest rates on loans to businesses to increase the standard of living.

Financial institutions provide capital to businesses to support development.

Why does Francesca have an absolute advantage over Alexander in the production of sweaters and necklaces? (Productivity with Sweaters and Necklaces Per Hour chart) A. Francesca produced more goods than Alexander in the same amount of time. B. Francesca produced less goods than Alexander in the same amount of time. C. Francesca produced higher quality goods than Alexander in the same amount of time. D. Francesca produced a larger variety of goods than Alexander in the same amount of time.

Francesca produced more goods than Alexander in the same amount of time.

Which statement is an example of the restrictions that government places on the use of business property? A. Government controls how partners distribute profits at the end of each fiscal year. B. Government limits the number of workers that a single company can employ. C. Government passes zoning laws that designate certain areas for residential or business use. D. Government requires businesses to notify all employees when they plan to move to a new location.

Government passes zoning laws that designate certain areas for residential or business use.

If Jake decides to work for two more years to earn money instead of getting an advanced degree, what would be his opportunity cost, and why? A. His opportunity cost is the money he gains while working for another two years, because his decision to work will give him the money he needs for graduate school. B. His opportunity cost is the possibility that his parents will be angry with him for not pursuing his degree, because his decision to work will likely mean giving up on graduate school. C. His opportunity cost is the time he has to invest working for another two years, because his decision to work forced him to spend that two years working instead of going to school. D. His opportunity cost is the money he might have gained from having an advanced degree, because his decision to work forced him to give up or postpone the alternative option of graduate school.

His opportunity cost is the money he might have gained from having an advanced degree, because his decision to work forced him to give up or postpone the alternative option of graduate school.

Why were John Maynard Keynes's views on responding to economic downturns controversial in the context of the U.S. free enterprise system? A. His views of government spending to assist economic growth sharply contrasted with free market ideals, which emphasized less government intervention in the market. B. He argued in favor of a balanced budget amendment, which forced politicians to make difficult fiscal decisions. C. He supported an energetic monetary policy to control the money supply, which created massive fluctuations in the stock market. D. He suggested a "wait and see" attitude in addressing changes in the business cycle to allow the economy to recover on its own, which often prolonged economic downturns.

His views of government spending to assist economic growth sharply contrasted with free market ideals, which emphasized less government intervention in the market.

Look at the chart. Which scenario best reflects the income effect? (item and price chart) A. Ian responds to a rise in the price of clothes by cutting back on all of his purchases. B. Holly responds to a rise in the price of fruit by buying less fruit but more vegetables. C. Jed responds to an increase in the price of school lunches by feeling able to purchase more in other areas. D. Noemi responds to a rise in the price of food by increasing her purchases before further price increases.

Ian responds to a rise in the price of clothes by cutting back on all of his purchases.

Based on the information in the table, how do state taxes help residents afford college? (Comparing Private and Public Tuition, 2013-2014) A. If students go to an in-state public or community college, they pay a lower rate of tuition. B. If students go to an out-of-state public or community college, they pay a lower rate of tuition. C. If students go to an out-of-state private college, they pay a lower rate of tuition. D. If students go to an in-state private college, they pay a lower rate of tuition.

If students go to an in-state public or community college, they pay a lower rate of tuition.

Based on an examination of the chart, which statement explains a characteristic of partnerships in regard to personal liability? (Personal Liability in Partnerships chart) A. In the general partnership, both general partners pay $100,000 because they share personal liability equally. B. In the limited partnership, the limited partners each pay $50,000 because the general partner is exempt from personal liability. C. In the general partnership, one general partner pays $200,000 because the other general partner is exempt from personal liability. D. In the limited partnership, the general partner and the three limited partners each pay $50,000 because they share personal liability equally.

In the general partnership, both general partners pay $100,000 because they share personal liability equally.

"In 1890, Congress passed the Sherman Antitrust Act, which outlawed mergers and monopolies that limit trade between states." How did the legislation mentioned in the excerpt affect the operations of businesses in the United States? A. It increased the overall level of competition. B. It increased the barriers to entry for all new firms. C. It decreased the costs of production for new firms. D. It decreased the excess supply of goods in many markets.

It increased the overall level of competition.

