Economics Unit Exams 1-5 Primavera
Which accurately describes events of the Industrial Revolution and subsequent emergence of capitalism? The Industrial Revolution created economic opportunities for the middle class (bourgeoisie) and the desire for profits without government interference. The Industrial Revolution resulted in better working conditions for people in the lower class and in fewer labor unions in France, Britain, and Spain. The Industrial Revolution led to the discovery of heliocentric theory, influencing the writing of the Magna Carta and the separation of church as state. The Industrial Revolution resulted in the reemergence of the Catholic Church oversight of European monarchs and capitalist opportunities.
The Industrial Revolution created economic opportunities for the middle class (bourgeoisie) and the desire for profits without government interference.
Read the sentence. A person visits the grocery store to buy the materials to make and sell fudge door-to-door. What factors of production are being used? only labor and capital all of the factors: land, labor, and capital only land and labor only land and capital
all of the factors: land, labor, and capital
When actively applying for a loan, what should you avoid doing with your credit? paying as much as you can afford to pay down credit cards and paying on time using your credit cards to complete a shopping spree at the local mall applying for new types of credit, such as credit cards or store cards calling your credit card company and asking for a lower interest rate
applying for new types of credit, such as credit cards or store cards
Why are many goods and services produced in a mixed market economy? government regulations mandate producers to provide a selection of goods or services businesses desire to make a profit based on the demands of their consumers a central command authority determines what will be produced and sold labor unions require members to provide a selection of goods or services
businesses desire to make a profit based on the demands of their consumers
Which section on your credit report could cause the most damage to your credit score? identifying information types of accounts collection items inquiries on accounts
collection items
Read the scenario. Company A uses social media to advertise, while company B places its product in the store. Which is an example of a push marketing strategy? company A company B both companies neither company
company B
What are variable costs? costs that can be negotiated in advance costs that remain the same no matter how much is produced costs associated with additional units of production costs that change based on production
costs that change based on production
What are fixed costs? costs that do not add value to product quality costs associated with producing additional units of a product costs that do not change based on production costs that vary based on the quantity of products produced
costs that do not change based on production
Which is the term for borrowing money to make purchases right away and then paying the money back later? credit capital debit savings
credit
What is the largest area of federal discretionary spending each year? veterans benefits social security space program defense spending
defense spending
(CHART) Last month, Diana traveled to another state for work. She used a non-bank ATM a total of eight times. How much in non-bank ATM fees will be charged to her account?
$16
Read the scenario. Rob is balancing his checkbook. His beginning checking account balance was $1. He deposited a check for $77 from his part-time job and $37 in cash that he received in tips into the account. Using his debit card, he purchased $25 worth of gas. On a night out with friends, Rob used his debit card to spend $8 on a movie ticket and $12 on snacks. Rob's mother told him that he needs to put money into a savings account. So Rob withdrew the tip money from his checking account and put it into a new savings account. What is Rob's checking account balance? $32 $69 $70 $33
$33
UNIT 2 EXAM QUESTIONS 1-30
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UNIT 3 EXAM QUESTIONS 1-30
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UNIT 4 EXAM QUESTIONS 1-30
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(TABLE) What explains the change in quantity demanded, from 12 to 24, as the price decreases? Consumers cannot afford more expensive products. Consumers will buy more at lower prices. Consumers will buy twice as much if the price drops by half. Consumers react to price increases by buying more.
Consumers will buy more at lower prices.
Which are fundamental principles of economics? (Select all that apply.) How will it be taxed? How will it be distributed? How will it be defended? How will it be produced?
How will it be distributed? How will it be produced?
How does the consumer price index help the consumer? It identifies tax loopholes in the US tax code. It provides information concerning interest rates. It compares the prices of items from month to month. It predicts future income tax rates for households.
It compares the prices of items from month to month.
Which is a disadvantage of a free market economy? It forces businesses to make choices. It requires government regulation. It does not provide public goods. It promotes intense competition.
It does not provide public goods.
Which government entities play a direct role in the US economy and compete with private businesses? (Select all that apply.) Federal Deposit Insurance Corporation (FDIC) United States Postal Service (USPS) Tennessee Valley Authority (TVA) Department of Homeland Security (DHS)
PARTAIL .67% United States Postal Service (USPS) Tennessee Valley Authority (TVA)
What is the result of government spending on higher education? Private universities lack research-based programs compared to public universities. Public universities have lower tuition rates than do private universities. Private universities have lower tuition rates than do public universities. Public universities are able to operate while running yearly deficits.
Public universities have lower tuition rates than do private universities.
Why do business owners have to answer the three economic questions? The answers determine the best way to use their resources. The answers are required by federal law. The answers are something banks want when they review a business plan. The answers help determine whether a resource is scarce.
The answers determine the best way to use their resources.
Which depict a negative externality? (Select all that apply.) There was an expansion of an airport, which caused greater levels of noise pollution. There was an expansion of an airport, which increased revenue for local restaurants. There was an expansion of an airport, which reduced unemployment in the surrounding area. There was an expansion of an airport, which decreased property values of nearby homes.
There was an expansion of an airport, which caused greater levels of noise pollution. There was an expansion of an airport, which decreased property values of nearby homes.
What is true regarding transfer payments? They are used by state governments to send money to the federal government. They do not result in the purchase of a good by the federal government. They are used to purchase goods for the federal government. They are not used to provide services from the state governments.
They do not result in the purchase of a good by the federal government.
What are steps that businesses typically take during a recession? (Select all that apply.) They increase production. They lower prices. They raise prices. They reduce production.
