Econ Final
To an economist, public goods are defined as goods that
are used or consumed collectively by the population
Demand is best defined as the measure of how much consumers are able and willing to buy
at different prices at a particular time
In economics, the term "demand" refers to the quantities of a goods that people will buy
at different prices at a particular time.
Supply is best defined as the measure of how much producers are willing and able to sell
at different prices in a given period of time
The future of globalization means
more trade between countries
An individual's wealth after debts and other obligations have been subtracted is known as their
net worth
An economist would argue that of the following choices, structural unemployment would most likely be caused by
new entrants into the labor force
The Federal Reserve is best described as
the central banking system of the United States
To an economist, wages are part of
the cost of maintaining labor resources
In a pure market economy, prices are generally determined by
the exchanges between buyers and sellers
Which of these probably has the GREATEST overall influence on labor costs?
the forces of supply and demand
In a savings account, "Principal" is BEST described as
the initial amount of savings placed on deposit
The inverse relationship between the price of a product and the quantity that consumers will buy is known as
the law of demand
Which of these does the Federal Reserve System control most DIRECTLY?
the money supply in the United States economy
According to the textbook, "rate of return" is described as
the percentage of interest or dividends paid on savings or investments
An economist would probably define the EXCHANGE RATE as
the price of one nation's currency in relation to another currency
In economics, a shortage of a product occurs when
the product's price falls below its market-clearing level
In economics, the term supply refers to
the quantities of a good or service a producer is willing and able to sell at different possible prices
The market equilibrium price is the price at which
the quantity demanded is the same as the quantity supplied
Producers usually sell more at higher prices than at lower prices because
their marginal costs usually rise as they increase production
Which of the following BEST explains why a computer database designer is likely to have greater earning potential than a technician who repairs typewriters?
: Database design has a higher market value than typewriter repair services
According to the textbook, a mutual fund is best described as
: a pool of money used by a company to buy assets such as stocks or bonds, on behalf of shareholders.
According to the textbook, "compound interest" is described as
: the interest calculated on the sum of savings plus the accumulated interest.
Which of the following transactions would most likely be included in the calculation of a country's gross domestic product?
A bakery earns $750 one month from cake sales
Which of the following statements about investing in human capital is most likely true?
All of the above
Demand for automobiles tends to be price-elastic because automobile
are large expenditure items
Which of the following statements about international trade is most likely true?
Each country can import only if another country exports.
Which of the following effects would a government considering a gasoline tax most likely classify as a NEGATIVE incentive?
Gasoline taxes will reduce overall consumer spending.
Which of the following statements about unemployment in the United States is TRUE?
In order to be considered unemployed, a person must be looking for work.
Which of the following statements about competition in a market economy is TRUE?
It affects supply and demand schedules.
Which of the following characteristics has the GREATEST effect on whether an item can be used as money?
It must be commonly accepted as payment.
Which of the following is likely to increase the demand for peanut butter?
News that insects have destroyed much of the peanut crop
If the DEMAND for product B tends to fall immediately after the PRICE for product A falls, which of these conclusions is most likely?
Products B is a substitute for Product A
What is the best definition for "liquidity"?
The ease at which any asset can be converted to cash.
What is the best definition for "gross domestic product"?
The final value of all goods and services produced in the country in one year.
Which of these actions is probably most influenced by non-economic goals?
The government imposes pollution controls on an industry.
Which of the following statements about the money supply in the United States is MOST LIKELY true?
The money supply has an effect on the prices consumers pay
When demand and supply for a product are equal, which of the following is most likely true?
The product's market clears
Which of the following describes the way the GREATEST NUMBER of people earn income in the United States?
They supply labor to organizations that provide goods or services
An economist would most likely define an EXTERNALITY as
a cost paid by someone who is neither the producer nor consumer of a product
When government revenues exceed government spending, the result is
a federal budget surplus
By definition, which of these is created whenever buyers and sellers exchange goods or services?
a market
The United States economy is best described as
a mixed economy with market and government elements
Demand for insulin tends to be price-inelastic because the drug is considered
a necessity
According to economic principles, a tax on an item such as bread would be considered
a regressive tax
When people use money to save for goods and services they will purchase at a later date, they are using money as
a store of value
Incomes may be different from one group of people to the next because of
all of the above
Economic growth in a country
all of the above.
