economics

Based on the graph, the increase in oil prices caused output to Select one: a. fall from Q1 to Q0. b. fall from Q0 to Q2. c. rise from Q2 to Q0. d. rise from Q0 to Q1

fall from Q0 to Q2.

The theory that wages are based on the supply and demand for a workers skills is the

market theory of wage determination.

If the world population continues to grow at its present pace, by 2045 the worlds population will reach Select one: a. 12 billion. b. six billion. c. nine billion. d. eight billion

nine billion

he restructuring of the Soviet economy introduced by Gorbachev was called Select one: a. perestroika. b. Five-Year Plan. c. collectivization. d. Gosplan.

perestrokia

Which of the following is a model that is often used to measure and illustrate the concept of opportunity cost?

production possibilities frontier

Tariffs and quotas are designed to Select one: a. promote third-world development. b. decrease prices consumers pay for goods. c. increase trade deficits. d. protect domestic industry

protect domestic industry

The FDIC was established to Select one: a. help with the financing of World War II. b. create a government banking monopoly. c. protect the savings of the American people. d. federalize the banking system.

protect the savings of the american people

One reason the government is involved in the U.S. economy is to

regulate industries in which a monopoly is in the public interest

Changes in technology and changes in consumer tastes can cause Select one: a. cyclical unemployment. b. frictional unemployment. c. structural unemployment. d. seasonal unemployment.

structural unempoloyment

Deregulation is most closely associated with Select one: a. Keynesian economics. b. laissez-faire economics. c. supply-side economics. d. demand-side economics

supply-side economics.

the 401(k) in this illustration earned more than the traditional IRA because

the company matched the employee's contributions in the 401(k)

The Smoot-Hawley Tariff of 1930 resulted in Select one: a. rapid growth of international trade. b. significant growth of domestic industry. c. the highest tariff rates in U.S. history. d. the lowest tariff rates in U.S. history.

the highest tariff rates in us history

which of the following is TRUE regarding land, labor, capital, and entrepreneurship?

to maximize efficiency with these factors of production.

What dollar amount should appear in place of the letter P in the table? Select one: a. $190,000 b. $1,000,000 c. $100,000 d. $1,900,000

100,000

When an unexpected event occurs, how do prices help a market economy adjust?

By adjusting the consumption and production of goods

Which letter designations in the table mark Fed actions that will contract the money supply? Select one: a. G, I, J b. G, H, J c. F, I, K d. F, H, J

GHJ

Which of the following is true regarding the theory of competitive pricing?

It is a set of ideal conditions and outcomes

The Clayton-Anti Trust Act

Outlawed price discrimination

One of the noted advantages of a flat tax is

The flat tax offers a relatively simple tax process

Which of the following is the term that describes the invisible barrier to women and minorities' ability to advance in the corporate structure?

The glass ceiling.

Which of the following statements about the minimum wage is accurate?

The minimum wage remained the same from 1998 through 2006

The theory of production deals with the relationship between the factors of production and

The output of goods and services

If the demand curve for a good shifts to the right (a growth in demand) and the supply stays the same, what happens to the price of the good?

The price of the good rises

All of the following are reasons why prices work to allocate goods EXCEPT

The price system ensures that everyone gets everything they need

The Sherman Anti-Trust Act

Was a governmental attempt to promote and encourage competition.

Which of the following is TRUE? Select one: a. when economies grow, there are often fewer employment opportunities available. b. When economies grow, there are often new employment opportunities available. c. All of these are true. d. There is little to no correlation between poverty levels and economic growth

When economies grow, there are often new employment opportunities available

Which of the following would be a helpful tool to help nations, communities, and families compensate for scarcity while trying to get what they wanted and needed?

a budget

a demand schedule shows

a listing of the various quantities demanded of a particular product at all prices that might prevail in the market.

the united states

a modified private enterprise economy

When labor and management ask a third party to collect information about a dispute and present nonbinding recommendations, they are using

a. fact-finding

According to the demand-pull theory, inflation is caused by Select one: a. government. b. all of the above. c. consumers. d. businesses.

all of the above

Junk bonds Select one: a. are issued by municipalities. b. are exceptionally risky. c. carry a low rate of return. d. are usually tax-exempt.

are exceptionally isky

When a country is producing at the production possibilities frontier, it can be said that the country is operating

at full potential

The state governments spend most of their money on Select one: a. National guard training b. Intergovernmental expenditures c. State highway repair d. Education

b. Intergovernmental expenditures

Which of the following is an example of governmental MANDATORY SPENDING? Select one: a. National defense spending b. Paying the interest on the federal debt c. Educational programs d. Environmental and Space Programs

b. Paying the interest on the federal debt

Money loses its value when it Select one: a. is durable. b. becomes too plentiful. c. is divisible. d. becomes too portable.