They lower prices. They reduce production.
How do business partners share liability? They share liability based on the partnership agreement. They share all liability jointly. They share liability based on who invested the most. They share liability only if ordered to by a court ruling.
They share all liability jointly.
What is true about the federal budget? Congress cannot remove anything from the budget unless the president agrees. Congress is required to balance the budget each year. The president can veto portions of the budget that are wasteful. The president develops it and presents it to Congress for approval.
WRONG!! Congress is required to balance the budget each year.
What does a low price signal about a potential producer/supplier? that it is financially viable for the producer to offer that product for sale that it will be easy for the producer to enter the market to offer that product that the producer may be creating a product shortage in a market that the producer might not find many consumers if it offers that product for sale
WRONG!! that it is financially viable for the producer to offer that product for sale
What is economic incentive in a free enterprise economy? People buy and sell products or services they want, which makes them happy. Buyers have the right to choose the goods and services they want and need. Businesses sell goods and services and people take jobs for income. Businesses have the right to own property such as cars, houses, and land.
WRONG!!! Businesses have the right to own property such as cars, houses, and land.
How is health insurance different from auto insurance? While several companies sell both types of insurance, businesses only have to provide their employees with auto insurance. While both types of insurance are required, if you do not have health insurance, you will be required to pay a fee on your taxes. People are required to have a minimum amount of auto insurance, which includes a deductible; people are required to have health insurance, but it does not include a deductible. Health insurance is required by the federal government; auto insurance is required by both the state and federal governments.
While both types of insurance are required, if you do not have health insurance, you will be required to pay a fee on your taxes.
In an even number of points exists in a set, how do you find the median? You calculate the mean and add it to the answer found for the mode. You add all numbers in the set and subtract by the total number of the set. You divide into quartiles and calculate the standard deviation. You find the mean of the two points in the middle of the set.
You find the mean of the two points in the middle of the set.
What are examples of nonbank financial intermediaries? (Select all that apply.) savings and loans finance companies life insurance companies credit unions
finance companies life insurance companies
Where would an allowance be reflected on a budget sheet? available to save income variable expenses fixed expenses
income
Which items are most likely to be highly elastic? (Select all that apply.) gasoline jewelry apples water
jewelry apples
Read the sentence. A high-priced product has not sold after an extensive ad campaign. What is the most effective solution to encourage sales? lower the price until the consumer creates a surplus of product lower the price until an equilibrium price has been established stay the course until the consumer eventually breaks down and buys ship the product back to the manufacturer and ask for a better product
lower the price until an equilibrium price has been established
What is the biggest disadvantage to setting up a sole proprietorship? the personal liability the legal paperwork the financial system the tax burden
the personal liability
Read the scenario. Alexa is balancing her checkbook before she leaves for college. She began with an account balance of $83. She deposited the $1200 that she earned from her summer job. She used her debit card to purchase a plane ticket back to college for $896. Going online, she was able to purchase all of her textbooks for $272. Then she put $115 into her meal account. What is the current balance in Alexa's checking account? $0 $83 $32 $115
$0
UNIT 5 EXAM QUESTIONS 1-30
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For the set {16,17,17,19,22,26,32,35}{16,17,17,19,22,26,32,35}, what is the median? 17.5 20.5 35 22
20.5
Which accurately describes advantages of a corporate business structure? (Select all that apply.) Owners of a corporation retain complete control of day-to-day business operations. A corporate business structure allows owners to raise capital by selling shares of stock. The business becomes a legal entity separate from the person or people who set it up. A corporation pays a corporate tax, and that rate may be lower than a personal income tax rate.
A corporate business structure allows owners to raise capital by selling shares of stock. The business becomes a legal entity separate from the person or people who set it up. A corporation pays a corporate tax, and that rate may be lower than a personal income tax rate.
Which accurately describes disadvantages of a corporate business structure? (Select all that apply.) Owners of a corporation have unlimited liability that includes their personal assets. A corporate business structure does not allow owners to raise capital by selling shares of stock. A corporate business structure has a lot more regulations, or laws, compared to other structures. Setting up a corporation is complex and may require the advice of an attorney or accountant.
A corporate business structure has a lot more regulations, or laws, compared to other structures. Setting up a corporation is complex and may require the advice of an attorney or accountant.
Which is a characteristic of the takeoff stage of Rostow's Five Stages of Economic Growth? Advancements in technology require a skilled labor force competent in electronics, medicine, and engineering. The population as a whole has its basic needs met and enjoys a high standard of living focused on consumer goods. A country begins to grow rapidly and new industries start to emerge that drive further economic development. The labor of a country is unskilled and focuses on agricultural production, animal husbandry, and the harvesting of timber.
A country begins to grow rapidly and new industries start to emerge that drive further economic development.
Which is true regarding elasticity of supply? A product's price does not play a role in its elasticity. An inelastic product will never become elastic. A product is either completely elastic or inelastic. A factor in supply elasticity is production difficulty.
A factor in supply elasticity is production difficulty.
In which situation is a consumer exercising consumer sovereignty? A person does not like the food served at a restaurant and chooses another restaurant. A person does not like the food served at a restaurant and refuses to pay. A person likes the food at a restaurant and attempts to copy the recipes at home. A person likes the food at a restaurant and recommends it to friends.
A person does not like the food served at a restaurant and chooses another restaurant.
Which accurately describes a principle argued by Adam Smith to drive a free market economy? Adam Smith argued for a traditional economy in which history and tradition determines manufacturing. Adam Smith co-wrote the Communist Manifesto with Karl Marx, which promoted communism. Adam Smith and Frederic Engels promoted socialism in which government owns manufacturing. Adam Smith argued for a laissez-faire economy that is free of government intervention.
