How do new tax policies impact workers?

it can effect the net pay of workers, influencing their spending and saving

What is an employee benefit package?

it typically includes things like salary and health insurance

What are tariffs and what do they do to imported goods?

taxes on imports that increase consumers prices

How do incentives affect consumer behavior?

a sale on shoes encourages people to buy more shoes

What is social security?

government program that provides financial support to retirees

What is an oligopoly?

market structure with a few large producers & many barriers to entry

What does making a choice mean in economics?

selecting one option over others due to limited resources

What are import quotas and what are the primary purposes of them?

to limit the amount of a good entering a country

What are the positives related to entrepreneurship in society?

entrepreneurs can create jobs and drive economic growth

How do governments protect consumers?

enforces laws to protect consumers from unsafe products

What is the primary role of banks in a market economy?

provide financial services like loans and savings accounts

How does minimum wage impact consumers?

increase to minimum wage may typically results in higher prices

What are some examples of how to use a marginal analysis in a business decision?

comparing the additional cost and benefit of hiring one more worker

market structure where a single producer significantly controls prices

What are the consequences of government subsidies?

can lead to overproduction of certain goods

What is elasticity and what does it measure?

measure how much quantity demanded or supplied changes with price

What is the law of demand?

it states that when prices increase consumers will demand less

What is the equilibrium price in the market?

point where supply and demand are equal

What is the unemployment rate?

indicator to determine the percentage of the labor force that is jobless

What does the federal government do with it’s revenue?

supply government services and public goods

What is the Federal Reserve in the US and what does it do?

regulates the supply of money and interest rates

How do local and state governments generate revenue to supply public services?

collects taxes from citizens and businesses

What are interest rates and how are they used?

this refers to the cost of borrowing money & it's how lenders make a profit

How do entrepreneurs assess the risks AND rewards of starting a new business?

they must weigh potential profits against possible losses

What are the determinants of supply?

those things other than price that affect the supply of goods and services

What is an income tax?

tax on the income individuals earn for the work they perform

What are the effects of implementing price controls on a good or service?

they can lead to shortages if the controlled price is set too low

In the circular flow model, what is the relationship between households and businesses?

households provide labor to businesses and received wages in return

Which of the following are characteristics of a command economy?

government controls the production and distribution of goods and services

What is an excise tax?

tax on specific goods or services, often those considered luxury items

What does GDP measure?

dollar value of all final goods and services sold in a nation

How do stable money and interest rates affect the economy?

they help economies growth and thrive

What is the main purpose of labor unions in a market economy?

advocate for workers' rights and better working conditions

How does inflation affect purchasing power?

inflation causes the value of money to decrease over time

What is one impact of transitional economies, like those of China and India, on the global economy?

these nations help lead global competition and innovation

What is the role of corporations in a market economy?

businesses owned by shareholders and managed by a board of directors

What is per capita GDP?

it indicates the average economic output per person

What are the determinants of demand?

those things other than price that affect the demand for a good or service

What can governments do to address a market failure?

to correct negative externalities like pollution

the rate at which the general price level for goods and services rises

What is economic growth?

when production and sale of good and services increases over time

What is the international monetary fund (IMF) and what do they do?

it offers short-term loans to countries facing balance of payments problems

How doe currency rates affect trade?

