Unit 4: economics

The economic inflation rate is steadily growing. The government thinks it is because of excess money in the economy. It decides to implement a contractionary fiscal policy to control inflation. What action might the government take as part of its contractionary fiscal policy?

a. increase government spending

How does the Federal Reserve reduce the money supply in the economy? Using monetary policy, the Federal Reserve increases to reduce the money supply in the economy.

contradictory, interest rates

Which of the following is an indicator of economic growth?

d. gross domestic product

The amount Ron is able to save when the government decided to cut the tax rate. This tax cut was a part of the government's policy.

decreased, expansionary policy

Sarah is shopping for groceries at the local supermarket. She paid for her groceries using a $100 bill recently issued by the US government. What type of money did Sarah use for this transaction?

a. commodity money

Tim feels cheated because an automobile dealer misled him by first advertising a car at a reduced price. When Tim said he wanted to purchase the car, the dealer told him that the price is no longer available and tried to convince him to buy the car at the higher price. Which agency is responsible for compelling the dealer to run corrected advertisements?

b. Federal Trade Commission

The government of country X found that farmers earned little profit by selling wheat to wholesalers at the market price of $5.50 per bushel. To help farmers, the government decides to the price of wheat. This adjustment is an example of government intervention through a .

increase, price floor

The state government offered Mike $300,000 for his family's property, which they plan to use for building a new development. The allows the state government to take the property as long as it is used . Mike can still dispute the government's offer if the compensation .

5th Amendment, non-profit, less than fair market value

Match each situation with the agency it involves.

a new miracle... Food and Drug each seat... National Highway Traffic Carrie's radio show... Federal Communications

What is the federal budget?

b. an estimate of the government's total revenue and spending

Under which type of policy does the government reduce its expenditures and increase tax rates?

b. contractionary fiscal policy

Recently, the government noticed that the consumption of cigarettes has increased among working individuals. To counter this increase, the government decides to raise the cost of cigarettes by increasing the excise tax on them. After six months, the government observes that the consumption of cigarettes has decreased to some extent. Which type of taxation did the government use?

b. indirect tax

Jack put his jeans in the washing machine to do his laundry. He forgot to remove a $10 bill from his pocket. When he removed his pants from the washing machine, the money wasn't torn. All he has to do now is dry the bill so he can use it again. Which characteristic of money does Jack's situation demonstrate?

c. acceptability

Which of the following are the responsibility of OSHA?

limit pollution caused by factories, protect the health of workers

policy is the actions taken by the to influence the real GDP and the inflation rate in the economy.

monetary, reserve bank

Which type of unemployment is Sarah experiencing? Sarah lost her job at the bank because the economy is in a . This layoff is an example of unemployment.

recession, cynical