How would the use of personal property affect the amount of taxes an individual was responsible for? A. It would reduce any possible tax deductions or credits. B. It would reduce their income tax burden. C. It would reduce the possibility of paying excise taxes. D. It would reduce their amount of property taxes.

It would reduce the possibility of paying excise taxes.

Which statement is a correct analysis of John Maynard Keynes's impact on the U.S. free enterprise system? A. Keynes argued against government intervention in the economy, and he discouraged economic leaders from taking action during economic downturns. B. Keynes believed that tax revenues would spur economic growth, and he suggested that lawmakers should pass laws that would increase taxes for all citizens. C. Keynes felt that modern economies could avoid long-lasting contractions, and he discouraged government spending programs that increased the national debt. D. Keynes supported the idea that government intervention was sometimes necessary to pull an economy out of a depression, and this idea shaped U.S. policies in the Great Depression.

Keynes supported the idea that government intervention was sometimes necessary to pull an economy out of a depression, and this idea shaped U.S. policies in the Great Depression.

Which post- Great Depression economic policies are best represented by the graphs above? (U.S. Economy Percent of National Income pie charts) A. Keynesian economics B. laissez-faire economics C. supply-side economics D. classical economics

Keynesian economics

Why might a financial planner encourage you to invest your money in mutual funds? A. Mutual funds distribute dividends at regular intervals throughout the year. B. Mutual funds provide the greatest possibility of return of any investment opportunity. C. Mutual funds allow for diversification in your portfolio without incurring extensive transaction fees. D. Mutual funds contribute a percentage of their profits to the government to offset the national debt.

Mutual funds allow for diversification in your portfolio without incurring extensive transaction fees.

How are markets with low barriers to entry and many firms most likely purely competitive? A. Large firms in these markets can affect the price of goods or services. B. New firms can enter these markets to provide substitute goods. C. Existing firms are unable to take advantage of economies of scale. D. Small firms in these markets are unable to affect the price of goods or services.

New firms can enter these markets to provide substitute goods.

Which of the following factors would likely result in the emergence of a monopolistically competitive market? A. New firms enter a market and provide close substitutes to existing products. B. Existing firms take advantage of economies of scale to lower costs. C. A few firms begin to dominate the market and set their own prices. D. Firms begin to drop out of a market because of the inability to compete.

New firms enter a market and provide close substitutes to existing products.

Which factor allows firms in an oligopoly to set their own prices? A. Only a few firms control the majority of the market. B. Each firm supplies a differentiated product. C. High barriers to entry keep competitors from entering the market. D. Government regulations allow such firms to set their own prices.

Only a few firms control the majority of the market.

Which statement is an accurate analysis of a disadvantage of partnerships? A. Partners struggle to obtain bank loans, limiting the amount of capital available for growth. B. Partners follow strict employment guidelines, making it difficult to hire skilled workers for their business. C. Partners file both joint and individual tax returns, increasing the overall amount of taxes paid by the company. D. Partners retain liability for the firm's debts, leaving them with the potential to lose everything, including personal assets.

Partners retain liability for the firm's debts, leaving them with the potential to lose everything, including personal assets.

"As a result, the prices that consumers pay and the revenue that suppliers receive accurately reflect how much the market values the inputs used to produce the product." The result described in the excerpt is a characteristic of which type of market? A. Purely competitive B. Oligopoly C. Monopolistically competitive D. Monopoly

Purely competitive

Based on the graphic, which statement best explains how Shawna's decision to save $5,000 contributed to capital formation? (How Saving Leads to Capital Formation chart) A. Shawna's savings provided the government with funds to buy new plants and equipment. B. Shawna's savings allowed her to purchase more goods for personal consumption. C. Shawna's savings ensured that she would have money available in case of an emergency. D. Shawna's savings supported business investments with money from mutual funds and loans from banks.

Shawna's savings supported business investments with money from mutual funds and loans from banks.

Which of the following countries has the freest market system? A. North Korea B. Singapore C. China D. United States

Singapore

Which statement correctly analyzes an advantage of sole proprietorships? A. Sole proprietorships retain liability for debts, providing financial freedom to the owner. B. Sole proprietorships require limited legal paperwork, making them simple and inexpensive to establish. C. Sole proprietorships qualify for exemptions from federal and state tax obligations, increasing profits for the owner. D. Sole proprietorships receive special treatment in regard to zoning laws, allowing owners to operate businesses in any location.