becomes too plentiful

Which of the following would make the price of a good/service increase?

c. a successful ad campaign causes consumer taste to favor this particular good or servic

Money that has an alternative use as an economic good is Select one: a. commodity money. b. wampum. c. specie. d. fiat money.

commodity money

Which point on the graph represents the highest aggregate demand? Select one: a. a b. b c. d d. c

d

Which of the following BEST describes a MARKET economy?

economic freedom

Which is true concerning the Gramm-Rudmand-Hollings Bill? Select one: a. It was a bill that was vetoed because it limited the government's ability to tax b. It was a bill that was passed to put national defense on the mandatory spending list c. It was legislation intended to establish a balanced budget d. It was a bill that helped female employees get tax exemptions

. It was legislation intended to establish a balanced budget

What is the idea behind "cutting taxes" (lowering taxes). Select one: a. People will have more money available to them to spend and help the economy grow. b. People will decide to start paying for military protection on their own. c. The government is trying to increase its tax revenue. d. The government is trying to have more immediate money for transfer payments

. People will have more money available to them to spend and help the economy grow.

Which of the following is TRUE regarding the "incidence of a tax".

. This refers to the individual(s) who take the final burden of the tax

What dollar amount should appear in place of the letter S in the table? Select one: a. $200,000 b. $180,000 c. $1,800,000 d. $2,200,000

1,800,000

Baby boomers are those people born between Select one: a. 1935 and 1945. b. 1965 and 1975. c. 1955 and 1965. d. 1946 and 1964

1946 1964

During which year did the first federal budget surplus occur within the last three decades? Select one: a. 1975 b. 1985 c. 1998 d. 1990

1998

If competition decreases in a certain industry

A company that is in that industry may have and exert more economic powe

When one is making an economic decision, how can a decision making grid be utilized in order to make good choices?

A decision making grid can help weigh trade-offs and opportutnity costs.

A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred? a. A sharp increase in revenues demonstrated the elasticity of the product. b. A small increase in revenues demonstrated the unit elasticity of the product. c. A dramatic decline in revenues demonstrated the elasticity of the product. d. A dramatic decline in revenues demonstrated the inelasticity of the product. *Hint: You have to consider the effect that elasticity has on revenues.*

A dramatic decline in revenues demonstrated the elasticity of the product

Which of the following represents a probable unintended effect of a price ceiling?

A shortage of the supply of the good with the price ceiling.

Which of the following best describes the term economics?

A study of how people try to satisfy their wants through the use of scarce resources.

Why do prices move towards equilibrium in a free market?

Because surpluses tend to bring prices down and shortages tend to raise prices

The first federal legislation to exempt unions from the antitrust laws was the

Clayton Antitrust Act.

The demand for gold increases when

Economic and political conditions are unstable

Which of the following statements are true regarding employment statistics? Select one: a. Economists expect that a certain amount of people will be unemployed even at full employment. b. Full employment and cyclical unemployment are both scenarios that economists want to avoid. c. Full employment means that every adult has a job d. When the only unemployed people in an economy are structurally unemployed, the economy is at full employment.

Economists expect that a certain amount of people will be unemployed even at full employment.

Why are entrepreneurs important in a free market economy?

Entrepreneurs help create a wide variety of goods and services that consumers need and want.

which letter designations in the table mark Fed actions that will expand the money supply? Select one: a. F, I, K b. F, H, c. G, I, J d. G, H, J

F,I,K

Which of the following will most likely happen if interest rates are raised? Select one: a. The money supply will expand b. Businesses will likely apply for more loans, while private citizens may or may not. c. More private citizens and businesses will apply for loans. d. Fewer businesses and private citizens will apply for loans and there will be a general decrease in the money supply.

Fewer businesses and private citizens will apply for loans and there will be a general decrease in the money supply.

The following economic concept is best described as the dollar value of all final goods and services produced within a country's borders and is the most comprehensive measure of a country's total production is

GDP

Which of the following best describes an economy that is in recession? Select one: a. A recession is a period of economic expansion. b. GDP is down, but unemployment numbers are lower. c. unemployment rates are higher and GDP is up. d. GDP is down and unemployment rates are up

GDP is down and unemployment rates are up

In what way might globalization of the world economy be responsible for the trend of declining labor unions? Select one: a. Globalization encourages companies to seek lower wage Globalization encourages companies to operate in other countries were wages for labor can be lower. b. Because of globalization, labor unions in the United States have been outlawed. c. Unions are illegal in all countries except for the United States. d. Because of international trade agreements, wages for workers all over the world have risen so much that labor unions are unecessary

Globalization encourages companies to seek lower wage Globalization encourages companies to operate in other countries were wages for labor can be lower

Basically, competition in a free market system tends to have what effect on prices?

