economics
Beta can produce either ten apples or three oranges. Cama can produce either twelve apples or three oranges. Which of the following is true?
Cama has an absolute advantage in the production of apples.
Not only can the public's savings rate have a multiplier effect on economic expansion and growth in GDP, but also the
Executive Branch of the federal government and the Federal Reserve can have a multiplier effect on business growth and growth in the money supply.
In case of a bank failure, the funds of individual depositors are protected by the
FDIC
In a recession, fiscal policy calls for the government to decrease taxes and increase spending.
TRUE
The importance and influence of technology has made it essential
for young adults to get as much education and as develop as many skills as possible.
The economic goals of the American free-enterprise system include
freedom, equity, and growth.
Technology creates economic
growth and efficiency
Since economics is the science of choice, the Internet has
increased the number of choices available to us.
Technology has devalued labor and enhanced the value of
information and knowledge
The Federal Deposit Insurance Corporation (FDIC)
insures bank depositors' savings
Economic knowledge
is important in every job
The Agriculture Adjustment Act brought much criticism because
it offered farmers money to destroy crops and leave land uncultivated
The time periods between when an economic policy is decided to when it actually takes effect are called
lags
Which of the following was a cause of the recession of the 1980s?
large government deficits and increased consumer spending
Choose which economic rule states that the additional satisfaction people get from consuming one more unit of a product will lessen with each additional unit they consume
law of diminishing marginal utility
Which of the following is a function of our current banking system?
lnending money
As an economic term, land includes
natural resources
The labor movement resulted in
outlawing child labor, eight-hour work days, and safer working conditions
the economic prosperity of the 1920s
overproduction
President George W. Bush, the 43rd President of the United States believes
participating in the world economy makes the U.S. economy stronger
What economic concept do the Fourth and Fifth Amendments to the Constitution identify?
private ownership of property
A country has an absolute advantage when it can
produce more of a product than another country
An individual buys a finished product for the purpose of consumption in a
product market
In the United States, income tax is an example of a __________ tax, while sales tax is an example of a __________ tax.
progressive; regressive
The purpose of economic regulations in the United States is to
promote economic growth, stability, and equity
The Hawley-Smoot Tariff is an example of
protectionism
The purpose of the Montgomery GI Bill was to
provide economic assistance, including education and housing assistance, to all veterans
The Civilian Conservation Corps
provided work to single young men, requiring them to send most of the money home to their families
The North American Free Trade Agreement (NAFTA)
reduced trade barriers among the US, Canada, and Mexico
All money in the United States today is
fiat money.
What are the three functions of money? (Mark all that apply)
Standard of value, medium exchange and store of value
1) The __________ of President Coolidge brought short-term economic growth to the United States during the 1920s. 2)The use of the __________ rapidly reduced the price of automobiles, making them affordable to many more Americans. 3) The main cause for __________ in the 1920s was the large debts that countries such as Germany were forced to pay after World War I. 4)The decline of the __________ in the 1920s was one of the early warning signs of the Great Depression. 5) One of the main tools used by labor unions is __________. 6) The __________ virtually turned the United States' World War I economy into a command economy. 7)The __________ reflected the efforts of workers to improve their economic position.
1)laissez faire policies 2) assembly line 3)decline in foreign trade 4) agriculture industry 5)collective bargaining 6)war industries board 7) labor movement.
Choose which of the following describes a free enterprise system?
Individuals are free to own and control the factors of production
Why did the first national bank fail?
Many felt the national bank gave the federal government too much power, and Congress refused to renew the twenty-year charter in 1811.
Which statement describes the critical role played by profits in a market economy?
Profits encourage businesses to efficiently produce the things people want.
Hypothetical situation: The economy has been declining for six months. The unemployment rate has increased by 2 percent in the past six months, and many Americans are looking for work. Production has decreased and many businesses are simply not investing or hiring new workers. Consumers are saving (not spending) their money because they are worried about current events. From what you learned in this course, what is the most logical action for the Federal Reserve to take?
They should lower the discount rate and buy government securities in order to expand the money supply.
The Federal Reserve, our nation's central bank, has been using a practice called Quantitative Easing (QE).
This is implemented by printing money to buy or sell short term government bonds in order to keep interbank interest rates at a very low targeted value.
What event actually brought the United States completely out of the Great Depression?
WWII
Scarcity is a problem only for economies that use money as a medium of exchange.
false
Specialization does not promote economic efficiency because it increases the need for foreign trade.
false
The fundamental economic problem is the number of businesses that fail all over the world.
false
The pen has a high utility for a writer when the ink is dry and it does not write.
false
An import is
a good or service that is brought from a foreign country
Placing money in a checking account is an example of using money as
a store of value.
The economic prosperity of the 1990s was primarily due to
all of these
During the Cold War, the United States government spent large amounts of money
all of these are correct
In order to control inflation, governments may
all of these are correct
A labor union is
all of these are correct.