an increase in the value of a nation's currency makes its exports cost more

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Econ Exam Review

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Questions 77

Answers

1
Which type of economy is characterized by competition and freedom of choice?
traditional
command
mixed
market
2
How do new tax policies impact workers?
it only affects government revenue, not workers
it has no impact on workers' spending habits
it only affects businesses, not workers
it can effect the net pay of workers, influencing their spending and saving
3
What is an employee benefit package?
it typically refers to the # of sick days employees receive while employed
it typically includes things like salary and health insurance
it typically refers to the # of vacation days employees received
it typically refers to the type of company car employees are issued
4
What are tariffs and what do they do to imported goods?
taxes on imports that decrease consumers prices
taxes on imports that allow for only certain goods to be imported
taxes on imports that increase consumers prices
taxes on imports that increase the demand for certain goods to be imported
5
How do incentives affect consumer behavior?
a sale on shoes encourages people to buy more shoes
a sale on shoes only affects shoe manufactures
a sale on shoes discourages people from shopping
a sale on shoes has no effect on consumer behavior
6
What is social security?
government program to protect our boarders
government program to help individuals to start a business
government program that provides financial support to retirees
government program to provide health care for the elderly
7
What is an oligopoly?
market structure where a single producer significantly controls prices
market structure with perfect competition
market structure with a few large producers & many barriers to entry
market structure where a large # of producers of a single products
8
What does making a choice mean in economics?
selecting options without considering resources
having unlimited options available
avoiding all options
selecting one option over others due to limited resources
9
What is GDP?
gross dependent policies
gross domestic poverty
gross domestic product
guaranteeing domestic products
10
What are import quotas and what are the primary purposes of them?
to increase domestic prices
to limit the amount of a good entering a country
to guarantee lower prices for consumers
to eliminate the need for tariffs
11
What are the positives related to entrepreneurship in society?
entrepreneurs can guarantee success
entrepreneurs can create jobs and drive economic growth
entrepreneurs can eliminate all financial risks
entrepreneurs only focus on making profits
12
How do governments protect consumers?
it decides what goods and services consumers can buy
sets prices for all goods and services
enforces laws to protect consumers from unsafe products
it directly produces all goods and services available in the market
13
What is the primary role of banks in a market economy?
organizing labor unions to protect workers' rights
provide financial services like loans and savings accounts
manufacture goods for the market
create laws to regulate businesses
14
How does minimum wage impact consumers?
increase in min. wage has no effect on consumer prices
increase in min. wage on effects cost of production, not consumer prices
increase to minimum wage may typically results in higher prices
increase in min. wage always leads to lowers prices
15
What are some examples of how to use a marginal analysis in a business decision?
evaluating the total benefit of all workers hired
comparing the additional cost and benefit of hiring one more worker
determining the average cost of each worker hired
calculating the total cost of all the workers hired
16
What is a monopoly?
market structure where the government controls all aspects of the economy
market structure where a single producer significantly controls prices
market structure where there is perfect competition
market structure where many businesses compete for sales and profits
17
What are the consequences of government subsidies?
decreases the price of goods for consumers
always reduces government spending
can lead to overproduction of certain goods
they are only given to small businesses
18
What are the effects of price ceilings?
they can lead to shortages
they guarantee lower prices for all consumers
they eliminate the need for subsidies
they always increase supply
19
What is elasticity and what does it measure?
measure how much quantity demanded or supplied changes with price
measures cost of production
measures the speed prices change
measures the total revenue of a product
20
What is the law of demand?
it states that when prices increase producers will supply more
it states that when prices increase consumers will demand more
it states that when prices increase consumers will demand less
it states that when prices increase producers will supply less
21
What is the equilibrium price in the market?
lowest price consumers are willing to pay
average price of all goods and services
highest price consumers are willing to pay
point where supply and demand are equal
22
What is the unemployment rate?
indicator of overall economic health of a nation
indicator of price level changes
indicator of percentage of workers entering the labor force
indicator to determine the percentage of the labor force that is jobless
23
What does the federal government do with it’s revenue?
decrease government spending
increase the wealth of elected officials
supply government services and public goods
to reduce the national debt
24
What is the Federal Reserve in the US and what does it do?
to manage government spending
to set tax rates
regulates the supply of money and interest rates
to create fiscal policies
25
How do local and state governments generate revenue to supply public services?
borrowing money from foreign governments
collects taxes from citizens and businesses
selling public lands to private companies
print more money
26
What are interest rates and how are they used?
this refers to the way borrowers benefit from taking out loans
this refers to the cost of borrowing money & it's how lenders make a profit
It is the cost of letting someone borrow money from you
this refers to the cost of lending money & it's how borrowers make a profit