Adam Smith argued for a laissez-faire economy that is free of government intervention.
Read the scenario. Jorge lives in a country that uses a progressive tax system in which his taxable income is taxed at a specific percentage. In 2016, Jorge made $90,000 and was taxed at 25 percent. He is due for a $5,000 raise in 2017. At that time, his tax bracket will change to 30 percent. Which is true regarding Jorge's financial situation after his raise? After the raise, Jorge will take home $5,000 more per year. After the raise, Jorge will take home $5,000 less per year. After the raise, Jorge will take home $1,000 less per year. After the raise, Jorge will take home $1,000 more per year.
After the raise, Jorge will take home $1,000 less per year.
What does the law of supply suggest? Prices affect demand but not supply. As prices increase, supply decreases. Prices are determined by the supplier. As prices increase, supply increases.
As prices increase, supply increases.
What is a major difference between banks and credit unions? Banks seek to make a profit for shareholders; credit unions are nonprofit. Banks charge fees for all of their services; credit unions do not charge fees. Banks tend to allow only certain people as members; anyone can open an account at a credit union. Banks are regulated by the Federal Deposit Insurance Corporation; there is no government oversight of credit unions.
Banks seek to make a profit for shareholders; credit unions are nonprofit.
When adjustable mortgage rates began to increase, what was the result? (Select all that apply.) Banks lowered mortgage rates to help people. Banks tightened credit restrictions again. Thousands of homes were foreclosed on. More mortgages were approved for customers.
Banks tightened credit restrictions again. Thousands of homes were foreclosed on.
Which correctly explains fixed expenses? Barbara purchased new clothes for the party this Saturday. Barbara attended a hockey game with her friends last month. Barbara refilled her car with gas after driving to San Diego for a concert. Barbara paid the rent on the first day of the month to keep her apartment.
Barbara paid the rent on the first day of the month to keep her apartment.
Read the scenario. Bill recently graduated from high school. He has decided to enter military service. Which statements best describe potential outcomes of joining the military? (Select all that apply.) Bill may receive tax credits if he earns a teaching credential following his military service. Bill may receive tuition assistance for school after serving for a certain number of years. Bill may have to pay higher taxes to repay the government for his military benefits. Bill may have access to job training while he is earning a salary in the military.
Bill may receive tuition assistance for school after serving for a certain number of years. Bill may have access to job training while he is earning a salary in the military.
What are examples of public disclosure required by the US government? (Select all that apply.) Car companies must provide information regarding gas mileage. Food products must have nutrition labels and lists of ingredients. Sin taxes are applied to alcohol and tobacco because they pose health risks. Real estate agents must disclose problematic information about a home to their clients.
Car companies must provide information regarding gas mileage. Food products must have nutrition labels and lists of ingredients. Real estate agents must disclose problematic information about a home to their clients.
Why would the government require businesses to disclose information to consumers? (Select all that apply.) Businesses could go bankrupt if they sell faulty products to consumers. Consumers often buy products without taking sufficient time to investigate them. Businesses may sell dangerous items to consumers in order to make a profit. Consumers may lack the level of knowledge to assess a threat on their own.
Consumers often buy products without taking sufficient time to investigate them. Businesses may sell dangerous items to consumers in order to make a profit. Consumers may lack the level of knowledge to assess a threat on their own.
Which is an accurate comparison of corporate income taxes and individual income taxes? Corporate income taxes are over twice as much as individual income taxes. Corporate income taxes are less than a quarter of individual income taxes. Corporate income taxes are just about equal to individual income taxes. Corporate income taxes are approximately 50 percent of individual income taxes.
Corporate income taxes are less than a quarter of individual income taxes.
How does the law of comparable advantage lead to international trade? Countries that have more resources are able to trade for a wider variety of items that can be offered for sale. Countries that do not engage in trade are in a stronger position economically than countries that do trade. Countries that cannot produce products efficiently have to trade for the goods and services that other countries have. Countries make products they can produce efficiently and are able to get the rest of what they need through trade.
Countries make products they can produce efficiently and are able to get the rest of what they need through trade.
What is the main advantage of a command economy? Everyone's basic needs are met. Careful planning prevents shortages and surpluses. There is a strong incentive to innovate. People have a variety of career choices.
Everyone's basic needs are met.
Which factors impact returns on investments? (Select all that apply.) level of diversification of a financial portfolio level of risk involved with the investment length of time of the investment length of time the broker has been licensed
GOT PARTIAL 75% WITH ONLY FIRST 3 ANSWERS level of diversification of a financial portfolio level of risk involved with the investment length of time of the investment length of time the broker has been licensed
What is the difference between government deficit and national debt? Government deficit is caused by poor laws; national debt is caused by too many taxes. Government deficit is money owed to other countries; national debt is a shortage of currency. Government deficit is solved by taxation; national debt is solved by taking out loans. Government deficit is a yearly discrepancy; national debt is accumulated over time.
Government deficit is a yearly discrepancy; national debt is accumulated over time.
Which best describes Adam Smith's view on economics and government involvement in business? He believed the Catholic Church should oversee a nation's business and commerce. He wrote The Communist Manifesto and believed the government should control commerce. He preached enlightened absolutism and the monarchy's control of business and commerce. He believed in a laissez-faire policy in which the government does not interfere in commerce.
He believed in a laissez-faire policy in which the government does not interfere in commerce.
