Econ
These institutions practice pooling the savings of many individuals and investing that money in a variety of stocks, bonds, and other financial assets. -Life Insurance -Mutual Funds -Pension Funds -Banks, Savings & Loans, and Credit Unions -Finance Companies
Mutual Funds
These institutions take deposits from savers then lend out some of the funds to businesses and individuals. -Banks, Savings & Loans, and Credit Unions -Pension Funds -Life Insurance -Finance Companies -Mutual Funds
Banks, Savings & Loans, and Credit Unions
Which of the following best describes collective bargaining? -Union members vote on what kind of fringe benefits they want before they strike. -This is a situation where the company disallows workers from coming to work because of a dispute. -It is an organization of laborers representing various trade jobs. -A labor union's representatives and a company's representatives meet to negotiate a labor contract for workers at the company.
A labor union's representatives and a company's representatives meet to negotiate a labor contract for workers at the company.
Measurement of the types of goods consumers purchase is a key indicator of the direction of a nation's economy. Which of the following is known as a consumer nondurable good? -new microwave -a new car -college textbook -electronic audio and visual equipment
college textbook
Nations, including the United States, have established trade policies at different times to protect young, infant industries as they begin to grow. Which of the following is not a trade barrier? -tariff -free-trade agreement -customs duty -quota limits
free-trade agreement
"Duty-free" shops in airports and on ships in international waters sell merchandise that can be brought into the country without which of the following barriers to trade? -restrictions on resale -import tariffs -restrictions on quantity -political embargoes
import tariffs
If people's salaries increase, their willingness and ability to purchase an item at a given price will also increase. What is this non-price determinant of demand called? -changes in technology -income effect -consumer tastes and preferences -substitution effect
income effect
What is the basic economic concept that says the more and more you consume of a good, the less and less satisfaction you will receive? -law of supply -law of supply -law of shifting demand -law of diminishing marginal utility
law of diminishing marginal utility
Which of the following types of corporations is a special type that does not distribute its surplus funds to stockholders, instead uses the funds to pursue its goals, such as charitable organizations. -conglomerate -cooperative -non-profit organization -limited liability corporation
non-profit organization
Your family likes to use the orange juice to make breakfast smoothies every morning. You were sent to the store to buy more orange juice, but the store is out of orange juice. You decide to purchase mango juice instead. This is an example of a/an... -complementary good. -shift in supply and demand. -substitute good. -surplus of orange juice.
substitute good.
Which of the following could help a country move its production possibilities curve outward (shift to the right)? -closing down 20% of the nation's universities -fighting a war -technological innovations make production across all industries more efficient -a large migration of immigrants out of the country
technological innovations make production across all industries more efficient
Use the headlines below to help you answer the question that follows: The headlines above highlight the effect that ___?___ has/have upon shifting supply or demand. HEADLINES: TECHNOPHILES RUSH TO BE THE FIRST TO GET GOOGLE GLASSES ADVANCES IN ROBOTICS PREDICTED TO DRAMATICALLY IMPACT SPEED AND EFFICIENCY IN AUTOMOBILE INDUSTRY WILL CYBORG TECHNOLOGY REPLACE CLOUD TECHNOLOGY IN THE UPCOMING DECADE? -complementary and substitute goods -technology and technological innovation -elasticity of price -diminishing marginal utility
technology and technological innovation
Let's assume that Bolivia is one of five countries in the world that has lithium deposits. What would it take for Bolivia to have a comparative advantage on the world lithium market? -Bolivia would have to move all of its factors of production to the mining of lithium. -Bolivia would have to have lower costs in bringing together the factors of production and distribution of lithium than other nations. -Bolivia must produce lithium for export only. -Bolivia's politicians should work towards driving down the price of lithium on the world market.
Bolivia would have to have lower costs in bringing together the factors of production and distribution of lithium than other nations.
Money market mutual funds generally have a higher risk than savings accounts because mutual funds -must be held for a five-year minimum. -are not insured by the Federal Deposit Insurance Corporation. -are not protected by any federal regulations. -cannot earn a fixed interest rate.
are not insured by the Federal Deposit Insurance Corporation.