Which of the following people would probably find gross domestic product (GDP) statistics most useful?
an economist comparing a country's economic growth from one year to the next
If the profit opportunity for a given product increases, the most likely result would be
an increase in the number of producers
When something is produced, there is always
an opportunity cost.
Which term means "the cost of credit calculated as annual percentage of of the principal borrowed"?
annual percentage rate
In a market economy, the money supply increases when
banks make loans
Profit is one of the main incentives for nearly all
businesses
During periods of rapidly increasing inflation rates, a person's salary will
buy fewer goods than before
According to the textbook, collateral is best described as
capital acceptable to a lender for a loan
A major factor in the decline of manufacturing jobs from the early 1900s to the late 1990s was the result of
changes in technology
During one month, the price of a product rose 20%. This most likely occurred because of an increase in
consumer demand
Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States?
consumer spending, business investment, government spending, net exports
When overall demand for labor is low, an increase in the nation's unemployment rate is most likely the result of
cyclical unemployment
An economist would probably agree that demand and supply schedules are PRIMARILY based on
decisions made by consumers and producers in a market
If the price of a product falls, producers are likely to
decrease production to lower marginal costs
An economist would most likely agree that a key advantage of money as a medium of transactions is that it
decreases the cost of the exchange
If consumers readily switch to substitutes when the price of butter increases by only a small amount, the demand for butter is said to be
elastic
Which of these BEST illustrates an effort made by the United States government to ensure fair competition in the marketplace?
enforcing antitrust legislation
During which period of the business cycle do most businesses make the greatest increases in spending levels?
expansion
Demand for a product tends to be price-inelastic when the product has
few if any substitutes
If the minimum wage is set too high, some economists believe the result might be that
fewer jobs will be available at that price
The business cycle is a term used to describe the
fluctuations (increases and decreeases) in business activity over time
An economist would argue that according to the principle of comparative advantage, a country should generally
focus productive resources on what it does best relative to other nations
One of the benefits of trade barriers is that they may
help a nation's newest industries develop successfully
Fiscal policy refers to the power of the federal government to
impose taxes and spend tax revenues
Which of the following provides the federal government with the GREATEST amount of revenue?
income and payroll taxes
If a good or service is in high demand, this can
increase the wages of workers
Tariffs or quotas on imports are most likely to cause
inefficient production
The consumer price index (CPI) is used to measure
inflation
In a market economy, goods are most often produced as a result of
interaction between buyers and sellers
Which of the following terms could an economist use to describe the cost of borrowing other people's money?
interest
Economists generally consider money to be preferable to using a barter system because it makes exchanges
less costly
In international trade, an import quota is best described as something which
limits the quantity of an item that can be imported
People are more likely to buy new houses in an economic environment that includes
lower interest rates for home loans
Which of these is the most likely effect of an increase in the cost of production?
lower levels of production
Which of these activities is beyond the traditional role of the FEDERAL government?
paying for local police services
Responses to incentives are predictable because
people generally pursue their own interests
A DEFLATIONARY period is best described as a period of time in which
prices for goods and services decrease
People who create goods and services are most commonly called
producers
The Social Security and Medicare systems illustrate the United States government's effort to
promote economic security
A labor union or other group would most likely argue in favor of trade barriers as an effective way of
protecting domestic jobs in a specific trade or industry
Imports are best described as goods that have been
purchased from other nations
The market-clearing price is the price at which
quantity supplied equals quantity demanded
An economist would most likely agree that specialization
reduces self-sufficiency but increases productivity
An economist would probably agree that prices set by supply and demand are primarily measures of the
relative scarcity of goods or services
Which expense is most likely a fixed cost?
rent for a company's warehouse
A proportional tax is best described as a form of taxation that
requires all citizens to pay an equal percentage of their incomes to taxes
Exports are best described as goods that have been
sold to consumers in other countries
Which of the following institutions is responsible for controlling the money supply in the United States economy?
the Federal Reserve
The purchase of a new product in a market economy is an act of
voluntary exchange
In a market economy, prices are affected by all of the following EXCEPT
welfare
Labor unions typically negotiate wages, employee benefits, and
workplace rules and practices