Read the scenario. Miguel knows he wants to join the military. What should Miguel do before enlisting to help with employment after his service? (Select all that apply.) He should investigate training opportunities available while in the service and tuition assistance available afterwards. He should sign the paperwork, attend basic training, and see what training opportunities are available. He should take out a loan to help him pay for his future education options. He should speak with the recruiter about the specific opportunities and jobs that he will be able to pursue.
He should investigate training opportunities available while in the service and tuition assistance available afterwards. He should speak with the recruiter about the specific opportunities and jobs that he will be able to pursue.
Read the scenario. Larry needs a new computer because his old one just crashed. The computer he chooses costs $1,200. He has enough in his checking account to cover the cost. He also has a credit card with a $2,000 limit and $1,200 available on it. How should Larry purchase his new computer? He should use his credit card and pay extra interest since his checking account is now empty. He should use his debit card so that he does not risk paying extra money in interest over time. He should use his credit card because he gets points and does not need to pay back the card immediately. He should use his debit card, which will significantly reduce his future credit card options.
He should use his debit card so that he does not risk paying extra money in interest over time.
Read the scenario. Ronnie is 21 and has three credit cards, each of which has a balance. His debt-to-credit ratio is 80 percent, and he has applied for his first car loan. Why will his interest rate be higher than what is typical? His interest rate will be higher because he is 21, has perfect credit, and has proof of previous loans. His interest rate will be higher due to having several credit cards and a high debt-to-credit ratio. His interest rate will be higher due to having only three credit cards, which he pays each month. His interest rate will be higher because he has had a car loan in the past and made payments.
His interest rate will be higher due to having several credit cards and a high debt-to-credit ratio.
Which describes a way that gross domestic product (GDP) is used to measure the economy? If GDP increases for six months straight, a country is facing rapid inflation. If GDP decreases for six months straight, a country is in a recession. If GDP increases for 12 months straight, a country is in a contraction. If GDP decreases for 12 months straight, a country is in a trough.
If GDP decreases for six months straight, a country is in a recession.
Read the scenario. Kim received a small raise at work so that her salary went from $58,000 per year to $60,000 per year. She is concerned that it might move her to the next tax bracket. Why would Kim be concerned about that? If she moves into another bracket, she will no longer receive a tax return. If she moves into another bracket, she would be forced by law to use an accountant to file taxes. If she moves into another bracket, she will pay a higher percentage for a portion of her taxes. If she moves into another bracket, she can no longer use the 1040EZ.
If she moves into another bracket, she will pay a higher percentage for a portion of her taxes.
Which accurately describes a downside of the Tennessee Valley Authority Act? People had to move due to the damming of the river and reduced flooding. The Tennessee Valley Authority caused devastating air and water pollution to residents of the Tennessee Valley. The Tennessee Valley Authority increased healthcare costs to residents of the Tennessee Valley. Independent electric companies went out of business due to lower government rates.
Independent electric companies went out of business due to lower government rates.
Which is true about central banking in the United States? It began with the Banking Act of 1863. It ended with the passage of the Gold Standard Act of 1900. It began with the creation of the First Bank of the United States. It ended with the creation of the Federal Reserve Bank.
It began with the creation of the First Bank of the United States.
Which is true regarding consumer sovereignty? It is only present when there is perfect competition. It allows businesses to take advantage of consumers. It creates competition between buyers and sellers. It can be lost when monopolies are allowed to exist.
It can be lost when monopolies are allowed to exist.
How can a developing nation improve its economy if it lacks natural resources? It can default on loans owed to foreign banks. It can place high tariffs on all of its imports. It can flood foreign exchange markets with its currency. It can engage in international trade.
It can engage in international trade.
How can the World Bank help developing nations economically? It can provide loans to developing countries to build new infrastructures. It can protect and negotiate free trade deals between neighboring nations. It can sell medical drugs and other treatments to clinics at a very low cost, saving the patients money. It can work to remove serious health problems so resources can shift to economic growth.
It can provide loans to developing countries to build new infrastructures.
How does the federal debt impact the economy? It can slow growth by decreasing consumer confidence. It can slow growth by decreasing the tax rate. It can slow growth by decreasing the cost to borrow money. It can slow growth by preventing inflation.
It can slow growth by decreasing consumer confidence.
Which are characteristics of macroeconomics? (Select all that apply.) It examines how much is produced and the consumers' willingness to buy. It deals with the overall condition of the economy. It demographically measures the number of households demanding products or services. It measures exports and imports for international trade.
It deals with the overall condition of the economy. It measures exports and imports for international trade.
What are functions of the Federal Reserve? (Select all that apply.) It creates US coins. It enters US currency into circulation. It prints US dollars. It offers financial services within the government.
It enters US currency into circulation. It offers financial services within the government.
Why is scarcity a significant problem? It leads to opportunity cost. It requires people to conserve resources. It determines the type of economic system used. It forces people to make choices.
It forces people to make choices.
Why is the marketing mix important to advertisers? (Select all that apply.) It helps advertisers to spread the word about a product being available. It helps companies decide how long the product will take to be produced. It helps define a particular product and identify what makes it different. It helps determine how much money people will have to buy a product.
It helps advertisers to spread the word about a product being available. It helps define a particular product and identify what makes it different.
Why is most insider trading against the law? It creates opportunities for company employees that are not widely available. It allows government officials to profit on every stock trade. It helps insiders benefit from information that no one else can access. It hurts the economy by increasing the number of trades made in a short time.
It helps insiders benefit from information that no one else can access.