Unemployment rates are one of the key economic indicators of a nation's financial health. Which of the following is the main difference between seasonal unemployment and structural unemployment? -Seasonal unemployment seldom occurs in the U.S., while structural unemployment is very common. -Seasonal unemployment occurs only in the summer, but structural unemployment can occur year-round. -Seasonal unemployment occurs because of labor demand changes during a year, whereas structural occurs because the workers lack skills. -Seasonal unemployment usually hits the highest-paid American workers, while structural unemployment hits the middle class hardest.
Seasonal unemployment occurs because of labor demand changes during a year, whereas structural occurs because the workers lack skills.
When the selling price of a service or good increases, what is the relationship to the quantity demanded? -The quantity supplied will decrease. -There is no relationship between the two. -The quantity demanded will decrease. -The costs of production goes up.
The quantity demanded will decrease.
When entrepreneurs in the United States choose to design and produce automobiles in Michigan, U.S.A. for sale overseas, how is the U.S. GDP affected? -U.S. automobile production does not affect the value of the GDP. -The value of the American-made cars sold on the foreign market is subtracted from the U.S. GDP. -The value of the American-made cars sold on the foreign market is added to the U.S. GDP. -The balance of trade between the U.S. and foreign countries becomes a deficit.
The value of the American-made cars sold on the foreign market is added to the U.S. GDP.
What economic problem is created as a result of scarcity? -All of These -People must make trade offs for each economic decision. -People have unlimited wants and limited resources so they must make choices. -When trade offs are made, the decision results in opportunity costs. -None of these.
all of these
If Bolivia is the only country in the western hemisphere that can produce highly-demanded lithium from its mines, Bolivia's producers have -an absolute advantage in lithium production. -the highest costs of production. -a command economy. -a comparative advantage in purchasing cell phones.
an absolute advantage in lithium production.
Which of the following would be the best example of fiat money? -a conch shell -gold coins -a U.S. one dollar bill -an ounce of platinum
a U.S. one dollar bill
The highest point in a nation's cycle of economic expansion is called a -peak. -trough. -recession. -equilibrium level.
peak
What is one monopoly that the U.S. government has traditionally permitted in modern times? -soft drinks -oil and gas -professional sports leagues -cellular phone service
professional sports leagues
Which of the following is a major difference between corporations and other kinds of business structures? -Corporations exist as a separate entity (body) apart from its owners. -Corporations have no liability for debts if they fail in the market. -Corporations are always larger than other kinds of businesses. -Corporations have officers who are responsible for running the business.
Corporations exist as a separate entity (body) apart from its owners.
Choose the letter of the economic system row in the table below that best describes the characteristics of communism. A ~Property Rights private ownership of property ~Economic Freedom individuals have freedom to decide what to produce, how much to produce, and for whom to produce ~Economic Incentives people can work hard and earn greater profit for their labor based on their own self-interest ~Competition economic competition is a key part of market decisions ~Role of Government government's role is limited based on the principle of laissez faire B ~Property Rights public ownership of property ~Economic Freedom government makes most of the economic decisions for the good of the people ~Economic Incentives all people are equally given what the government determines they need regardless of their effort ~Competition the government owns all production facilities so there is little legal competition ~Role of Government government plays a large role in the economy as it serves as the voice of the people C ~Property Rights public and private ownership of property ~Economic Freedom individuals have some economic freedom but governments play key roles in economic decisions ~Economic Incentives each person is given what they need based upon their how much labor they provide society ~Competition government encourages workers to cooperate with one another to achieve economic goals ~Role of Government government moderates the economy in order to shrink the differences between the rich and poor
B
Which of the following is a major disadvantage to using import barriers to make domestic (American) goods cheaper? -The jobs offered by American companies will help foreign workers more than American workers. -The American firms will merge with foreign firms in order to grab their profits. -Foreign manufacturers will flood the American market with even more products. -The American manufacturers are likely to lose the incentive to produce efficiently and prices will rise.
The American manufacturers are likely to lose the incentive to produce efficiently and prices will rise.