Sole proprietorships require limited legal paperwork, making them simple and inexpensive to establish.

Which statement correctly analyzes the relationship between technology and economic growth? A. Technological advancements play a minor role in promoting economic growth. B. Technological advancements increase efficiency and productivity, which in turn lead to economic growth. C. Technological advancements are funded solely by the government, and therefore reduce economic growth. D. Technological advancements limit private investment opportunities, and therefore slow down economic growth.

Technological advancements increase efficiency and productivity, which in turn lead to economic growth.

Upon analysis of the map, what conclusions can you make about the locations of the twelve Federal Reserve Districts shown by the colored areas? (US map divided into districts) A. The Federal Reserve Districts are disproportionate in size yet balanced in terms of economic strength. B. The Federal Reserve Districts are equally divided across the country to ensure fair access to loan services. C. The Federal Reserve Districts are generally reflective of the geographic concentration of banking activity in the country. D. The Federal Reserve Districts are representative of the government's plan to consolidate the banking industry.

The Federal Reserve Districts are generally reflective of the geographic concentration of banking activity in the country.

Which statement most accurately represents the direct role of the Federal Reserve in this diagram? (Money Supply Diagram) A. The Federal Reserve controls the money supply. B. The Federal Reserve makes loans to business owners. C. The Federal Reserve regulates the rate of interests in loans. D. The Federal Reserve provides direct cash withdrawals to individuals.

The Federal Reserve controls the money supply

"Over the past five years, the Federal Reserve has acted to support economic growth and foster job creation, and it is important to achieve further progress, particularly in the labor market. Taking due account of the uncertainties and limits of its policy tools, the Federal Reserve will provide additional policy accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability." —Chairman Ben Bernanke, August 2012 Based on analysis of the excerpt, what conclusion can you draw about the role of the Federal Reserve in response to the Great Recession? A. The Federal Reserve allowed Congress to take the lead on fixing the economy while focusing on tax reform and regulation. B. The Federal Reserve promoted economic growth by controlling interest rates while taking into consideration concerns about inflation. C. The Federal Reserve prevented the government from passing new job legislation while encouraging employment opportunities in the private sector. D. The Federal Reserve supported an increase of foreign trade to help business development while ensuring that industrial production jobs stayed in the United States.

The Federal Reserve promoted economic growth by controlling interest rates while taking into consideration concerns about inflation

How does the World Bank encourage the establishment of free enterprise systems around the world? A. The World Bank works with the United Nations Development Programmer to support humanitarian causes, to stop civil wars, and to encourage foreign investment. B. The World Bank works with developing countries to increase government control of industry, to acquire loans from foreign countries, and to support central planning. C. The World Bank works with the United Nations Development Programmer to set international exchange rates, to stabilize currency, and to increase the standard of living. D. The World Bank works with developing countries to reduce government intervention, to limit restrictions on private business ownership, and to promote economic diversification.

The World Bank works with developing countries to reduce government intervention, to limit restrictions on private business ownership, and to promote economic diversification.

"North American Free Trade Agreement On January 1, 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force. All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008. NAFTA created the world's largest free trade area, which now links 450 million people producing $17 trillion worth of goods and services. From 1993 to 2006, trade among the NAFTA nations climbed 198 percent, from $297 billion to $883 billion." Considering this excerpt, which statement would best justify participation in the North American Free Trade Agreement? A. The agreement established stricter regulations, which protected domestic industries. B. The agreement created higher import and export taxes, which supported industrial growth. C. The agreement expanded trade substantially between the nations, which increased the production of goods and services. D. The agreement reduced the number of businesses involved in trade, which increased government revenues.

The agreement expanded trade substantially between the nations, which increased the production of goods and services.

Based on an examination of the graph, what conclusions can be drawn regarding the production possibilities of corn and jeans? (Production Possibilities Curve line graph 2 lines) A. The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic growth. B. The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic growth. C. The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic decline. D. The blue curve indicates a decrease in the capacity to produce both corn and jeans, resulting in economic decline.

The blue curve indicates an increase in the capacity to produce both corn and jeans, resulting in economic growth.