What are roles of the government in a mixed market economy? (Select all that apply.) It helps to prevent monopolies. It helps to ensure that prices are fair. It ensures businesses are able to make a profit. It enforces laws against false advertising.
It helps to prevent monopolies. It helps to ensure that prices are fair. It enforces laws against false advertising.
What is the purpose of the Tennessee Valley Authority? (Select all that apply.) It provides state-sponsored healthcare to citizens of the Tennessee Valley. It improves navigation along the Tennessee River. It generates and provides inexpensive hydroelectric power to the Tennessee Valley. It develops agriculture and forest land in the Tennessee Valley.
It improves navigation along the Tennessee River. It generates and provides inexpensive hydroelectric power to the Tennessee Valley. It develops agriculture and forest land in the Tennessee Valley.
How does a rise in life expectancy impact population growth? It slows population growth. It increases population growth. It reverses population growth. It does not impact population growth.
It increases population growth.
Read the sentences. An important function of money is to act as a store of value. Gold is excellent as a store of value. What is a difficulty with using gold as money? It is impossible to transport easily. It is not widely acceptable to people. It can deteriorate quickly. It is difficult to divide into smaller units.
It is difficult to divide into smaller units.
What is true regarding seasonal unemployment? It is likely to last longer than other types of unemployment. It is not as troubling to the government as other types of unemployment. It has negative costs similar to those of other types of unemployment. It is much harder to predict than other types of unemployment.
It is not as troubling to the government as other types of unemployment.
Read the statement. Country A is running a trade deficit. What must Country A do to reverse this trend? It must increase trade exports with other countries. It must hire more workers to increase products for export. It must print more money so people will spend more. It must continue the course it is currently following.
It must increase trade exports with other countries.
What is the function of a union? It negotiates strong salaries so that workers never have to go on strike. It works to pass right-to-work laws in all states so that anyone can get a job. It offers protection for workers who may have little power as individuals. It enforces legislation that ensures workers receive fair compensation.
It offers protection for workers who may have little power as individuals.
What is the purpose of a minimum wage? It offers a subsidy to workers whose job does not pay enough. It protects companies by setting a price ceiling for wages. It offers companies a subsidy when they cannot afford to pay high salaries. It protects workers by providing a price floor for wages.
It protects workers by providing a price floor for wages.
Which is an argument against the use of the ability-to-pay principal of taxation? People who earn more money have benefitted more from society. People are not willing to pay unless they receive something in return. It is difficult to determine who receives benefits from government spending. It reduces the incentive to work hard and take risks to succeed.
It reduces the incentive to work hard and take risks to succeed.
What is true about the United States national debt? It leads to rapid inflation and rising unemployment. It requires the government to pay large yearly interest payments. It has resulted in significant cuts to Social Security and Medicare. It was the cause of the 2008 housing market crash.
It requires the government to pay large yearly interest payments.
Read the scenario. A business sells widgets. Each week, it receives a shipment on Monday and is sold out by Tuesday. This leaves many people in the community without widgets. What should the business do to help the market reach equilibrium? It should increase the price of the widgets. It should ration the widgets so everyone gets one. It should lower the price of the widgets. It should offer coupons for the widgets
It should increase the price of the widgets.
How would a balanced budget amendment to the Constitution discourage deficit spending? It would change the budget process, so that Congress and the president have to collaborate. It would require that, in a new budget, expenses could not exceed revenue in most situations. It would prohibit Congress from adding any new funding to the president's budget. It would force repayment of the federal debt before another budget deficit would be allowed.
It would require that, in a new budget, expenses could not exceed revenue in most situations.
What is true regarding tax revenue at the state level? Many states rely on Medicare taxes to generate revenue. Many states rely on excise taxes to generate revenue. Many states rely on Social Security taxes to generate revenue. Many states rely on sales taxes to generate revenue.
Many states rely on sales taxes to generate revenue.
How do gross national product (GNP) and gross domestic product (GDP) differ? While GNP includes production by all people and businesses of a country, GDP only includes production within a country's borders. While GNP includes investments as well as production of goods and services, GDP only includes production of goods and services. (WRONG) While GNP includes imports and exports of goods and services, GDP only includes the net exports of goods and services. While GNP includes production of all goods and services, GDP only includes production of final goods and services.
NOT 100% SURE, 2ND ANSWER IS WRONG THOUGH While GNP includes production by all people and businesses of a country, GDP only includes production within a country's borders.
What are consequences of a weak dollar? (Select all that apply.) unemployment in import industries increase in the cost of imports unemployment in export industries increase in the cost of exports
PARTIAL .25% increase in the cost of imports unemployment in export industries
How might developing countries obtain funding? (Select all that apply.) They can attain microloans from neighboring countries. They can gain loans from private investors. They can obtain financial assistance from World Bank. They can acquire grants from foreign countries.
PARTIAL .5% They can attain microloans from neighboring countries. They can gain loans from private investors. They can obtain financial assistance from World Bank.
What does the FDIC do when a bank fails? (Select all that apply.) It prosecutes any bank owners who violated the law. It sells off a bank's remaining assets to settle any debts. It provides advice to consumers on choosing a new bank. It notifies depositors if their bank has been sold.
PARTIAL .5% SO TWO ARE WRONG It prosecutes any bank owners who violated the law. It sells off a bank's remaining assets to settle any debts. It provides advice to consumers on choosing a new bank. It notifies depositors if their bank has been sold.
What is true regarding local government budgets? (Select all that apply.) Expenditures include police and fire departments. Localities fund social security benefits for retired residents. Revenue comes from intergovernmental payments. Large portions of local budgets support elementary education.