Which of the following does NOT describe an effect of modern technological advancements on the economic growth of a nation? -The costs of production will rise sharply for an extended time across the nation. -Productivity will increase nationally. -Entrepreneurs have easier access bringing new goods and services to markets. -New innovations create sales and profits that will increase the national GDP.
The costs of production will rise sharply for an extended time across the nation.
If the United States government gives a foreign country most-favored nation (MFN) status, what does that mean? -The country has special copyright and licensing agreements with U.S. corporations. -The country's products have all been designated safe for the U.S. markets. -The country pays the low tariffs as those paid by all MFN nations. -The country is free from all tariffs in the United States.
The country pays the low tariffs as those paid by all MFN nations.
Select the statement that would be the most accurate economic analysis of the following governmental actions: Sherman Anti-Trust Act outlaws unfair competition (1890) 16th Amendment creates the Federal Income Tax (1913) Social Security Act provides income assitance for the elderly (1935) Medicare and Medicaid provides medical care for elderly and poor (1965) Bailout of US car companies cost US taxpayer 2.9 billion (2009) -The government has increased its economic involvement in the market economy. -The government has allowed the economy to grow unchecked until the last ten years. -The "invisible hand" of self-interest has led more and more Americans to off-shore parts of production to other nations. -A laissez-faire economic policy has reversed unfair business practices of large businesses in the past 100 years.
The government has increased its economic involvement in the market economy.
In a market characterized by monopolistic competition, firms often use non-price competition to increase sales. Which of the following is NOT a form of non-price competition? -discounts -advertising -physical appearance and image of the product -unique website presence
discounts
The measure of a country's development that is best for comparing standards of living and wealth between people of different countries is -number of adults with a high school education or higher. -average life expectancy. -gross domestic product per capita. -gross domestic product.
gross domestic product per capita
Economics is the study of -how the people make political decisions that impact the government. -the history of the American people's path to independence. -how people live together and interact in groups. -how people use scarce resources to fulfill their wants and needs.
how people use scarce resources to fulfill their wants and needs.
Which of the following pairs would be considered to be an example of complementary goods? -Cafe Mocha Latte; Green Tea Smoothie -iPod; Songs Downloaded from iTunes -Account -Car; Bus Service -Peanut Butter; Almond Butter
iPod; Songs Downloaded from iTunes Account
What is the name/acronym of the international organization formed to stabilize international exchange rates and to facilitate development of nations? -UNESCO -NAFTA -IMF -EEOC
IMP
What type of economy best matches this description in how it answers the basic economic questions? Most of the basic economic decisions are made based on the producer and consumer's self-interest. Producers decide what goods and services that they are willing and able to produce and they seek to produce those goods in efficient ways that maximize their profits. Consumers determine how the goods and services are distributed because they seek to purchase goods that have the highest quality or value at the lowest price. -Command Economy -Mixed Economy -Market Economy -Traditional Economy
Market Economy
What does the Federal Deposit Insurance Corporation (FDIC) have to do with banks and your money? -acts as an intermediary between the Fed and commercial banks for check clearing -makes sure that banks charge the same interest rate on personal loans -makes sure that no banks are allowed to fail in the USA -makes sure that bank customers do not lose their money if a bank fails
makes sure that bank customers do not lose their money if a bank fails
What would happen to prices of goods in the United States if Congress established major limits and restrictions on imported goods? -There would be no effect on supply nor prices. -Prices would rise. -Prices would rise steeply and then drop. -Prices would fall.
Prices would rise.
Currently, who are the top two trading partners of the United States, measured in total value of all goods exchanged? -Saudi Arabia and Russia -Germany and Japan -Canada and China -Germany and Great Britain
Canada and China
The nation of Economica's economic indicators over the past half year have reported that the economy has: a growing Gross Domestic Product (GDP), low unemployment rates, and increasing tax revenues. Based on these indicators, what is most likely to be true for Economica's current business cycle? -Prices are rising causing people to buy fewer goods. -Many people in the nation are unable to find jobs that allow them to earn a living in a contractionary period. -Economica is in an expansionary period with increasing production, which will result in a higher standard of living for many of its people. -Economica's economy is becoming unstable and is at risk of recession.