Help approach price equilibrium

A command economy has all of the following characteristics EXCEPT

It is designed to meet all of the wants of all the consumer

Under perfect competition

Market equilibrium sets the price of goods and services

Regarding what your textbook and resources state about minimum wage, which of the following is FALSE?

Minimum wage reached its peak in 1988 if it is being determined as a percentage of the average manufacturing wag

What is the idea behind "cutting taxes" (lowering taxes). Select one: a. People will have more money available to them to spend and help the economy grow. b. People will decide to start paying for military protection on their own. c. The government is trying to increase its tax revenue. d. The government is trying to have more immediate money for transfer payments

People will have more money available to them to spend and help the economy grow

Which of the following is an example of how the government uses taxes to redistribute income? Select one: a. The government puts heavy taxes on the poor to gain revenue. b. People with income pay income taxes and the government can spend money on transfer payments. c. the government places very low taxes on the rich so that they can keep their money. d. The government taxes all people equally

People with income pay income taxes and the government can spend money on transfer payments.

Which of the following generally decreases the supply of a product?

The tax on the product increases

Which of the following statements is TRUE according to your information on using credit cards? Select one: a. There are no extra costs associated with borrowing money using credit cards. b. There are various extra costs invovled when using a credit card, including the cardholder's annual percentage rate. c. All credit card holders have to pay off the total balance of their cards each month. d. All credit cards offer the same features.

There are various extra costs invovled when using a credit card, including the cardholder's annual percentage rate.

A deficiency payment is a payment made by the federal government

To the producers to make up the difference between the market and target price

Which of the following statements is true regarding division and specialization of labor?

When labor is divided and workers specialize on specific tasks, resources are often used more efficiently than before specialization

When considering the stages of production, which of the following is true?

When marginal product becomes negative, the workers are getting in each others' way.

When does a surplus occur at any given price?

When the quantity demanded is less than the quantity supplied

How might taxes affect an entrepreneur's business decisions? a. If taxes are being placed on certain goods, the entrepreneur may try to limit use of that good if possible. b. If taxes are lifted on a certain good, then the good is generally more expensive, so the entrepreneur would make less of the good. c. smart entrepreneurs generally do not consider taxes in their equations d. Entrepreneurs do not have to pay taxes in the U.S.

a

For all the recent talk of cutting taxes, Congress rarely cuts them when the economy is growing robustly, as it is now, and unemployment is low. The worry among economists is that the extra money in people's pockets may make an already strong economy too strong, finally stoking inflation after a long period of relatively stable prices. Source: The New York Times, July 14, 1999. mc030-1.jpg The passage describes rising inflation as a possible result of Select one: a. rising unemployment. b. a booming economy. c. a prolonged period of stable prices. d. tax cuts.

a booming economy

Which of the following would be a helpful tool to help nations, communities, and families compensate for scarcity while trying to get what they wanted and needed? Select one: a. A chart illustrating GDP b. A budget c. A chart illustrating international trading patterns. d. A Chart illustrating GNP

a budget

Which of the following events could cause aggregate supply curve AS0 to shift to AS1? Select one: a. a decrease in the price level b. a rise in interest rates c. a tax cut d. an increase in the price for foreign oil

a tax cut

Since the colonial period, the census has revealed Select one: a. growth of extended family households. b. a trend toward smaller households. c. an increase in the number of children per family. d. a movement of population to rural areas.

a trend toward smaller households

The following example represents which type of tax: If someone paid $5000 in food and clothing purchases taxed at 4% for a total tax of $200. This $200 represents 2% of the person's income. Another person paid $5000 in food and clothing purchases taxed at 4% for a total of $200. This was 10% of the person's income. Select one: a. a regressive tax b. a progressive tax c. VAT tax d. a sin tax

a. a regressive tax

The Council of Economic Advisers Select one: a. advises Congress on economic developments and strategy. b. determines the Feds monetary policy. c. advises the president on economic developments and strategy. d. is an independent agency with broad regulatory powers.

advises the president on economic developments and strategy

Unlike demand-side economics, supply-side economics Select one: a. emphasizes increasing consumer purchasing power. b. advocates increased government involvement in business. c. urges higher taxes to increase spending on government programs. d. advocates reduced government involvement in business.