PARTIAL .67% Expenditures include police and fire departments. Large portions of local budgets support elementary education.
How does the Federal Reserve stabilize and safeguard the nation's economy? (Select all that apply.) It implements American monetary policy. It regulates banks and defends consumer credit rights. It regulates and oversees the NASDAQ stock exchange. It distributes currency and oversees fiscal conditions.
PARTIAL .67% It implements American monetary policy. It regulates banks and defends consumer credit rights.
How do government benefit payments, such as social security and veteran benefits, help the economy? (Select all that apply.) They offer a safety net for people who may be struggling for some reason. They are a source of revenue that people use to consume goods and services. They provide individuals with the opportunity to further their education. They prevent inflation because the payments are modest in amount.
PARTIAL .67% They offer a safety net for people who may be struggling for some reason. They are a source of revenue that people use to consume goods and services.
What are the purposes of financial intermediaries? (Select all that apply.) enable people to day-trade stocks and bonds enable people to purchase a certificate of deposit (CD) enable people to earn a profit storing money enable people to store money in a safe place
PARTIAL .67% enable people to earn a profit storing money enable people to store money in a safe place
What are consequences of rapid inflation? (Select all that apply.) People postpone purchasing expensive items, such as homes, until prices drop. Individual purchasing power increases, which results in an increase in demand. Savings accounts become less desirable because interest earned is lower than inflation Individual purchasing power decreases, which results in a decrease in demand.
People postpone purchasing expensive items, such as homes, until prices drop. Savings accounts become less desirable because interest earned is lower than inflation Individual purchasing power decreases, which results in a decrease in demand.
What is the main advantage of a market economy? The government owns and manages production of goods and services. The government can force quick economic change by amending the constitution. Personal freedom allows people to innovate and allocate resources. Income gaps between the rich and poor are minimized.
Personal freedom allows people to innovate and allocate resources.
What impact can government policies have on the business cycle? Policies that lower taxes may cause an economic contraction. Policies that decrease spending may cause an economic expansion. Policies that raise interest rates may cause an economic contraction. Policies that lower interest rates may cause an economic contraction.
Policies that raise interest rates may cause an economic contraction.
Why would a business want to be in the diminishing returns stage of production? (Select all that apply.) Production is still getting additional total product. Production is close to maximum. Production is no longer necessary to add inputs. Production is no longer necessary to monitor inputs.
Production is still getting additional total product. Production is close to maximum.
Read the sentence. The government decides to raise taxes to spend more on programs. What effect will this most likely have on the economy? Raising taxes will increase inflation. Raising taxes will decrease aggregate demand. Raising taxes will increase aggregate demand. Raising taxes will decrease the market price equilibrium.
Raising taxes will decrease aggregate demand.
Why does nominal gross domestic product (GDP) sometimes seem larger than real GDP? Real GDP uses an accurate calculation, whereas nominal GDP does not. Real GDP includes inflation in its calculation, whereas nominal GDP does not. Real GDP counts only final products, whereas nominal GDP does not. Real GDP counts imports, whereas nominal GDP does not.
Real GDP includes inflation in its calculation, whereas nominal GDP does not.
Read the scenario. Joanne just changed jobs and has the option of receiving a paper check or using direct deposit. She has an account with a credit union 10 miles from her home and is a very busy person with little free time. Which is most appropriate for Joanne? She should drive to her credit union and deposit the check there using the automated teller machine. She should have her pay direct deposited so that she does not have to drive to the credit union every week. She should cash the check at the local check-cashing company near her house and pay the extra fee. She should stand in line at her local bank every week to cash her check in person.
She should have her pay direct deposited so that she does not have to drive to the credit union every week.
What is one benefit of term life insurance over whole life insurance? Term life payout always happens faster than whole life payout. Term life coverage is usually better than whole life coverage. Term life premiums are generally less expensive than whole life premiums. Term life policies make it easier to add beneficiaries than whole life policies.
Term life premiums are generally less expensive than whole life premiums.
How does the Federal Reserve Bank fit into the balance of power among the three branches of the federal government established by the Constitution? The Chair of the Federal Reserve is appointed by Congress and approved by the Supreme Court. The Chair of the Federal Reserve is elected by popular vote. The Chair of the Federal Reserve is appointed by the president and approved by the Senate. The Chair of the Federal Reserve is appointed in a secret meeting.
The Chair of the Federal Reserve is appointed by the president and approved by the Senate.
Why is federal oversight crucial to the operation of the Federal Reserve Bank? The Federal Reserve funds mandatory government expenditures. The Federal Reserve controls the nomination of legislators to committees. The Federal Reserve is the nation's central banking system. The Federal Reserve sets rules and regulations for the New York Stock Exchange.
The Federal Reserve is the nation's central banking system.
Read the scenario. Marc just turned 16 and is looking to purchase a vehicle. The bank will grant him a loan under the condition that he opens a checking account and has the monthly payment debited directly from his account. Why would the bank grant Marc the loan under these specific conditions? The bank is trying to lessen the possibility of default on the loan. The bank wants more of his money to make loans to other people. The bank hopes Marc will default and it can take possession of his car. The bank enjoys giving loans to young people at no charge.
The bank is trying to lessen the possibility of default on the loan.
Read the scenario. The federal government announced significant tax cuts, enabling people to keep a greater portion of their income. What will happen to the demand curve in this situation? The demand curve will shift down. The demand curve will shift left. The demand curve will shift right. The demand curve will shift up.