Economica is in an expansionary period with increasing production, which will result in a higher standard of living for many of its people.
Which of the following best describes the market structure known as an oligopoly? -a market with only a few business firms controlling the majority of the market's production -many business participating in the market's production -one business firm controlling 95 percent of a market's production -3-4 states in the U.S. consuming 90 percent of a good or service in the market
a market with only a few business firms controlling the majority of the market's production
Which economic system could best be described most likely have the following characteristics: lack of competition in the market constant government involvement in the economy very little economic freedom and building wealth is discouraged complete government control of production and distribution of goods -socialism -communism -free enterprise -free market
communism
If we analyze the production of a person, firm, or nation on a production possibilities graph, and we find them producing along the production possibilities curve or frontier, how would you best describe that economy? -having complete economic freedom -under-utilizing its scarce resources -efficiently using its scarce resources -communist or socialist
efficiently using its scarce resources
The concept that with the purchase of more and more of a good, the less satisfaction you will receive with each on is called -law of supply. -equilibrium price. -law of diminishing marginal utility. -law of demand.
law of diminishing marginal utility.
Which of the following best describes monopolistic competition? -one business firm selling an identical product under different names -one business firm using its size and strength to keep competitors out of the market -many business firms selling similar but not identical products or services -very few business firms selling identical products or services
many business firms selling similar but not identical products or services
The Federal government's Equal Employment Opportunity Commission handles worker complaints about which of the following kinds of discrimination? -race, sex, nationality, religion, or disability -disability and religion only -race only l-imited to race and color discrimination
race, sex, nationality, religion, or disability
The investment strategy of diversification is often recommended because diversification -reduces overall risk on your investments. -demonstrates the most uneven rate of return on your investments. -guarantees a fixed rate of return on your investments. -protects your investments from inflation.
reduces overall risk on your investments.
The main advantage of diversification as an investment policy is that it -reduces risk to investors. -offsets the effects of inflation on investments. -guarantees a fixed rate of return on an investment. -increases investors" access to their money.
reduces risk to investors
Adam Smith, the Father of Modern Economics, stated that all economic decisions in a market economy were regulated by an "invisible hand" of ... -laissez-faire and communism. -capitalism and tradition. -inefficiency and market inequalities. -self-interest and competition.
self-interest and competition
As a teenager, Frank discovered that he loved to cook. After attending culinary school, he borrowed money from the bank to get his business start-up funds that he used to open a small restaurant. He is personally liable to pay the bank back. If the business goes under Frank could personally lose his house and car if he defaults on the loan. Based on this description, what type of business structure is Frank's business? -conglomerate -corporation -limited liability partnership -sole proprietorship
sole proprietorship
Savings bonds differ from most other bonds in that -they are held for a shorter time. -the buyer does not receive periodic interest payments in exchange for a lower purchase price. -they provide a higher rate of return. -they are issued in fairly large denominations in exchange for a lower purchase price.
the buyer does not receive periodic interest payments in exchange for a lower purchase price.
Which of the following best describes gross domestic product (a nation's GDP)? -the value of all shares of stock traded on the NYSE for one year -the value of all deposits in a nation's financial institutions -the total value of all capital goods produced by a nation's citizens -the total value of all goods and services produced within a nation's territory during a given year
the total value of all goods and services produced within a nation's territory during a given year
When you give up a movie date night in order to prepare for the SAT, the missed movie date is known as a/an ___?___ in economics. -trade-off -asset -dividend -free-rider
trade-off
Which of the following is likely to be the result in a nation with a very low unemployment rate, hovering between 1 and 2 percent? -The Consumer Price Index will naturally become lower. -Companies will have problems hiring enough workers with the skill set they need. -The unemployed people will stop looking for jobs. -Average wages will drop close to the minimum wage.
Companies will have problems hiring enough workers with the skill set they need.