27
How do entrepreneurs assess the risks AND rewards of starting a new business?
they ignore possible losses
the only focus on potential profits
they must weigh potential profits against possible losses
the do not consider financial risks
28
What are the determinants of supply?
when the price affects the supply of goods and services
those things other than price that affect the supply of goods and services
the quantity producers are willing & able to supply based on price
those things other than price that affect the demand for goods and services
29
What is an income tax?
tax on the income individuals earn for the work they perform
tax on the sale of goods the gov't deems are merit goods
tax on the sale of goods the gov't deems are demerit goods
taxes paid on the profits from selling stocks at a loss
30
What are the effects of implementing price controls on a good or service?
they can lead to shortages if the controlled price is set too low
they have no impact on the quantity of goods available in the market
they ensure that consumers can buy as much of a good as they want
they always lead to surpluses, regardless of the price level
31
In the circular flow model, what is the relationship between households and businesses?
the government provides labor to households and received wages in return
households provide goods to businesses and received wages in return
businesses provide labor to households and received wages in return
households provide labor to businesses and received wages in return
32
Which of the following are characteristics of a command economy?
supply and demand determine prices
government controls the production and distribution of goods and services
businesses operate with little government interference
individuals make all economic decisions
33
What is an excise tax?
none of these are correct
tax on specific goods or services, often those considered luxury items
a form of a sales tax
both A and D
34
What does GDP measure?
dollar value of all final goods and services sold in a nation
dollar value of all new and used products sold in a nation
dollar value of all goods and services sold in a nation
dollar value of all goods, but not services, sold in a nation
35
How do stable money and interest rates affect the economy?
they help bring on economic depressions
they allow for monopolies to control industries
they help bring on economic recessions
they help economies growth and thrive
36
What is the main purpose of labor unions in a market economy?
create laws for regulating businesses
manage investment portfolios for individuals
advocate for workers' rights and better working conditions
provide loans to businesses
37
What are positive externalities when it comes to government involvement in the economy?
free museums
all of these
public education
infrastructure projects
38
Which program is funded by the government to provide healthcare for the elderly?
Roth IRA
Medicare
Blue Cross Blue Shields
401k
39
How does inflation affect purchasing power?
inflation refers to the situation created by the average prices declining
it's when sellers begin lowering prices to make up higher costs to produce
inflation causes the value of money to increase over time
inflation causes the value of money to decrease over time
40
What is medicare?
health care for the elderly
health care for top earners in a nation's economy
health care businesses provide as a fringe benefit for its workers
health care for people whose income is below the poverty level
41
What is one impact of transitional economies, like those of China and India, on the global economy?
these nations help lead global competition and innovation
only the domestic markets for these nations is actually impacted
it results in decreased trade globally
these types of economies have no impact on the global economy
42
What are the negative externalities when it comes to government involvement in the economy?
secondhand smoke
all of the above
traffic congestion
pollution
43
What is the role of corporations in a market economy?
government agencies that regulate trade
businesses owned by shareholders and managed by a board of directors
non-profit organizations that provide community services
small businesses owned by a single individual
44
What is per capita GDP?
it indicates whether or not the gov't is addressing negative externalities
it indicates whether or not a nation's economy is growing
it indicates the average economic output per person
it indicates the demand for goods/services per person in a nation's economy
45
What are the three macroeconomic goals of an economic system?
all 3 of these bad boys
economic growth
low unemployment
stable prices
46
What are the determinants of demand?
the price of goods and services consumers will start purchasing a good
when supply and demand are equal
the quality of a good/service in relation to the gov't inspection of goods
those things other than price that affect the demand for a good or service
47
What can governments do to address a market failure?
to eliminate all forms of competition
to increase profits for private companies
to reduce government spending
to correct negative externalities like pollution
48
What is inflation?
the rate at which the unemployment rate increases
the rate at which the general price level for goods and services rises
the rate at which GDP decreases
the rate at which the general price level for goods and services falls
49
What is economic growth?
when production and sale of good and services lessens over time
when production and sale of good and services declines over time
when production and sale of good and services decreases over time
when production and sale of good and services increases over time
50
What is the international monetary fund (IMF) and what do they do?
it sets the rules for world trade to ensure fair competition
it focuses on promoting free trade agreements between countries
it offers short-term loans to countries facing balance of payments problems
it provides financial & technical assistance to developing nations
51
How doe currency rates affect trade?
an increase in the value of a nation's currency makes its imports cost more
a decrease in the value of a nation's currency makes exports more expensive
an increase in the value of a nation's currency makes its exports cost more
an increase in the value of a nation's currency makes its exports cost less