The demand curve will shift right.
What is an example of government expenditure that positively affects the economy? The government increases tariffs with foreign nations, resulting in a trade freeze. The government increases corporate taxes, causing prices of goods to increase. The government opens a military base in a small town, increasing demand for local products. The government increases regulations on the airline industry, increasing barriers to entry.
The government opens a military base in a small town, increasing demand for local products.
Which accurately describes a cause for inflation? The government places too much money into circulation. The government places too little money into circulation. The Federal Reserve requires banks to keep more money on reserve. The Federal Reserve raises interest rates and slows economic activity.
The government places too much money into circulation.
Read the sentence. The cost of lumber has increased 145 percent since last quarter. What is the most likely outcome in the furniture market? The market will see a rapid rise in inflation because inelastic products respond quickly to market forces. The market will see cost-push inflation because the increased cost of inputs force prices higher. The market will see demand-pull inflation because consumers need more of the product. The market will see no inflation because there has not been a change in personal income.
The market will see cost-push inflation because the increased cost of inputs force prices higher.
Which accurately describes advantages of a sole proprietorship? The owner of a sole proprietorship is able to sell stock to raise capital. The owner of a sole proprietorship has limited liability as the business pays all expenses. The owner of a sole proprietorship keeps the profits. The owner of a sole proprietorship has the freedom to make all business decisions.
The owner of a sole proprietorship keeps the profits. The owner of a sole proprietorship has the freedom to make all business decisions.
Why is tax reform needed in the United States? The tax system has become overly complex and is losing some of its efficiency. The existing system makes it impossible to collect enough revenue. The Constitution does not allow income tax collection even though it occurs. Current income taxes are regressive but need to become progressive.
The tax system has become overly complex and is losing some of its efficiency.
How could adding more efficient technology to the production process change a supply curve? The technology could cause a shift to the right as production costs increase. The technology could cause a shift to the left as production costs decrease. The technology could cause a shift to the right as production costs decrease. The technology could cause a shift to the left as production costs increase.
The technology could cause a shift to the right as production costs decrease.
Why would wealthy nations have an interest in the development of poor nations? (Select all that apply.) It leads to migration between the countries. They feel an ethical or moral obligation to do so. It opens up new markets for goods and services. They want to improve tariff revenues with imports.
They feel an ethical or moral obligation to do so. It opens up new markets for goods and services.
What role do state governments play in funding education? They play a minor role in funding education. They are the sole providers of education funds. They fund only institutions of higher education. They provide significant funds for education.
They provide significant funds for education.
What is true of labor unions? They focus on increasing business productivity to increase employment. They support corporate tax cuts so that employee wages of its members will rise. They use collective bargaining to gain rights for worker salaries and workplace safety. They work toward worker safety at the state level and avoid most federal issues.
They use collective bargaining to gain rights for worker salaries and workplace safety.
If a product is inelastic, how will consumers likely respond to a price increase? They will initially increase their purchasing and stock up on the product. They will continue to purchase the product and decrease other purchases if necessary. They will find a substitute for the product and purchase that instead. They will stop purchasing the product and wait until the price comes back down.
They will continue to purchase the product and decrease other purchases if necessary.
How does total revenue differ from marginal revenue? Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money left after expenses have been paid. Marginal revenue is a measure of all the money a business makes, whereas total revenue measures the money left after expenses have been paid. Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money from one additional unit. Marginal revenue is a measure of all the money a business makes, whereas total revenue measures the money from one additional unit.
Total revenue is a measure of all the money a business makes, whereas marginal revenue measures the money from one additional unit.
Why were businesses opposed to labor unions during the late 1800s and early 1900s? Unions demanded higher pay and safer working conditions for workers, which cut into a company's profits. Unions demanded that businesses adopt laissez-faire practices and forbid government interference in private business. Unions demanded lower income tax rates for workers and higher corporate tax rates for businesses. Unions demanded the federal government adopt a command economic system in which it owned all manufacturing.
Unions demanded higher pay and safer working conditions for workers, which cut into a company's profits.
Which is an example of regional cooperation to promote economic growth? Neighboring countries sign a pact to limit immigration into their countries. Neighboring countries negotiate tariffs and duties regarding trade. Neighboring countries set up quotas on resources that can be sold. Neighboring countries remain separate but work together to promote peace.
WRONG!! Neighboring countries set up quotas on resources that can be sold.
Read the scenario. A United States company produces widgets in Brazil. Which is true about the calculation of widget production? The dollar value of the widgets would be included in a GDP calculation. The dollar value of the widgets would be included in a GNP calculation. The dollar value of the widgets would be included in both a GNP and a GDP calculation. The dollar value of the widgets would not be included in either a GNP or a GDP calculation.
WRONG!! The dollar value of the widgets would be included in both a GNP and a GDP calculation.
What are possible consequences for not monitoring your budget? (Select all that apply.) You may run low on available money to spend. Your 401(k) account will have plenty of money for retirement. Your ability to save and invest for the future may be negatively affected. You will be able to pay for any unexpected expenses that arise.
You may run low on available money to spend. Your ability to save and invest for the future may be negatively affected.