Which statement provides the best interpretation of the inflation data presented in the graph? (Inflation Rate, 1970-2012 line graph) A. The change in inflation rates from 1970 to 2010 demonstrates the stable purchasing power of money. B. The change in inflation rates from 1979 to 1986 represents an increase in the consumer price index. C. The change in inflation rates from 1992 to 2010 reflects a more stable economy than the change from 1970 to 1992. D. The change in inflation rates from 1975 to 1979 indicates that the overall costs of goods and services decreased.

The change in inflation rates from 1992 to 2010 reflects a more stable economy than the change from 1970 to 1992.

Why would the owner of a corporate farm need to consider location in choosing which crops to grow? A. The kinds of dwellings are factors of production that would determine which crops would be successful. B. The climate and type of soil are factors of production that would determine which crops would be successful. C. The types of small businesses are factors of production that would determine which crops would be successful. D. The local laws and ordinances are factors of production that would determine which crops would be successful.

The climate and type of soil are factors of production that would determine which crops would be successful.

Why is the object in this photo an example of commodity money? (gold coin) A. The coin is representative of currency in a barter system. B. The coin is used to purchase goods from other countries. C. The coin is valuable separate from its use as a method of exchange. D. The coin is a commemoration of early contributions to the monetary system.

The coin is valuable separate from its use as a method of exchange.

If a country is highly efficient at producing a variety of goods, how would you help them decide which goods they should produce? A. The country should produce the goods that are rarely found in other countries based on the concept of comparative advantage. B. The country should produce the goods that are in high demand in other countries based on the concept of comparative advantage. C. The country should produce goods that are better quality than those found in other countries based on the concept of comparative advantage. D. The country should produce the goods that they can sell at a lower price than other countries based on the concept of comparative advantage.

The country should produce the goods that they can sell at a lower price than other countries based on the concept of comparative advantage.

How would the federal government's spending be affected by record profits in leading corporate industries? A. The federal government would spend a lower percentage of its revenue on discretionary programs. B. The federal government would spend a higher percentage of its revenue on mandatory programs. C. The federal government would be able to fund new or existing discretionary programs. D. The federal government would be required to increase spending on mandatory programs.

The federal government would be able to fund new or existing discretionary programs.

What is the result of one firm controlling an entire market? A. The firm is able to keep out competitors by keeping entry costs high. B. The firm is able to control regulation of its industry. C. The firm is able to control demand for the products it offers. D. The firm is able to set prices in a noncompetitive manner.

The firm is able to set prices in a noncompetitive manner.

Which of the following would represent a government imposing a price ceiling in the rental housing market? A. The government encourages tenants to buy rental insurance in order to be prepared in case of housing emergencies. B. The government limits the amount of rent that a landlord can charge in order to maintain reasonable housing prices. C. The government requires landlords to submit detailed paperwork on the cost of each of their rentals in order to monitor housing costs. D. The government forces cities to designate a fixed number of rental units in order to ensure that there is enough housing available for its residents.

The government limits the amount of rent that a landlord can charge in order to maintain reasonable housing prices.

Which statement accurately evaluates the purpose of laws governing the disposal of hazardous waste? (The Resource Conservation and Recovery Act) A. The laws support an increase in the production of hazardous waste, which reduces the likelihood of healthful conditions. B. The laws require businesses to build factories in highly populated areas, which increases conflict with local citizens. C. The laws encourage conservation of natural resources and reduction in hazardous waste production, which acts to protect the environment. D. The laws require the government to dispose of hazardous waste produced by private companies, which can decrease taxes for all citizens.

The laws encourage conservation of natural resources and reduction in hazardous waste production, which acts to protect the environment.

Why would a study of economics necessarily include the problems of scarcity and choice? A. The study of economics should include scarcity and choice because these problems exist in all societies regardless of their level of poverty or wealth. The study of these problems shows how people seek to satisfy their needs and wants by making choices about their limited resources. B. The study of economics should include scarcity and choice because these problems exist in industrialized societies, especially the wealthiest ones. The study of these problems shows the origins of human social behavior, and the development and organization of economic institutions. C. The study of economics should include scarcity and choice because these problems exist in the world's poorest societies, especially non-industrialized ones. The study of these problems helps economists build upon knowledge from other social sciences to understand how to alleviate world poverty. D. The study of economics should include scarcity and choice because these problems exist in a majority of societies, especially among the richest and poorest peoples. The study of these problems shows how oppression has become the norm throughout the world while the wealthiest people try to control a majority of the resources.