advocates reduced government involvemnet in buisness

Which of the following is TRUE regarding fractional reserve banking? Select one: a. Fractional reserve banking allows banks to use a portion of the money that is deposited into them b. By increasing the reserve requirement, the Fed can decrease the money supply c. By decreaseing the reserve requirement, the Fed can increase the money supply. d. All of these are correct

all are correct

Which of the following is TRUE regarding international trade? Select one: a. All of these are correct b. Freedom to trade internationally adds to the consumers' choices available for purhcase c. Typically, it is belived that when countries trade with one another, ther eare gains in production efficiency. d. Countries often hope that international trade will help raise the standard of living for their citizens

all of these are correct

Which of the following is TRUE regarding why countries trade with one another? Select one: a. Countries often hope that international trade will help their economy grow b. Countries trade because not all nations have the same resources. c. All of these are correct . d. Countries trade so that they can get products and services that they are not as efficient in making as other countries.

all of these are correct

Which of the following is true regarding investing in the stock market? Select one: a. When someone buys in the "option market", they will have the ability to either buy or sell at some point in the future at an agreed upon price. b. All of these are correct. c. diversification in the market can help absorb some of the risk associated with buying stocks. d. When you purchase a share of stock, you are purchasing a portion of the corporation

all of these are correct

Which of the following is true regarding the relationship of international trade and competition? Select one: a. All of these are correct b. International competition, like competition in general, can have effects on the price levels of goods. c. When tariffs increase, domestic producers usually have fewer international competitors. d. When countries trade with one another, there is often increased competition among firms offering the same good or service

all of these are correct

Which of the following statements is true? Select one: a. Credit cards often have a "spending limit". b. There are trade-offs invovled in using credit cards. c. All of these are correct. . d. By using a credit card, you may be able to immediately get a good or service that you cannot pay for with cash, but, because of the interest, you will end up paying more than the "price tag" amount.

all of these are correct

Which is an example of how the government has to deal with scarcity concerning tax revenues? Select one: a. decisions have to be made about promoting research and development or the maintenance of national parks b. Decisions must be made concerning spending money on welfare or public works c. all of these are examples of how the government has to deal with scarcity of tax revenues. d. Decisions have to be made whether to increase spending on the military or education.

all of these are examples of how the government has to deal with scarcity of tax revenues.

Which is an example of how the government's economic actions can influence the U.S.? Select one: a. When the government produces goods or services that competes with the private sector. b. When the government uses tax revenues to pay for programs like medicare and Medicaid c. all of these are examples of how the government's actions can influence the U.S. d. When the government uses tax money to fund public works

all of these are examples of how the government's actions can influence the U.S.

Which of the following would be a way that the government could encourage entrepreneurship in an economy? Select one: a. all of these are possibilities that the government could take to encourage entrepreneurship. b. The government could protect domestic businesses from foriegn competition. c. The government could decrease regulations on small businesses. d. The government could lower the amount of taxes that new businesses would have to pay.

all of these are possibilties

Which of the following would be a way that the government could encourage entrepreneurship in an economy? Select one: a. The government could lower the amount of taxes that new businesses would have to pay. b. all of these are possibilities that the government could take to encourage entrepreneurship. c. The government could decrease regulations on small businesses. d. The government could protect domestic businesses from foriegn competition

all of these are possiblities

Which of the following is true about developing nations? Select one: a. as nations develop, they tend to purchase more goods and services which add to the aggregate demand of the global economy. b. developing nations often require monetary and other types of assistance from more developed countries. c. as nations develop, they tend to produce more goods and services which add to the aggregate supply of the global economy. d. all of these are true.

all of these are true

Which of the following is true regarding how incentives are used in the market place?

all of these are true

Which of the following is true regarding taxes? Select one: a. all of these are true. b. taxes can be used as an incentive to encourage or discourage certain behaviors. c. the rising and lowering of taxes has an effect on the amount of money that families can save. d. the rising and lowering of taxes has an effect on the amount of money that families can spend on various goods and services.

all of theses

Which of the following situations could cause aggregate demand curve AD1 to shift to AD0? Select one: a. a forecast of better economic conditions ahead b. an increase in consumer saving c. a decrease in the personal income tax rate d. higher transfer payments

an increase in consumer saving

The benefits of long-term economic growth include all of the following EXCEPT Select one: a. an increase in employment. b. a boost in economic growth of other nations. c. an increase in the standard of living. d. an increase in the availability of land

an increase in the availability of land

Bonds Select one: a. are a consistently low-risk investment choice. b. are insured by the federal government. c. are contracts to repay borrowed money at regular intervals. d. are rated according to risk from A through G.

are contracts to repay borrowed money at regular intvals

Municipal bonds, or munis, Select one: a. are often risky investments. b. are usually a safe investment. c. pay higher interest rates than most bonds. d. are not usually tax-exempt.

are usually a safe investment

Based on your understanding of economics and taxes, what may happen if unemployment rates rise dramatically? Select one: a. The government will see an increase in tax revenue. b. The revenue that the government receives from taxes may fall. c. There will be more money added to pay for transfer funds. d. fewer people will need transerf payments

b. The revenue that the government receives from taxes may fall.