What do traditional and command economies have in common? a focus on innovation rather than stagnation a focus on the community rather than the individual a focus on agriculture rather than technology a focus on self-interest rather than the community
a focus on the community rather than the individual
Which accurately describes a money market account? a retirement package offered strictly to government employees part ownership of a company, purchased from a brokerage house a savings account at a bank that requires a high minimum balance securities purchased as a group through an investment firm
a savings account at a bank that requires a high minimum balance
What is automatic bill pay? a system people can use to have their bills paid each month from their bank account a system the government uses to make sure people pay their property taxes a system companies use to receive past-due funds that people owe a system banks use to ensure that people pay the fees they owe for account overdrafts
a system people can use to have their bills paid each month from their bank account
Which accurately describes a 401(k) plan? an IOU issued by the government promising a fixed rate of return a tax deferred retirement plan offered by employers US government securities purchased as a group through an investment firm a security that represents part ownership of a company
a tax deferred retirement plan offered by employers
What is the Government Accountability Office (GAO)? a private agency that advises the dent about fiscal policy an internal review agency of the Federal Reserve used to promote its mission an independent agency that answers to Congress and audits the Federal Reserve a government agency that answers to Congress and audits the United States Mint
an independent agency that answers to Congress and audits the Federal Reserve
Read the passage. This is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy. It provides information about price changes in the nation's economy to government, business, labor, and private citizens, and it is used by them to help guide economic decisions. What is being described? producer price index consumer price index import price index export price index
consumer price index
What is the primary tool used to measure inflation? durable goods shipments consumer price index gross national product gross domestic product
consumer price index
Read the scenario. June has $8,000 in an online savings account at six percent interest. She needs to reach $10,000 to pay off her credit cards. How long does June have to save to reach her goal? three years six years five years four years
five years
Social welfare programs enacted by the government to help people in need focus on which primary areas? (Select all that apply.) housing medical care food tuition assistance
housing medical care food
What do savings and loans specialize in? making real estate loans accepting very large deposits offering high-interest deposit accounts selling a variety of securities
making real estate loans
Which is an example of a price floor? annual raise pay deduction minimum wage rent control
minimum wage
Which type of competition is characterized by differentiated products? monopolistic competition oligopoly monopoly perfect competition
monopolistic competition
Read the sentence. You own a greeting card startup business with a limited advertising budget. Which form of advertising offers the greatest benefit at the lowest cost? online, because it reaches the widest consumer base and is cost-effective television, because it reaches the widest consumer base once production costs are met newspaper, because it reaches a small but educated subscriber base in most markets radio, because it has a focused consumer base and is cost-effective
online, because it reaches the widest consumer base and is cost-effective
Which action by the government would promote competition among firms? passing legislation that prevents price-fixing increasing oversight and ownership of public utilities enacting government policies described by Friedrich Engels repealing antitrust laws enacted by the Senate
passing legislation that prevents price-fixing
What is the main job of the Securities and Exchange Commission (SEC)? protect investors protect banks protect corporations protect brokers
protect investors
What is a potential negative outcome when the government seeks to ensure specific market outcomes? lack of consumer protection regulations that slow down innovations unpleasant information shared by businesses decrease in business tax incentives
regulations that slow down innovations
What are examples of banking financial intermediaries? (Select all that apply.) savings and loans commercial banks credit unions stock brokerages
savings and loans commercial banks credit unions
Which type of discretionary spending usually has wide support? spending that provides health care spending associated with entitlement programs spending that helps a large group spending that helps a specific group
spending that helps a large group
How are exchange rates determined in a flexible exchange rate system? supply and demand US dollar compared to the euro US dollar compared to the pound inflation and deflation
supply and demand
Who appoints the Board of Governors of the Federal Reserve System? the US President the US House of Representatives the US Senate the US Supreme Court
the US President
Read the scenario. Sally wants a new exercise machine but does not want to pay for it right away. She has a private label card with a sporting goods store offering zero percent interest for six months and then 29 percent interest. She also has a general-purpose card offering 16 percent interest after 30 days. She will receive a bonus from work in three months that will cover the cost of the machine she wants. Which is her best choice to pay the least amount of interest? the general-purpose card a payday loan the private label card a cash advance
the private label card
What is elasticity of supply? the difference between a shortage and a surplus for a product the difference between fair market value and market equilibrium the relationship between a change in price and a change in quantity supplied the relationship between a change in price and a change in consumer demand
the relationship between a change in price and a change in quantity supplied
When might a country produce a product even though it cannot do so efficiently? (Select all that apply.) to ensure national security to ensure a trade deficit to minimize the sale of exports to increase the balance of trade
to ensure national security to increase the balance of trade
Why would the government set a price floor for wages? to promote a livable working wage to avoid high unemployment to stimulate the economy to protect small businesses
to promote a livable working wage
What reasons do protectionists cite most for restricting trade? (Select all that apply.) to protect US infant industries that tend to have high production costs to protect US taxpayers from increased income and corporate tax rates to protect national security and prohibit US reliance on other countries to protect US jobs due to cheap labor in other countries
to protect US infant industries that tend to have high production costs to protect national security and prohibit US reliance on other countries to protect US jobs due to cheap labor in other countries
Why does money need to be in limited supply? it is tied to gold it is tied to commodities to prevent counterfeiting to protect its value
to protect its value
Which type of bond is considered the safest and offers the least amount of risk? treasury bond corporate bond municipal bond foreign bond
treasury bond
Read the sentence. The three basic economic questions everyone must answer are _[blank]_. Which most accurately completes the sentence? how much money to make, how to produce, and where to sell what to produce, how to produce, and for whom to produce when to produce, what to produce, and where to produce how to produce, how much to produce, and where to sell
what to produce, how to produce, and for whom to produce
Read the sentence. Julian has an ATM card with his local bank and travels out of state. What features can he use out of state? (Select all that apply.) withdraw some cash make purchases check his balance apply for a loan
withdraw some cash make purchases check his balance