The study of economics should include scarcity and choice because these problems exist in all societies regardless of their level of poverty or wealth. The study of these problems shows how people seek to satisfy their needs and wants by making choices about their limited resources.

Why is there controversy around the use of a single currency, the euro, by the European Union's Member States? A. The use of the euro expands the role of governments in the economy, but individual citizens must pay higher taxes. B. The use of the euro increases industrial profits for all members of the European Union, but governments must pass laws to redistribute the earnings equally. C. The use of the euro reduces conflict amongst the members of the European Union, but countries must contribute membership fees to use the currency throughout Europe. D. The use of the euro makes movement of goods and people more efficient, but economic downturns in one country may depreciate the euro even if the economies of other countries are healthy.

The use of the euro makes movement of goods and people more efficient, but economic downturns in one country may depreciate the euro even if the economies of other countries are healthy.

When the price of an online movie subscription rises from $10 to $30 per month, what is a likely result? A. There will be an increase in overall profits. B. There will be an increase in employee wages. C. There will be a decrease in the number of subscribers. D. There will be a decrease in the number of movies available.

There will be a decrease in the number of subscribers.

Which conclusion about sales and excise taxes is supported by the graph? (Family Income bar graph) A. They follow a regressive pattern. B. They follow a proportional pattern. C. They follow a progressive pattern. D. They follow a constant pattern.

They follow a regressive pattern.

In the neighborhood of Maximo Jerez, located in Managua, Nicaragua, citizens only have water from 2 a.m. to 7 p.m. After Hurricane Sandy, much of the Northeast region of the United States was left without electricity. How do these examples illustrate the same economic principle? A. They illustrate the problem of capital, because both cities were without a needed resource and needed funding to purchase more. B. They illustrate the problem of needs versus wants, because the Nicaraguans need water, but electricity is just a want for Americans. C. They illustrate the problem of resource management, because the water needs to be rationed in Nicaragua and controlled during the storm in the United States. D. They illustrate that scarcity is a problem everywhere in the world, because both poor and wealthy societies can still have issues of limited resources.

They illustrate that scarcity is a problem everywhere in the world, because both poor and wealthy societies can still have issues of limited resources.

Which statement provides a correct analysis of how trade deficits support economic growth? A. They increase the debt owed to other countries. B. They often include goods used only for short-term consumption. C. They often include investment goods that promote new industries. D. They force countries to rely on other nations for goods and services.

They often include goods used only for short-term consumption.

"People who drive pay gasoline taxes that are used to build and maintain highways." Which statement accurately reflects the costs and benefits of using a system of taxation as described in the quote? A. This tax system benefits those who don't use cars or highways and costs those who wish to use them. B. This tax system benefits those who earn less and costs those who earn more. C. This tax system benefits those who are retired and costs those still working. D. This tax system benefits those who don't use public transportation and costs those who use it.

This tax system benefits those who don't use cars or highways and costs those who wish to use them

Sec. 2. "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof; shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court." Sec. 7. "Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee." Sec. 8. "That the word 'person,' or 'persons,' wherever used in this Act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country." Based on the excerpts, which statement evaluates the impact of anti-trust legislation on the establishment of trusts from a balanced perspective? A. Trusts were outlawed because they had harmed other businesses. B. Trusts were outlawed, but corporations continue to evade the law and establish them. C. Trusts were outlawed because they had bribed the U.S. Court system. D. Trusts were outlawed in order to protect domestic producers at the expense of exporters.

Trusts were outlawed because they had harmed other businesses.

Why does a relationship exist between individual investment choices and economic growth? A. When people purchase treasury bonds, the government limits their federal tax burden, which leads to economic growth. B. When people acquire life insurance plans, the beneficiaries receive ongoing payments, which leads to economic growth. C. When people buy corporate stocks, the corporation uses the capital to expand production, which leads to economic growth. D. When people open savings accounts, the banks reduce the number of loans available to consumers, which leads to economic growth.

When people buy corporate stocks, the corporation uses the capital to expand production, which leads to economic growth.

