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Economics Final
Economics Final
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An Economics Quiz to help prepare for the final exam.
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
The place where supply meets demand is called
Prime investment
Equilibrium
Central Cost
Middle
2
What is the fundamental problem that economics deals with?
scarcity
unemployment
inflation
recession
3
The flow of finished goods and services from businesses to households primarily takes place in the
Intermediate Good Market
Factor Market
Financial Market
Product Market
4
A market structure with only one seller of a product is
a monopoly
monopolistic competition
an oligopoly
perfect competition
5
The philosophy that a government should not interfere in economic activities is known as
elasticity
laissez-faire
globalization
communism
6
Selling a stock for more than the original price paid is called
inflation
a capital loss
a capital gain
a dividend
7
What does APR stand for?
Annual Percentage Rate
Annual Pricing Rate
Annual Policy Rating
Annual Population Rate
8
A diagram used to show the exchange of goods between households and firms in a market economy
production possibilities curve
supply and demand curve
Lorenz Curve
circular flow model
9
When a change in price causes a small change in the quantity produced, supply is
inelastic
unitary elastic
unpredictable
elastic
10
Expansion, peak, contraction, and trough are the four phases of
development
monetary policy
the business cycle
unemployment
11
What is the term for the dollar value of all final goods produced in a country in a given year?
marginal revenue
exchange rate
gross domestic product
capital
12
What is the situation that occurs when demand is greater than supply?
inflation
shortage
surplus
equilibrium
13
When consumers are forced to buy fewer goods as a result of a price increase in another product
demand effect
substitution effect
marginal effect
income effect
14
The cost of borrowing money is called
interest
principal
the required reserve ratio
monetary policy
15
What is the term for a period where real GDP declines for 6-18 months in a row?
inflation
expansion
depression
recession
16
In a market economy, who decides what goods and services are produced?
Congress
consumers
local government
producers
17
Which cause of inflation occurs when rising prices of inputs (energy) cause prices to increase?
wage-price spiral
cost-push inflation
demand-pull inflation
excessive monetary growth
18
What are the three basic economic questions?
How much, from whom, and when to borrow?
When, where, and why to produce?
What, how, and for whom to produce?
When, how, and with whom to trade?
19
Which of the following can lead to a change in supply?
Consumer tastes and advertising
The price of related substitutes
Changes in resource prices
Changes in population
20
A form of business organization that sells stock, recognized by law as a separate legal entity.
corporation
non-profit
partnership
sole proprietorship
21
Changing monetary policy to expand or contract the money supply will cause
government revenues to change
interest rates to change
the national debt to change
supply and demand to change
22
The branch of economics that deals with the economy as a whole
performance economics
microeconomics
consumer economics
macroeconomics
23
What are the four factors of production?
land, labor, capital, and entreprenuership
resources, money, investment, and trade
What to produce, how to produce, when and for whom to produce.
traditional, market, mixed, and centrally planned
24
When an economy is utilizing resources to their full potential, they are operating at their
peak of the business cycle
supply and demand equilibrium
production possibilities frontier/curve
per capita GDP
25
The idea that an investor should put their money into many different assets to reduce risk
deficit spending
equity
portfolio diversification
fiscal policy
26
The Law of Supply says producers will offer _______ of their product as the price goes up.
all answers are wrong
more
less
the same amount
27
What is the situation where prices are stable, and supply is equal to demand?
shortage
surplus
equilibrium
expansion
28
What is the situation that occurs when supply is greater than demand?
shortage
equilibrium
surplus
inflation
29
What type of unemployment increases and decreases with changes in the business cycle?
structural
seasonal
frictional
cyclical
30
The idea that countries should specialize and trade is supported by
the law of comparative advantage
the theory of absolute advantage
Classical economics
the law of increasing costs
31
Which of the following is NOT one of the 6 Economic Goals?
Growth
Equity
Control
Security
32
A tax on goods and services imported into the country?
quota
Import
Export
tarrif
33
How does inflation have an impact on economic decisions?
It can cause severe declines in the stock market
Money loses value, which reduces your purchasing power
People are forced to rely on government assistance
It can cause people to lose jobs and relocate their families
34
Which of the following is NOT one of the reasons why nations trade?
natural resources are scarce
unequal resource distribution
all countries want to help each other
availability of capital
35
What is the most commonly used monetary policy tool?
the required reserve ratio
the discount rate
open market operations
the crowding-out effect
36
Which institution is the safest of all financial assets to invest in?
Corporations (corporate bonds)
City/State governments (municipal bonds)
Junk Bonds
the Federal Government (bonds)
37
What is the largest source of revenue for the federal government?
corporate income tax
intergovernmental revenue
individual income tax
sales tax
38
According to the law of demand, an increase in price will cause
a decrease in demand
an increase in demand
increased demand for complements
reduced demand for substitutes
39
An increase in the number of consumers in the market place does what
Decreases quantity demanded
Increases demand
Decreases quantity supplied
Decreases supply
40
Which of the following is NOT a disadvantage of owning a sole proprietorship?
They often have limited life
They often have limited managerial experience
Owners have limited control over business decisions
Owners have unlimited liability
41
A board of governors, 12 district banks, and 2,500 member banks and institutions are part of
the Federal Reserve
the World Trade Organization
the Federal Deposit Insurance Corporation
the International Monetary Fund
42
What is term for the expense of the next best alternative use of time, money, or resources?
trade-off
capital
opportunity cost
inflation
43
A form of business organization that combines elements of sole proprietorships and corporations
cooperative
franchise
partnership
non-profit
44
The use of government spending and taxes to influence the economy is known as
fiscal policy
monetary policy
budgetary policy
reserve policy
45
What type of economy has most factors of production owned by a government?
mixed
command
traditional
market
46
Which of the following is the best example of a fixed cost?
Ingredients
Rent
None of the above
Labor
47
A market structure in which a few very large sellers dominate the industry is
a monopoly
monopolistic competition
an oligopoly
perfect competition
48
When a change in price causes a large change in the quantity purchased, demand is
inelastic
unitary elastic
elastic
unpredictable
49
A Price Floor will always cause ____________?
Equilibrium
More demand than supply
Surplus
Shortage
50
According to the law of supply, when the price of an item goes up
the supply will decrease
the supply will change unpredictably
the supply will increase
the supply will not change