What is the concept of demand elasticity? TEKS 2A -Demand elasticity illustrates the concept that the more consumers buy, the less they will demand of it later. -Demand elasticity is how responsive consumers are to changes in price. -Demand elasticity describes the situation in which the more you consume, the less satisfaction you gain.
Demand elasticity is how responsive consumers are to changes in price.
In which economic system would an individual be more likely to invest their own money to open a hamburger franchise with the hope of earning enough profit to purchase their own home? -Market, Communist and Free Enterprise -Communist Economy -Free Enterprise Economy -Capitalist Economy -Market, Capitalist and Free Enterprise -Market Economy
Market, Capitalist and Free Enterprise
Which of the following is a treaty to eliminate all trade barriers between the nations of the United States, Canada, and Mexico? -UNESCO -NAFTA -SEATO -OPEC
NAFTA
Which of the following is an advantage of a partnership structure over the sole proprietorshipbusiness structure? -Partnerships always sell stock in the company, helping it grow faster. -Sole proprietorships generally have more access to financial capital. -Partnerships enable individuals to pool together more factors of production for growth. -Partnerships are usually bigger, so they have more business taxes to pay.
Partnerships enable individuals to pool together more factors of production for growth
Which statement would best explain why free enterprise economies tend to have a higher standard of living? -The government regulates the economy and provides services to keep the economy growing. -Private ownership of property, businesses, and the factors of production allow individuals to build their personal wealth. -Free enterprise economies tend to have many competing businesses. -The government bails out entrepreneurs when their business ideas fail.
Private ownership of property, businesses, and the factors of production allow individuals to build their personal wealth.
According to the cost-push theory, what is responsible for inflation? -Customer demand is steady and stable. -Producers raise prices of goods and services they sell to meet increased costs. -Demand for goods and services exceeds existing supply. -Too much money is in circulation.
Producers raise prices of goods and services they sell to meet increased costs.
Why does the U.S. government give monopolistic power to companies by issuing patents, copyrights, and trademarks? -The company makes the best product on the market. -The U.S. government promotes the incentives of profit so that business firms can gain for their research and efforts. -The U.S. government stands against competition in financial markets. -The government pays the company for each patent.
The U.S. government promotes the incentives of profit so that business firms can gain for their research and efforts.
If the average price of a hot dog in America increases substantially, but hamburgers stay relatively the same, what will happen to the demand curve for hamburgers? -The demand curve for hamburgers is likely to shift to the left. -The demand curve for hamburgers is likely to shift to the right. -Suppliers will be willing and able to produce less hot dogs. -Hot dogs are demand inelastic, so hamburger demand will remain the same.
The demand curve for hamburgers is likely to shift to the right.
Which of the following characteristics does NOT describe pure competition (perfect competition)? -There is easy access for sellers to enter and exit the market. -Many sellers and buyers are participating in the market. -The sellers are offering a wide variety of different products. -The buyers and sellers are well informed about the products or services.
The sellers are offering a wide variety of different products.
What do the Sherman Antitrust Act, Clayton Act, and the Federal Trade Commission Act have in common? -These are state laws that regulate business in America. -These laws were all created to restrict the sale of stocks and bonds to foreign investors. -These are federal laws that require all large corporations to have a labor union for their employees. -These are federal laws designed to limit unfair business practices that could reduce competition and create illegal monopolies.
These are federal laws designed to limit unfair business practices that could reduce competition and create illegal monopolies.
What type of economy best matches this description in how it answers the basic economic questions? The society produces what they have always produced. The society usually produces it in the same way as their ancestors. The society's members generally work in the same industries as their parents and grandparents. The goods and services that are produced are usually shared with the community. Hunting and agriculture are often the primary industries in this type of economy. -Traditional Economies -Mixed Economies -Market Economies -Command Economies
Traditional Economies
The largest provider of development assistance for less-developed nations and regions in the world is the -International Monetary Fund. -World Bank. -U.S. government. -UNESCO.
World Bank.
Assume you buy 1000 shares of common stock in Xerox Corporation; what does this mean? -You will make at least $1000 in dividends each year from Xerox. -You are a shareholder in the ownership of Xerox. -You have 10 votes in all decisions made at Xerox. -You will receive $1000 for each share of stock you own.