Why do countries trade with one another? Select one: a. because all countries do not have all the resources and goods and services that they would like to have b. all of these are correct. c. because most countries find it beneficial to trade. d. because a country may not be as efficient at making a good as another country is and they decide to trade

b. all of these are correct

"Like a driver applying a quick tap of the brakes, the Federal Reserve yesterday raised the cost of borrowing to keep the U.S. economy from running ahead too fast. As a result, consumers can expect to pay a little more when buying homes, cars, and other big-ticket items, as well as when carrying credit-card balances." Source: The Columbus Dispatch, July 1, 1999 Why will the Fed's action in the passage cause the result described? Select one: a. Banks will raise their loan interest rates. b. Banks will have to meet a higher reserve requirement. c. Sellers of expensive items will raise their prices. d. Inflation will increase.

banks will raise their loan interest rates

Which of the following is true regarding the trade offs associated with money? Select one: a. Because of scarcity, all of these are correct. b. Investors have made the decision to put off spending now in hopes that they money they invested will create more money. c. Because of scarcity, if we spend a certain amount of money, that same money will not be available to invest. d. If we invest money, those same funds will not immediately be available for spending.

because of scarcity, all of these are correct

The president of the United States appoints members of which group on the Federal Reserve organization chart? Select one: a. Board of Governors b. Federal Open Market Committee c. Federal Advisory Council d. Federal Reserve Banks

board of governors

During the second stage of economic development, a country Select one: a. is still tied to traditional culture with no formal economic organization. b. overcomes the barriers of primitive equilibrium. c. breaks with primitive equilibrium and moves toward economic and cultural changes. d. experiences an income that grows faster than population and per capita income increases.

breaks with primative equilibrium and moves toward economic and cultural changes

Which of the following do FICA taxes help pay for? Select one: a. Benefits to state workers only b. Unemployment and drivers' educational training c. Social security and medicare d. The insurance put on bank deposits

c

Which of the following statements is true? Select one: a. State and local governments are the only governments able to tax U.S citizens b. the government typically does not tax most U.S. citizens c. National, state, and local governments have the ability to tax citizens d. Only the federal government can tax citizens in the U.S.

c

The tools, equipment and machinery that are needed in order to produce other goods and services are called

capital goods

Which of the following economic system is being described below? In this economy, the government determines how much of a good to produce. The government also decides what to produce. The consumers do not have much choice in the matter of what goods they will get.

command economy

"The Aztec in Central America used cacao beans, from which chocolate is made, as money. Prices varied from a few beans for a piece of fruit to several thousand for an enslaved person. Aztec merchants had to take care when selling expensive items. Payment usually came stored in sacks, and the sacks might contain counterfeit money—bean husks filled with mud." Based on the passage, what type of money did the Aztec use? Select one: a. specie b. fiat money c. commodity money d. legal tender

commodity money

In a free enterprise/free market economy, who ultimately decides what to produce?

consumers

Person "A" earns $10,000 a year and pays 10% of his income in taxes. Person "B" earns $60,000 a year and pays 20% in taxes. Which kind of tax is being represented? Select one: a. A loophole tax b. A flat tax c. A regressive tax d. A progressive tax

d

Which of the following is true concerning the consumption habits of ALL levels of government? Select one: a. the private sector does not produce any goods for the government b. The levels of government consume all of the nation's output and then ration out resources as it sees fit. c. The levels of government rarely consume any of the nation's output d. All levels of government combined consume close to one-third of the nation' output.

d. All levels of government combined consume close to one-third of the nation' output.

For most products and services, increased price results in

decrease in demand

GDP = C + I + G + F In this model, the "F" represents the ** This is the same as (x-n) Select one: a. difference between the dollar value of goods sent abroad and goods purchased from abroad. b. total investments in the United States by foreign nationals. c. total of the dollar value of goods sent abroad and goods purchased from abroad. d. total investments in other nations by United States citizens.

difference between the dollar value of goods sent abroad and goods purchased from abroad

Based on this graph, how do governments and businesses borrow funds? Please choose the best answe

directly from savers and indirectly through financial intermediaries

The numbers in this table were calculated by Select one: a. dividing GDP by total population b. adding the dollar value of all final goods and services produced in the nation. c. subtracting net exports from GDP. d. multiplying GDP by total population.