Why would a government most likely be able to influence the production possibilities curve in a free market economy? A. because government policy can affect the costs of production B. because governments tax profits on manufacturers C. because governments control the factors of production D. because governments can influence the demand for any given product

because government policy can affect the costs of production

"A bond is a debt obligation, like an IOU. Investors who buy corporate bonds are lending money to the company issuing the bond. In return, the company makes a legal commitment to pay interest on the principal and, in most cases, to return the principal when the bond comes due, or matures." Based on the excerpt, why would bonds issued by a company with a promising new product be attractive to an investor? A. because the investor will make money on the per-item sale of the new product B. because the investor will gain ownership in the company C. because the investor stands to profit from the interest on the bond D. because the investor can get the cost of the bond returned at any time

because the investor stands to profit from the interest on the bond

"When you raise the price of employment, guess what happens? You get less of it." —John Boehner, Speaker of the House of Representatives, February 2013 The speaker would argue against a minimum wage because it A. decreases the demand for workers. B. increases the equilibrium wage rate. C. sets minimum wages below the equilibrium rate. D. decreases the supply of workers.

decreases the demand for workers.

The rights of free contract and voluntary exchange best reflect which goal? A. economic freedom B. efficiency C. equity D. legal equality

economic freedom

As the photograph indicates, businesses and consumers are increasingly making use of technology. What economic goal does this best reflect? (Amazon.com on tablet best sellers) A. equity B. security C. efficiency D. freedom

efficiency

The points on the production possibilities frontier in this chart all represent (Product Possibilities Curve line graph 1 line) A. opportunity costs. B. under utilization of resources. C. efficient use of resources. D. two different types of resources.

efficient use of resources.

How a society answers the three basic economic questions shapes people's A. freedom of choice. B. exposure to scarcity. C. contributions to national defense. D. liking for consumer goods.

freedom of choice.

The photograph best represents the use of (car assembly line) A. entrepreneurship. B. human capital. C. cost/benefit analysis. D. physical capital.

physical capital.

The cartoon illustrates how the U.S. Constitution protects and regulates (truck with gingerbread house on top being taken away by Willy Wonka) A. taxation. B. freedom of movement. C. intellectual property. D. property rights.

property rights.

"Investing in infrastructure not only makes our roads, bridges, and ports safer and allows our businesses and workers to be as competitive as they need to be in the global economy, it also creates thousands of good American jobs that cannot be outsourced." —White House Press Release The quotation most directly argues for the importance of A. public goods. B. the free market. C. central planning. D. economic freedom.

public goods.

Which of the following services might be reduced if local property taxes were reduced? A. public transportation B. interstate highways C. Social Security D. U.S. military

public transportation

"Government spending has become so extensive that it contributes to the economic problems it was designed to cure. More government intervention in the economy cannot possibly be a solution to our economic problems." —Ronald Reagan, White House Report on the Program for Economic Recovery, 1981 What policies did this belief lead President Reagan to implement? A. supply-side economics B. Keynesian economics C. demand-side economics D. macroeconomic policies

supply-side economics

Why does the rising cost of headphones provide an incentive for companies to produce headphones? A. It is a sign that if the company sold the product, there would be an increase in profits. B. It is a sign that if the company sold the product, there would be an expansion of the workforce. C. It is a sign that if the company sold the product, there would be a reduction of federal tax obligations. D. It is a sign that if the company sold the product, there would be a decrease in government regulations.

t is a sign that if the company sold the product, there would be an increase in profits.

To which economic indicator is monetary policy most directly related? A. the interest rate spread between Treasury bonds and the federal funds rate B. average weekly hours, manufacturing C. manufacturer's new orders for consumer goods and materials D. stock prices, 500 common stocks

the interest rate spread between Treasury bonds and the federal funds rate

Increasing government spending to stimulate growth is made difficult by the reality of entitlements because A. they leave only a small part of the budget available for changes in spending. B. they leave such a wide area in which to make spending decisions. C. entitlement payments change from year to year, making other decisions difficult. D. entitlement spending decisions come last in the budget process.

they leave only a small part of the budget available for changes in spending.

Which of the following is a way the federal government spends taxes in a mandatory manner? A. to provide unemployment benefits B. to provide for public education C. to provide retirement benefits D. to provide for the national defense

to provide retirement benefits