You are a shareholder in the ownership of Xerox.
An example of equity is -a share of stock. -a corporate bond. -a treasury bill. -a short-term certificate of deposit.
a share of stock
What is the economics term to describe when a nation's people import more goods and services than they export to other countries? -a trade deficit -a gdp gap -a balance of trade -a trade surplus
a trade deficit
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by American consumers for a market basket of consumer goods and services. How does the Bureau of Labor Statistics determine the items to be used in the market basket? -interpretations of U.S. Census data -by separating the Consumer Price Index from the GDP -conducting surveys of 28 corporate executive officers -conducting consumer spending surveys
conducting consumer spending surveys
Which of the following is specific kind of a corporation that is an association of individuals organized around a specific economic, social, or cultural need through a jointly-owned enterprise. -conglomerate -sole proprietorship -cooperative -franchise
cooperative
Because people have economic freedom in free enterprise economies, people tend to ... -expect the government to support new businesses until they make a profit. -take more entrepreneurial risks to open new businesses in order to build wealth. -give away more money to charities than people who live in other economic systems. -expect the government to play no role in the economy.
take more entrepreneurial risks to open new businesses in order to build wealth.
What is the source of the net benefits and profits that come from increased international trade? -higher tariffs -lower exports -lower tariffs -comparative advantage
comparative advantage
Which of the following is considered to be a non-price determinant that causes shifts in supply curves? increasing consumer income number of consumers consumer tastes and preferences costs of production
costs of production
If a general business partnership fails, who is responsible for the debts still owed? -the most senior partner in the firm -nobody is held liable -the federal government -each one of the partners
each one of the partners
Exxon-Mobil and Walmart are examples of a kind of corporation that produces goods and services for sale around the world. What is this special type of company called? -multinational -horizontal merger -conglomerate -franchise
multinational
What do economists call a graph of the quantity supplied of a good or service at all suppliers at different prices? -Lorenz curve -demand curve -supply curve -demand schedule
supply curve
The 'market basket' that is used by the Bureau of Labor Statistics to measure inflation using the Consumer Price Index (CPI) is made up of which of the following? -food and insurance costs for the average American family -only food products -only nonfood products -typical goods and services for an urban household
typical goods and services for an urban household
In the modern world, economists and policy makers believe that a nation is efficiently using its resources if it can meet a ____ target unemployment rate. -12 to 15 percent -8 to 10 percent -4 to 6 percent -0 to 3 percent
4 to 6 percent
Cities often have to build large public works, buildings, and other capital. In order to have enough money to build these works,_____ are sold to investors to finance the projects. -shares of stock -mutual funds -municipal bonds -U.S. Savings bonds
municipal bonds
One of the best economic indicators of a nation's economy is the value of its gross domestic product. When economists convert GDP to a value in constant, or unchanging, prices, this value is called -nominal GDP. -real GDP. -CPI. -GNP
real GDP.
Many advanced, modern nations today like the United States and Australia have a mixed economic system because they value free enterprise, but they also -use government to regulate business and protect consumers. -do not allow corporate profits over 20%. -have the government run most of the important industries. -do not use the government as a source of goods or services.
use government to regulate business and protect consumers.
When you purchase coffee at Starbucks using your credit card, -your checking account is immediately debited for the price of the coffee. -there is an electronic chip in the card that automatically credits your savings account with the amount of the coffee. -the amount of the purchase is deducted from a prepaid account. -you are borrowing money from the institution that issued your credit card as it pays Starbucks for your coffee.
you are borrowing money from the institution that issued your credit card as it pays Starbucks for your coffee.
When you invest in a mutual fund, -you have easier access to your money than in a savings account. -your money is invested in a variety of stocks and bonds. -you are guaranteed a fixed return on your investment. -your money is invested in a variety of insurance policies.
your money is invested in a variety of stocks and bonds.