dividing GDP by total populatn

Which of the following statements is TRUE? Select one: a. an economy can grow if it effectively invests in capital. b. an economy can grow if it effectively invests in human resources. c. each of these is true

each of these is true

Which of the following choices best describes what this production possibilities frontier is depicting (the movement from the curve containing points a, b, and c to the curve containing point d)

economic growth

If an action in one part of the world or country has an economic impact on another part of the world or country, it can be said that this is an example of

economic independence

What are intergovernmental revenues generally used to do?

educate and provide public welfare

What is the main goal of division of labor?

efficiency in production

Economic growth benefits the government by Select one: a. justifying tax increases. b. reducing budget surpluses. c. reducing the need for highway and defense spending. d. enlarging the tax base.

enlarging the tax base

Which of the following represents how private property rights act as incentives in a free market economy?

entrepreneurs are encouraged to develop their ideas

Which of the following prohibits wage and salary discrimination for jobs that require equivalent skills and responsibilities? Select one:

equal pay act

A company is maximizing profit when marginal revenue

equal to marginal costs

The Fair Labor Standards Act

established a federal minimum wage.

The National Labor Relations Act

established the right of unions to collective bargaining

A key gauge of future U.S. economic activity declined 0.5% last month, as the Sept. 11 terrorist attacks in New York and Washington weakened an already troubled economy. The Conference Board said Monday its index of leading economic indicators fell to 109.2 in September,...the largest one-month decline since January 1996.... The index indicates where the overall U.S. economy is headed in the next three to six months.... The economy had been struggling for several months before the Sept. 11 attacks. Many economists have said they believe that a recession is unavoidable with the new uncertainties raised by the disaster. Source: "Leading Indicators Decline," USAToday.com, October 22, 2001. mc026-1.jpg The passage discusses a business fluctuation influenced by Select one: a. external shock. b. monetary factors. c. innovation. d. capital expenditures.

external shock

In this production possibilities frontier, what could cause production to move from point a to point e?

factories that are available but idle

According to this demand curve, if the price of movie videos increases from $14 to $16, the quantity demanded will

fall from 600 to 400

Which group on the Federal Reserve organization chart decides whether to raise or lower interest rates? Select one: a. Federal Advisory Council b. Federal Open Market Committee c. Board of Governors d. Federal Reserve Banks

federal openmarket committee

Which of the following is true regarding entrepreneurs in a free market economy?

financial and personal reward

total cost is the sum of

fixed and varied costs

Property taxes and rent payments would be classified as which types of costs?

fixed costs

In which of the following economies would private property rights be most important?

free market economy

A protective tariff is used to Select one: a. expand trade. b. increase revenue. c. give inefficient domestic industries an advantage. d. gain a comparative advantage

give ineffienct domestic industries an advantage

How are families, communities, governments and nations similar when considering opportunity costs?

have to consider opportunity costs when making decisions

Which of the following events could cause aggregate supply curve AS1 to shift to AS0? Select one: a. lower taxes b. higher labor productivity c. lower prices for foreign oil d. higher interest rate

higher interest rate

Decreases in aggregate supply can be caused by Select one: a. lower taxes. b. higher interest rates. c. reduced government regulation. d. decreases in fuel and transportation costs.

higher interest rates

Aggregate demand will increase Select one: a. when productivity is low. b. if the dollar declines in value. c. if consumers save more and spend less. d. if consumers save less and spend more.

if consumers save less and spend more

Aggregate demand will decrease Select one: a. when productivity is high. b. when taxes are high. c. if consumers save less and spend more. d. if consumers save more and spend less.

if consumers save more and spend less

In the production possibilities frontier shown in this graph, what could cause production to move from point b to point d?

increased productivity

Because a price increase has little or no effect on quantity demand, the demand for the product is

inelastic

John Maynard Keynes Select one: a. introduced his theories in the 1970s. b. argued that government should limit its involvement in business. c. argued that foreign-sector spending should not be ignored. d. introduced his theories in 1936

introduced his theories in 1936

An example of expropriation is Select one: a. refusing to pay back loans. b. China's policy of forcing people from the city to work on farms. c. accepting loans without expecting to pay them back. d. Iran's takeover of American oil facilities in that country

irans takeover of american oil facilities in that country

The Federal Reserve Select one: a. is made up of 12 district banks and 25 branch banks. b. was established in 1930s. c. is managed by a 12-member board of directors. d. is made up of district banks that operate independently from one another.

is made up of 12 district banks and 25 branch banks

The Feds Federal Open Market Committee Select one: a. regulates savings and loan associations, savings banks, and credit unions. b. advises the Fed on the overall health of the economy. c. advises the Fed on consumer credit laws. d. is the Feds primary monetary policymaking body.

