What MOST often happens when demand for a product is highly elastic?

Substitution occurs when its price rises

In the circular flow, what is the role of businesses?

they supply products and purchase factors of production

Which of the following is included in GDP?

The purchase of a meal at Cheesecake Factory

What is the MAIN importance of banks in a market capitalist economy?

to connect savers and borrowers

If the Fed buys $10 million worth of gov. securities and the reserve requirement is 10%...

total monetary expansion could be as high as $100 million

If a country's currency is weakening, who is helped?

a company seeking to export good

Consumer sovereignty refers to

the importance of the consumer in deciding what is produced

To maximize profits, a bank would charge

the higher rate of interest on loans than those of deposits

Who is most negatively affected by unanticipated inflation?

A senior citizen living on a fixed income

What is the difference between a stock and a bond?

stock is ownership while a bond is simply a loan

If the Federal Reserve wants to stimulate economic growth, what would they do?

buy government bonds in the open market

If the Federal government (Congress) wanted to grow the economy, how might they do it?

decrease personal and corporate income taxes

Which of these is NOT true of a perfectly competitive market?

firms can collude to try and increase prices

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Economics EOC Review

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Questions 30

Answers

1
What MOST often happens when demand for a product is highly elastic?
Supply of the product increases as the price drops
Demand for the product increases even when its price rises
The product will stop being produced when the prices drops
Substitution occurs when its price rises
2
SInce the United States applies higher rates of taxation on on higher incomes, it has a
a proportional tax
a flat tax
a progressive tax
a regressive tax
3
Which of the following would create a surplus in the market?
a price ceiling
a price floor
an increase in the popularity of a product
an increase in cost of inputs
4
In a market capitalist system, what is essential for prices to be "fair" to consumers?
profit motive
minimum wage
competition
monopolies
5
In the circular flow, what is the role of businesses?
they buy products and buy factors of production
they buy products and sell factors of production
they supply products and purchase factors of production
they supply products and supply the factors of production
6
An increase in government regulation will cause
the price of the product to decrease
an increase in the quantity demanded
the supply curve to shift to the right
a decrease in supply
7
Which of the following is included in GDP?
The purchase of cotton by Levi Strauss
The purchase of a meal at Cheesecake Factory
The sale of a couch at a garage sale
The purchase of a pair of shoes made in Italy
8
What role is the government assuming when they use the FDIC to reassure bank customers?
consumer of goods
producer of goods
regulator
protector
9
Which of the following is NOT a component of aggregate demand?
business investment
consumer spending
government spending
money in circulation
10
What is the MAIN importance of banks in a market capitalist economy?
to decide how much money such be in the economy
to make a profit for their shareholders
to connect savers and borrowers
to limit spending by customers by holding their money
11
Generally, What would be the impact of an increase in technological capability in an economy?
inflation would increase
Production possibilities curve would move inward
GDP would increase
the budget deficit would increase
12
If the Fed buys $10 million worth of gov. securities and the reserve requirement is 10%...
total monetary expansion could be as high as $100 million
Excess reserves would increase by $1 million
there is no change in the money supply
Legal reserves would be $4 million dollars
13
If a country's currency is weakening, who is helped?
a company seeking to export good
A company attempting to import goods
A student traveling for a foreign country
a worker who makes a fixed wage
14
When the government spending increases, what will MOST LIKELY happen to employment?
it depends on what they spend it on
it will decrease
it will not change
It will increase
15
Which of the following does NOT influence whether you can get a loan?
Age of the borrower
The borrowers history of repaying loans
The amount of collateral of the borrower
The credit score of the person of the borrower
16
An economy where producers and consumers makes decisions about what is produced is called
a democracy
a socialist economy
a traditional academy
a market economy
17
Which factor MOST directly effects the amount of money borrowers must repay to lenders?
the annual percentage rate
the currency exchange rate
the unemployment rate
the inflation rate
18
Consumer sovereignty refers to
consumers being forced to buy things against their will
consumers determining the price of goods
the importance of the consumer in deciding what is produced
the power they have to take property away from corporations
19
How does a Federal Reserve policy of low interest rates affect consumers?
They save less money
They tend to buy less expensive products
It increases reliance on foreign imports
It tends to lower prices for consumers
20
Which of these would most likely increase GDP?
increasing corporate tax rates
increased government spending
raising the interest rates
increased imports
21
A Country's balance of trade involves the value of its
interest rate and exchange rate
exports and gross domestic product
exports and imports
foreign investment and government debt
22
Which role does money have in economic systems?
a measure of satisfaction
a productive resource
a consumable good
a medium of exchange
23
Which of the following is an example of capital as a productive resource of pizza
the wood used to fuel the fire in the oven
the tomatoes used to make the sauce
a chef who develops the recipe
the oven used to cook a pizza
24
To maximize profits, a bank would charge
a rate of interest that is the same for deposits and loans
the higher rate of interest on loans than those of deposits
a lower rate of interest on loans than they pay on deposits
a higher rate of interest for the rich than the poor
25
if the supply of teaching candidates increased, what would MOST likely happen to teacher wages?
they would decrease
depends on how much the supply changed
they would not be affected
they would increase
26
Who is most negatively affected by unanticipated inflation?
A young college graduate who is working and saving money
A student who has fixed interest rate student loans
A senior citizen living on a fixed income
A family who has a fixed rate mortgage on their home
27
What is the difference between a stock and a bond?
stock is ownership while a bond is simply a loan
stocks have less risk than bonds
stocks are guaranteed to make money, bonds are not
stocks can be bought by the public, bonds can't
28
If the Federal Reserve wants to stimulate economic growth, what would they do?
decrease the money supply
increase the reserve requirement
increase the interest rate
buy government bonds in the open market
29
If the Federal government (Congress) wanted to grow the economy, how might they do it?
decrease personal and corporate income taxes
decrease government spending
increase the money supply
begin to pay off the debt
30
Which of these is NOT true of a perfectly competitive market?
firms sell nearly identical products
firms have no control over the price of the prodcut
firms generally don't advertise their individual products.
firms can collude to try and increase prices

Economics EOC Review Flashcards | StudBud