Corporations make up roughly 20 percent of the number of businesses in the United States, but produce about 90 percent of the goods and services in America. What do these facts explain about the advantages and disadvantages of corporations versus other types of business structures? -Corporations can raise large sums of capital investment to grow their business on a large scale. -Corporations will outnumber sole proprietorships in number in the U.S. over the next 20 years. -Sole proprietorships have the least personal liability for individual owners. -Partnerships are plentiful because they have the highest growth potential.
Corporations can raise large sums of capital investment to grow their business on a large scale.
Government is part of the circular flow of the American economy because -Most property in the U.S. is owned by the government. -The federal government employs people and produces certain goods and services. -The federal government is the main source of new technology in America. -Most capital in the U.S. is owned by the government.
The federal government employs people and produces certain goods and services.
Which of the following descriptions is NOTcharacteristic of U.S. Free Enterprise system? -The government actively works to evenly distribute wealth among the people of the nation. -The right to own and control private property is Constitutionally protected. -The key incentive of businesses to produce goods and services for profit. -Competition is encouraged in all legal industries.
The government actively works to evenly distribute wealth among the people of the nation.
Which of the following people would be counted by the Bureau of Labor Statistics as part of the unemployment rate in the U.S.? -prisoners in jail -a 74-year-old retiree -a 15-year-old who is looking for her first job -a 40-year-old man who was working, but has been laid-off by his company
a 40-year-old man who was working, but has been laid-off by his company
Which of the four factors of production is incorrectly described below? -Capital describes the tools, equipment, and buildings that are used to make a good or service. -Technology describes the creative human drive that creates a new business or innovates a new way to produce established goods and services. -Labor is the word economists use to describe the people and the skills they use to make a good or service. -Land is any natural resource that is used to produce a good or service.
-Technology describes the creative human drive that creates a new business or innovates a new way to produce established
Which of the following examples best illustrates the law of supply? -A hamburger stand increases the number of sandwiches they supply every day that the price is increased. -An automobile producer increases the number of tires produced to meet demand. -A flour mill builds a new factory for processing more products. -A catering company buys a new oven to make their work easier.
A hamburger stand increases the number of sandwiches they supply every day that the price is increased.
I am so important that millions of Americans wake up every day to see how much I have grown or receded. Economists constructed me as a mathematical index related to the price values of 30 large, industrial stocks. Big companies like Goodyear, IBM, Exxon-Mobil, and General Motors are part of my index number. How I grow or fall over time indicates whether the private sector of the American economy is growing. What am I? -NASDAQ -Lorenz Curve -FDIC -Dow Jones Industrial Average
Dow Jones Industrial Average
These particular companies, provide financial protection for the family or others on behalf of the purchaser. -Pension Funds -Life Insurance -Banks, Savings & Loans, and Credit Unions -Mutual Funds -Finance Companies
Life Insurance
If we say that a nation's currency depreciates, what does this mean? -The country's products are generally more expensive for other nations. -The country's trade will decrease. -The country is operating along the production possibilities frontier curve. -The country's products become cheaper to other nations.
The country's products become cheaper to other nations.
What will happen to an economics market in equilibrium when there is an increase in supply? -Market equilibrium will not change. -The quantity supplied will be greater than quantity demanded, so the price will drop lower. -The quantity demanded will be greater than quantity supplied, so the price will drop lower. -The good will become quite expensive.
The quantity supplied will be greater than quantity demanded, so the price will drop lower.
What do all of these words have in common: free enterprise, free market, and capitalism? -These words can be used interchangeably to describe the US economy. -These words are used to describe the government economic policy of "laissez-faire." -These words are used by socialists and communists to describe the failures of the US economic system. -These words can be used to describe different command economies.
These words can be used interchangeably to describe the US economy.
Which of the following statements is true about such historical economic recessions as the Panics of 1837, 1857, 1873, as well as the Great Depression of the 1930s? -They were all caused by overspending on government programs. -They illustrate the trough part of the business cycle. -In each case, there was a shortage of labor. -They illustrate the expansion part of the business cycle.
They illustrate the trough part of the business cycle.