is the fed primary monetary policymaking body

A hypothetical relationship between federal income tax rates and tax revenues is the Select one: a. automatic stabilizer. b. aggregate supply curve. c. Laffer curve. d. aggregate demand curve.

laffer curve

Perfect competition is characterized by

large number of buyers and sellers

According to John Maynard Keyness theory of the multiplier-accelerator effect, a decline in investment spending will Select one: a. be offset by an increase in consumer demand. b. lead to a downward spiral of the economy. c. lead to lower consumer prices. d. lead to an upward spiral of the economy

lead to a downward spiral of the economy

All of the following account for the growing income gap EXCEPT Select one: a. a shift in employment from the manufacturing to the service industry. b. a shift from married-couple families to single-parent families. c. lessening wage advantages for the well educated. d. a decline in unions.

lessening wage advantages for the well educated

A nonbank financial institution set up to provide financial protection for survivors of the insured is the Select one: a. finance company. b. pension fund. c. life insurance company. d. real estate investment trust.

life insurance company

Which of the following is a good or service that the government provides by spending its tax revenues? Select one: a. Road construction and repair b. Education c. All of these are examples of goods/services that the government provides by using tax revenues. d. National defense

ll of these are examples of goods/services that the government provides by using tax revenues.

In the short run, an increase in the money supply results in Select one: a. higher interest rates. b. lower interest rates. c. economic expansion. d. increased consumer spending.

lower interest rates

One advantage of e-commerce is that

many times overhead costs are low

Members of which group on the Federal Reserve organization chart must buy stock in a Federal Reserve bank? Select one: a. Member Banks b. Federal Open Market Committee c. Board of Governors d. Federal Advisory Council

member banks

A corporation producing and selling without regard to national boundaries and whose business activities are located in several different countries is called a/an Select one: a. modified free enterprise economy. b. opportunity cost. c. multinational. d. comparative advantage

multinational

The nations monetary policy Select one: a. is determined by the Council of Economic Advisers. b. almost always complements presidential and Congressional aims. c. is tightly managed by Congress. d. often comes under attack from politicians.

often comes under attack from politicians

The largest category of nonrenewable energy in use in the United States is Select one: a. hydroelectric power. b. oil. c. natural gas. d. coal.

oil

This table keeps changes in real GDP from being overstated by adjusting for

population growth

A dip in real GDP per capita, such as the one shown for 1991 in the graph, could be caused by Select one: a. population growth during an economic expansion. b. population growth during a recession. c. population decline during a recession. d. population decline during an economic expansion.

population growth during a recesion

When money is easily transferred from one person to another, it is said to be Select one: a. durable. b. divisible. c. portable. d. accepted.

portable

The sequence for the approval of the federal budget is Select one: a. Congress to House Speaker to president. b. president to Congress and back to president. c. president to Congress to Supreme Court. d. House Appropriations Committee to Congress to president.

president to Congress and back to president.

Which of the following is represented with the federal minimum wage law

price floor

Tariffs and quotas can have all of the following effects EXCEPT Select one: a. promoting third-world development. b. increasing prices consumers pay for goods. c. reducing trade deficits. d. protecting domestic industry.

promoting third world development

Assets are Select one: a. properties, possessions, and claims on others. b. cash a bank owes to depositors. c. legal reserves. d. the same as net worth

properties, possessions, and claims on others

Investors who sign a contract guaranteeing them the option of selling shares of stock at a specified price in the future have agreed to a Select one: a. put option. b. spot option. c. call option. d. push option.

put optiion

Revenue tariffs are levied to Select one: a. raise money. b. increase imports. c. protect domestic producers. d. lower exports.

raise money

Nearly two-thirds of the world's known coal reserves are in the United States, Select one: a. Russia, and Poland. b. Poland, and Canada. c. Japan, and China. d. Russia, and China

russian and china

A market where existing financial assets can be resold to new owners is called a Select one: a. money market. b. capital market. c. primary market. d. secondary market.

secondary market

In which stage of development does the national income grow faster than the population? Select one: a. high development b. transition c. semidevelopment d. takeoff

semidevelopment

Workers who have the skills to operate machines and who require a minimum amount of training are

semiskilled labor.

