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American Foundations Cycle II
American Foundations Cycle II
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A prep quiz for the American Foundations Cycle II exam
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
Which is
NOT
an internal control?
Rules
Inspections of products
Regulations
Limited international trade
2
What is an economic, or market, bubble?
Trade (in an asset) at a price that exceeds the true value.
As supply of a product decreases, its price increases.
Trade (in an asset) at price that falls below the true value
Caused by a stock market crash.
3
Selling beef that is infected with e coli deals with which market weakness?
Imperfect Information
Externalities
Poverty
Instability
4
Broulims goes out of business because of Walmart. This deals with which market weakness?
Disruption
Inequality
Negative Externality
Monopoly
5
According to his book, "
The Vital Center
," where is success found?
In the middle ground between tyranny and anarchy
In the middle ground between man and women
In the middle ground between communism and fascism
In the middle ground between democracy and communism
6
Who is Milton Friedman?
Economist with the monetarist view point
Economist during World War II
Economist with a strong belief in keynesianism
Economist during the Great Depression
7
What is the remedy for this market weakness (imperfect information)?
Provide Basic Welfare
External Controls
The Internet
Internal Controls
8
What is the result of a price floor?
Inflation
Shortage
Surplus
Cheaper products
9
Where do both curves meet (the blue dot at the center of the X)?
Equilibrium Point
Greenspan Point
Focus Point
Break-Over Point
10
What are the seven weaknesses of the free market economy?
Pick me
Do not pick me
11
What are the possible negative consequences of an increase in money supply?
Inflation and surplus
Inflation and stock market crash
Inflation and "bubbles"
Inflation and shortage
12
According to Keynesianism, what causes economic downturns?
Surplus of goods
Shortage of goods
Insufficient demand.
Insufficient supply
13
Who was Arthur M. Schlesinger, Jr.?
French Historian
German Historian
British Historian
American Historian
14
According to Keynesianism, what can prevent, or stop, economic downturns?
Increase $ supply and lower interest rates.
Decrease the money supply
Cutting taxes and more government spending.
Less government spending
15
Who presented the idea that "political extremism" is the problem with socialist economies?
Joseph Smith
Adam Smith
Arthur M. Schlesinger, Jr.
Spencer W. Kimball
16
What is minimum wage?
Price Ceiling
Price Floor
17
What are External Controls?
Limited international trade
Lawsuits
Taxes
Government prevention of regulations.
18
What book did Max Weber write?
The Origin of Wealth
The Theory of Religious Economy
Religion and the Rise of Capitalism
The Protestant Ethic and Spirit of Capitalism
19
Using a new road that was made by the government deals with which market weakness?
Positive Externality
Negative Externality
Inequality
Business Cylce
20
Which Fed chairman helped cure inflation during the late 70's?
Paul Volcker
Andrew Carnegie
Milton Friedman
Alan Greenspan
21
What book did Adam Smith write?
The General Theory of Employment, Interest, and Money
The Wealth of Nations
A Monetary History of the United States
The Spirit of Capitalism
22
What is the first fallacy of free market? (mentioned in class)
Self-Centered = Pride
Self-Interest = Selfish
Helping Others = Helping Yourself
Free Gift = Stagnation
23
What happens when someone specializes in a certain trade or skill?
Lowers the marginal opportunity cost of production.
Become unreliable elsewhere, which lowers the economy.
Their trading options become limited.
Cost goes up. (due to improved quality)
24
What is the remedy for this market weakness (Externalities)?
Internal Controls
External Controls
Provide Basic Welfare
25
What is the second fallacy of free market? (mentioned in class)
Competition is bad
Cooperation = Consumer Rules
Competition = Monopoly
Cooperation is bad
26
Who was John Maynard Keynes?
British Economist
German Economist
American Economist
French Economist
27
What was his philosophy?
Keynesianism
Monetarism
Post-Scarcity Economics
Classical Economics
28
What was his thesis? (or Philosophy)
Beliefs determine economics
The Supply and Demand Curves
Monetarism
The Invisible Hand
29
Which was part of Adam Smith's philosophy?
Beliefs Determine Economics
The Invisible Hand
The Supply and Demand Curves
Monetarism
30
What is a Chaos Economy?
An economy with unpredictable government intervention
An economy of disorderly bidding
An economy in which criminal's prevent free exchange
An economy based of force by the military
31
What is the fourth fallacy of free market? (mentioned in class)
Zero Sum
Nature Satisfied
Culture Contamination
Value Neutral
32
What book did he write?
A Monetary History of the United States
The General Theory of Employment, Interest, and Money
The Spirit of Capitalism
The Rise and Fall of American Growth
33
Which Fed Chairman increased money supply after "Crash of 87"?
Paul Volcker
Janet Yellen
G. William Miller
Alan Greenspan
34
What is a Command (Planned) Economy?
Governments agree to trade with eachother
People use their property how they want
Socialism
The government controls trade and other economic activity
35
Which does
NOT
happen when the Fed Increases the money supply?
Economy is stimulated
Money holds its value indefinately
Bank failure is prevented
Interest rates lower
36
What is the secret to wealth?
Natural Resources
Rich Parents
Smart Government Control
Free Exchange
37
Are external controls good or bad for a free market economy?
Good
Bad
38
Match these words with their representations on the graph:
price, quantity, supply, demand.
A, B, Curve 2, Curve 1
A, B, Curve 1, Curve 2
B, A, Curve 2, Curve 1
B, A, Curve 1, Curve 2
39
Who was Andrew Carnegie?
Opposed philanthropy
Eventually owned all the oil companies.
Scottish immigrant that became the richest man in 1900's
Inherited a fortune, including a steelmaking company.
40
What book did Milton Friedman and
Anna Schwartz
write?
The Rise of Capitalism
A Short History of Financial Euphoria
Monetary History of the United States
The Rise and Fall of American Growth
41
What is the result of a price ceiling?
Surplus
More expensive products
Inflation
Shortage
42
Which is
NOT
one of the functions of money?
Unit of Account
Medium of Exchange
Unit of Interest
Store of Value
43
Who was Max Weber?
Scottish Economist
German Sociologist
American Economist
British Economist
44
Who presented the idea of a Charter City on TED talks?
Joseph Pine
Alan Greenspan
Tim Jackson
Paul Romer
45
What are the three economic systems?
Capitalist, Chaos, Command (Planned)
Free Market, Socialist, Democratic
External, Free Market, Internal
Free Market, Government Market, People's Market
46
What is the third fallacy of free market? (mentioned in class)
Profit = Greed
Greed = Unhealthy lust for money
Free Market System = Poor get richer
Free Markets = Evil Incentives
47
What is the remedy for this market weakness (Disruption)?
Provide Basic Welfare
External Controls
Internal Controls
Life Insurance
48
What is Monetarism?
Increase interest rates to combat economic recession.
Increased money supply causes an increase in interest rates
Changes in money supply can determine economic performance
Decrease money supply to combat economic recession
49
Who said, "self-aggrandizement . . . is a correct principle . . . ?"
Brigham Young
Adam Smith
Andrew Carnegie
Joseph Smith
50
Who is Adam Smith?
British Economist
German Sociologist
American Economist
Scottish Economist