In disputes between labor union demands and corporate managers, name the technique where a neutral third party expert is hired who reviews the differences between management and union demands and imposes a decision that is binding for both sides. -lockout -strike -injunction -arbitration
arbitration
Investing in a money market mutual fund is a higher risk than investing in a certificate of deposit because unlike CDs, money market funds -are not protected by the Securities and Exchange Commission. -are not insured by the FDIC. -must be held for a preset amount of time. -do not earn a fixed interest rate.
are not insured by the FDIC.
How do banks make most of their profits? -interest charges on loans -fees charged to customers for account maintenance -fees on debit cards -savings account deposits
interest charges on loans
Choose the letter of the economic system row in the table below that best describes the characteristics of socialism. A ~Property Rights private ownership of property ~Economic Freedom individuals have freedom to decide what to produce, how much to produce, and for whom to produce ~Economic Incentives people can work hard and earn greater profit for their labor based on their own self-interest ~Competition economic competition is a key part of market decisions ~Role of Government government's role is limited based on the principle of laissez faire B ~Property Rights public ownership of property ~Economic Freedom government makes most of the economic decisions for the good of the people ~Economic Incentives all people are equally given what the government determines they need regardless of their effort ~Competition the government owns all production facilities so there is little legal competition ~Role of Government government plays a large role in the economy as it serves as the voice of the people C ~Property Rights public and private ownership of property ~Economic Freedom individuals have some economic freedom but governments play key roles in economic decisions ~Economic Incentives each person is given what they need based upon their how much labor they provide society ~Competition government encourages workers to cooperate with one another to achieve economic goals ~Role of Government government moderates the economy in order to shrink the differences between the rich and poor
C
What scenario would best illustrate the characteristics of economic freedom in the U.S. economy. -Sarah opens an organic restaurant in her neighborhood even though there is another organic restaurant nearby. -Yolanda would like to open a solar power business in her town. She discovers that only the national government can install solar panels and connect to the national grid. -Abena prefers to purchase milk for her family, however the government has cut milk production and increased juice production. -The government says the nation has too many doctors so John is sent to agriculture school to become a farmer.
Sarah opens an organic restaurant in her neighborhood even though there is another organic restaurant nearby.
According to the demand-pull theory, what is responsible for inflation? -Producers raise prices to meet lower demand. -There is too much money is in circulation. -The economy is in wartime production. -The demand for goods and services is exceeding current supply.
The demand for goods and services is exceeding current supply.
The imaginary nation of Economica can produce either tennis shoes or cell phones. Interpret its Production Possibility Curve graph to identify which of the statements about the production possibilities for Economica is correct. Note: in the image of a graph, cell phones are on the x axis, tennis shoes are on the y axis. X value is always listed first (cell phones). Points A (2, 30), B (6, 27), C (10, 20), D (14,10), and E (16, 0) are all on the production possibilities curve. Point F is at coordinates (4,15). Point G is at coordinates (16, 30). -The production of tennis shoes and cell phones as shown by point C is least efficient and indicates that the nation's resources are not being fully used as they could. -The nation can produce the most efficiently if it saves its resources and produces tennis shoes and cell phones at the level indicated by point F. -The production of tennis shoes and cell phones is only possible at point A on the graph. -The nation can efficiently produce 10 units of tennis shoes and 14 units of cell phones as illustrated by point D on the graph.
The nation can efficiently produce 10 units of tennis shoes and 14 units of cell phones as illustrated by point D on the graph.
Which of the following is NOT a factor that has hurt the economic progress of less-developed nations and regions in the world? -making military spending a higher priority than building the nation's infrastructure -having a free market economy -political leaders who accumulate great personal wealth while governing -a history of colonialism
having a free market economy
Minerals, water, and fish are part of the economic factor of production known as -capital. -structures. -entrepreneur. -labor. -land.
land
What word best describes all of the natural resources that are used to produce a good or service? -Labor -Land -Minerals -Capital
land
U.S. Savings Bonds are different than almost all other bonds because -Savings Bonds are only eight months term until maturity. -the buyer does not receive interest payment until he cashes the bond in. -they are only issued in denominations over 5000 dollars. -they usually provide the highest rates of return.
the buyer does not receive interest payment until he cashes the bond in.