52
What are the effects of price floors?
they always decrease demand
they ensure higher quality products
they can lead to surpluses
they reduce the need for government intervention
53
What is a sales tax?
tax on corporations for the profits they make
a tax on the income individuals earn for the work they do
a tax on businesses for starting a business
a tax consumers pay for purchasing certain good s and services
54
How do you assess financial risk?
by conducting a marginal analysis of available resources and options
determine goal, conduct research, choose option w/ the most benefit
all of the above
by weighing the costs vs. the benefits of all available options
55
What is opportunity cost?
total cost of all alternatives
amount of money spent on a choice
value of the next best alternative given up for making a choice
time taken to make a decision
56
What is the law of supply?
it states that when prices increase consumers will demand more
it states that when prices increase producers will supply more
it states that when prices increase consumers will demand less
it states that when prices increase producers will supply less
57
How does economic growth in developing nations enhance human capital?
by reducing public services
by creating strict government regulations
by increasing taxes on imports
by investing to improve education and skill training
58
What is the definition of a marginal analysis?
evaluating the alternatives against the choices we make
evaluating the costs and benefits of the possible decisions we can make
evaluating the benefits of the alternatives of possible decisions we make
evaluating the costs of the alternatives of possible decisions we make
59
What does scarcity mean in economics?
there are limited resources for unlimited wants
resources are only available to the wealthy
there are unlimited resources for limited wants
resources are evenly distributed in society
60
How do governments protect property rights?
it makes goods more expensive
it encourages people to invest and innovate
it limits the variety of goods available
it discourages people from working
61
How does free trade help growth in developing countries?
free trade reduces the need for technical assitance
free trade increases government control over industries
free trade allows for access to larger markets
free trade limits the availability of natural resrouces
62
What public goods are provided by the government?
public schools
neither of the above
both A and B
national defense
63
What is the World Bank and what do they do?
it focuses on promoting free trade agreements between countries
it offers short-term loans to countries facing balance of payments problems
it provides financial & technical assistance to developing nations
it sets the rules for world trade to ensure fair competition
64
Is interest earned from a savings account a source of income?
yes
depends on the hypotenuse
no
no way of knowing
65
What is perfect competition?
market structure where a single producer significantly controls prices
in between an oligopoly and monopoly
when monopolies and oligopolies cooperate for consumers
market structure where there are a large # of producers of the same product
66
What is the World Trade Organization (WTO) and what do they do?
it provides loans to developing nations for infrastructure projects
it offers financial assistance to countries in economic crisis
it sets rules for international trade to ensure fair competition
it focuses on promoting cultural exchange between countries
67
What are tariffs?
taxes on services using capital goods
taxes on imports
taxes on exports
taxes on domestically traded goods
68
What is comparative advantage?
when a country can produce more of a good at a lower opp. cost than others
when a country can produce goods using fewer resources than another country
when a country can produce more of a good than another country
when a country can produce a good at a higher cost than another country
69
What is the main limitation of GDP?
it only accounts for used goods and services
it does not account for deflation
it doesn't account for changes in quality of production of goods & services
it doesn't account for inflation
70
What is absolute advantage?
a nation w/ A.A. can produce goods using fewer resources than other nations
a nation with A.A. can produce a good w/ more resources than other nations
a nation with A.A. can produce a good at a higher cost than other nations
a nation with A.A. cannot produce it's own goods and services
71
What is a property tax?
tax someone pays when buying a newly built home
tax paid based on the value of land/buildings
tax individuals pay when they buy retail goods
tax businesses pay to sell goods and services
72
What are incentives in economics?
same as opportunity cost
rewards or penalties that influence people's choices
total cost of making a choice
resources that are always available
73
What are the consequences of monetary policy by the Federal Reserve?
increasing money supply always stabilizes prices
raising interest rates always reduces unemployment
lowering interest rates can stimulate growth but may lead to inflation
decreasing the money supply guarantees econonic growth
74
How might a stronger currency affect a trade balance?
a stronger currency makes exports cheaper and imports more expensive
a stronger currency has no effect on trade balance
a stronger currency always leads to a trade surplus
a stronger currency can lead to a trade deficit
75
What is the primary purpose of fiscal policy?
controlling interest rates and money supply
to influence the economy by adjusting government spending and taxing
to regulate international trade and tariffs
to manage environmental policies and regulations
76
What are examples of government incentives?
ignoring job creation is an incentive
providing no benefits to companies is an incentive
increasing taxes for all companies is an incentive
offering tax breaks to companies that create jobs is an example
77
What are exchange rates and how do they affect international trade?
they determine the amount off goods that can be traded between countries
they determine how much one currency is worth in terms of another currency
they determine the interest rates set by central banks
they determine the levels of tariffs imposed on imported goods

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