Specialization promotes efficiency of the world economy by
allowing nations to only produce the goods they produce efficiently
George Sparks has just been laid off. He had an excellent job as a computer programmer, but due to company cutbacks he lost his job. While looking for another job, he is able to collect unemployment insurance. This is an example of
an automatic stabilizer
The most significant legacy of the New Deal was
an increase in the size of the Federal Government and expansion of government
Economists are hired by private businesses to
analyze economic data
Members of the Board of Governors:
are appointed by the President with approval of the Senate.
Entry level economists typically must have a
bachelors degree
Electronic commerce, or e-commerce, has made it possible for
businesses to reach customers anywhere in the world.
NAFTA instituted a free trade policy between
canada, mexico, and the US
According to modern theory, it is beneficial for a country to trade a good with another country if one country has a(n) __________ in the production of that good.
comparative advantage
The War Industries Board
converted businesses to the war effort during World War I
Today money consists of
currency, checking and savings deposits.
President Ronald Reagan's new economic strategy, Reaganomics, included
cutting taxes and decreasing government spending
When the Federal Reserve decides it is necessary to expand the money supply they might
decrease the reserve requirement
John Maynard Keynes believed that all economic problems are caused by
decreases in business sector spending
The Environmental Protection Agency (EPA) impacts the economy by
developing and enforcing regulations that protect human health and the environment
Labor movement refers to the
efforts of workers to improve their economic position
The four factors of production are the resources of land, labor, capital and
entrepreneurship
The need to make choices arises because
everything that exists is limited
A baker purchases flour so he can make goods and sell them in his bakery. The baker purchased the flour in a product market.
false
Economic regulations help fulfill Adam Smith's idea of a laissez-faire economy.
false
Economics is an exact science.
false
Economics is the study of the flow of money in societies.
false
In order to become an economist you need only a high school diploma.
false
Monetary policy alone is a more effective economic policy than fiscal policy.
false
Monetary policy alone is the most effective economic policy.
false
One result of NAFTA is a decline in trade between the nations of North America.
false
The three Rs of the New Deal were
reform, relief, and recovery
What are the four main functions of banks today?
storing money, transferring money, lending money, and financial services
John Furry purchased a vacation package from a telephone solicitor. The person asked John for a two-hundred-dollar deposit via credit card in order to reserve his package. John gave the solicitor his credit card number, but he never received the vacation. The agency responsible for investigating this fraud is
the Federal Trade Commission
One of the most important economic results of World War I for the United States was
the United States moving from being a debtor nation to a creditor nation
Martha works at a retail store. She is paid by the store in a factor market and buys her clothing at the store in a product market. This cycle of individuals and businesses interacting is called
the circular flow of economic activity
The state of hostility that existed between the two world powers from World War II through the 1980s was called
the cold war
it offered farmers money to destroy crops and leave land uncultivated
the cold war
New technology and consumer spending created
the economic prosperity of the 1920s
Kelly, a rich businesswoman, finds that no matter how many pairs of shoes she buys, she can still find plenty more that she wants. Her salary only allows her to buy fifty pairs of shoes per year. She cannot buy as many shoes as she wants. Kelly is facing
the fundamental economic problem of scarcity
Crazy Eight is very excited because he is opening a new business. He purchased a building, equipment, a license, and computers, and he remodeled his building. He also was able to acquire a patent for his new idea. He invested all his savings in the new business and he is hoping his new business will take off. Crazy Eight was able to open this new business because
the government guarantees he is able to own property and ideas
In a trade-off, evaluate what the value of an opportunity cost is
the next best alternative
Economics can be defined as
the study of how people satisfy seemingly unlimited wants with scarce resources
You receive a coupon in the mail that gives you a free meal at your favorite restaurant. You go to the restaurant and enjoy your free meal. The next time you go to the restaurant, you notice the price of your favorite dish has been raised. This example illustrates the concept of
there is no such thing as a free lunch
What is the purpose of the Federal Reserve?
to regulate the money supply in order to create a stable economy
Bill Gates is an example of an entrepreneur because he developed a company and started a business.
true
In the United States, service jobs are the jobs of the future.
true
Monetary policy is the use of economic principles and programs by the Federal Reserve in order to control the money supply, availability of credit, and interest rates.
true
One of the main reasons for increasing economic regulations in the United States is the increasing population.
true
The chairperson of the Federal Reserve is said to be the second most powerful person in the United States.
true
The fundamental economic problem is that we do not have enough resources to satisfy all of our wants.
true
The opportunity cost of taking an unpaid vacation from work is the amount of money you would have made if you would have worked.
true
The primary and most used tool of the Federal Reserve is open market operations.
true
The terrorist attacks of September 11, 2001, caused a decline in consumer spending.
true
There is no such thing as a free lunch.
true
Fractional reserve banking makes it possible for banks to
use some deposits to make loans.