The change from the old demand curve to the new demand curve shown in the table represents a

shift of the demand curve to the right

Where is the power to issue taxes granted to the federal government?

sixteenth amendment

The problem with Continental dollars, which were printed during the Revolutionary War, was that Select one: a. they were backed by individual states. b. they were backed by gold and not silver. c. so much was printed they became nearly worthless. d. they were fiat money.

so much was printed they became nearly worhtless

A stock transaction that is made immediately at the market price is made in the Select one: a. futures options market. b. options market. c. spot market. d. futures market.

spot market

Economists use numbers such as those in the table as a measure of Select one: a. net exports. b. national income. c. total dollar value of all final goods and services. d. standard of living.

standard of living

The Efficient Market Hypothesis argues that Select one: a. all investments are the same. b. every investment has some risk. c. stocks are usually priced about right. d. stocks are generally overpriced.

stocks are usually priced about right

Transfer payments from the government to individuals or other levels of government might be used to Select one: a. pay utilities. b. maintain the armed forces. c. purchase supplies. d. support Social Security

support social security

If a market is competitive and at equilibrium, if there is a sudden drop in demand, then a temporary

surplus will occur

The third stage of economic development is a period of Select one: a. takeoff. b. transition. c. semidevelopment. d. primitive equilibrium.

takeoff

investments in technology typically

tend to make production more efficient

Why can suppliers of goods can more easily shift the incidence of a tax to the consumer if the demand of the good is inelastic

the consumer needs the good regardless of the new price

Which of the following is TRUE concerning what the Fed might do if the nation were experiencing high unemployment rates and WHY? Select one: a. The Fed may pass a law in Congress asking for more money b. The Fed may increase the reserve requirements to keep money out of circulation. c. The Fed may raise interest rates to keep money in the banks to stifle investment. d. The Fed may lower interest rates to encourage businesses to expand, which may increase job opportunties

the fed may lower interest rates to encourage businesses to expand, which may increase job opportunities

Which of the following is correct regarding the structure of the Federal Reserve? Select one: a. The Federal Reserve has the power to pass taxes. b. The Federal Reserve is owned by the U.S. government. c. The Federal Reserve is completely free of any governmental control d. The Federal Reserve has a Board of Governors that helps supervise and regulate the Fed

the federal reserve has a board of governors that help supervise and regulate the fed

What is a negative consequence of the tariff illustrated in this graph? Select one: a. Because the tariff lowered the market price for the good, the quality of the good decreased. b. The government was unable to impose a tariff because the domestic market offered a cheaper price than the world market. c. The price that consumers pay for the good has increased because of the tariff. d. All of these are correct.

the price that ocnsumers pay for the good has increased because of the tariff

Which of the following is true concerning production in a free market economy?

the producer typically decides what to make by what he or she thinks will be in demand

If a certain mp3 player became popular, which of the following business decisions most reflects the way the producers of the player would act?

the producers would increase supply

Consumers willingness to replace a costly item with a less costly item is an example of

the substitution effect

When a producer makes more goods at every possible price

the supply curve shifts to the right

The par value of a bond is Select one: a. its purchase price. b. the stated interest on the debt. c. the total amount borrowed d. a rating of the quality of a bond.

the total amount borrowed

The United States trade deficit causes Select one: a. immediate worldwide recessions. b. the value of the dollar to fall in foreign exchange markets. c. the value of the dollar to strengthen in foreign exchange markets. d. increased employment opportunities for all Americans.

the value of the dollar to fall in foreign exchange markets

How are education and training part of economic planning? Select one: a. They are always rewarded with tax rebates b. The government pays for everyone's education and training c. They are the only wise way of saving d. They combine with experience to make human capital

they combine with experience to make human capital

How are education and training part of economic planning? Select one: a. they are always rewarded with tax rebates b. the government pays for everyone's education and training c. they are the only wise way of saving d. they combine with experience to make human capital

they combine with experience to make human capital

When a manufacturer of pain medication decreased the price of the medication by 30%, demand increased, but profits declined by almost exactly 30%. Demand for the product i

unit elastic

How does competition among buyers help dermine the price levels of goods?

when there are many buyers competiting to purchase a good, the price level tends to go up

There are two radically different ways for...a society to satisfy all their needs: by producing a lot, as in Western societies, or by not wanting a lot, as in those...anthropologist Marshall Sahlins has called "Zen" societies. The "Zen" way chosen by hunter-gatherer societies is to stop producing food as soon as...the quantity in hand has reached a level sufficient for their needs. ...Hunter-gatherers do not live in utter privation, nor are they constantly in search of permanently inadequate food. On the contrary, they may be said to have created "the first affluent society," spending only a few hours a day on meeting their material needs and keeping the rest of their time free for recreational and social activities. Source: Marie Roué, "An Economy of Sharing," UNESCO Courier, January 1998. Based on the passage, if you were to adopt a "Zen" lifestyle here in the United States, you would Select one: a. gather as much food as you could and store some for lean times. b. not work at all. c. work only as long as required to meet your survival needs. d. grow your own food.

work only as long as required to meet your survival needs

Suppose policymakers target a goal of continuous, stable economic growth without inflation. Where on the diagram does this goal belong? Select one: a. W b. X c. Z d. Y

x