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Economics Final Review 2024 Flashcards | StudBud
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Economics Final Review 2024
Economics Final Review 2024
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Economics Comprehensive Final Review
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
Exchange rate between U.S. $ and Japenese Yen changes from $1=100 yen to $1=125 yen. It means
U.S. goods will be less expensive for Japanese
there will be an increase in U.S. exports to Japan
there will be a decrease in U.S. exports to Japan
Japanese goods will be a more expensive for Americans
2
When a consumer is able and willing to buy a good or service they create which of the following
elasticity
demand
allocation
consumption
3
Which would most likely decrease the productivity of labor?
A decline in the amount of capital goods
A reduction in the tax rate on income
A rise in the pay of workers
A fall in the rate of interest
4
What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?
Medicaid and Supplemental Security
Social Security and Medicaid
Medicare and Medicaid
Social Security and Medicare
5
An example of contractionary fiscal policy would be
cutting taxes
decreasing government spending
increasing production of consumer goods
expanding the government's role in regulating businesses
6
What is a basic principle of the law of demand?
the higher the price, the more people will buy
services are of interest the same way that goods are
everyone has a limited income that they will spend
The lower the price, the more people will buy
7
What is the term for the total value of all goods and services produced in an economy?
open market value
standard of living
net worth
gross domestic product
8
What best describes the role of government in a free enterprise system?
decide what companies will be formed
require companies to disclose information to consumers
allow individuals to operate their own businesses
control business activities
9
On which kinds of goods do governments generally place price ceilings?
goods that are cheap but could become more expensive
goods that are not necessary but have become customary
goods that are essential and cheap
goods that are essential, but too expensive for some people
10
Which item is included in the basic money supply in the U.S.?
Corporate Bonds
Checking account deposits
Gold
Silver
11
In every economic system, people must choose how to
create an equal distribution of income
save money to reduce the national debt
satisfy all of the wants of society
make the best use of scarce resources
12
What is the function of the economic system?
to give all producers the same access to consumers
to produce and distribute goods and services
to make sure all people have equal access to goods
to make sure people are paid for their labor
13
How would the economy of the U. S. be likely characterized?
Free Market
Centrally Planned
Mixed, but on the side of free market
Mixed, but on the side of centrally planned
14
What are inferior goods?
goods that are not well produced
goods that no one wants to buy
goods for which demand falls when income falls
goods for which the demand rises when income falls
15
What does it mean when a person is underemployed?
they have a job but they are overqualified for it
they were working but are now laid off
they are looking for work in a special field
they aren't making as much money as they need
16
What is the cost of money?
the bank's use of money creation
the smoothing out of fluctuations in the market
the economy's use of open market operations
the interest rate
17
The lack of which of the following represents scarcity?
orange juice because the trucks carrying it are on strike
not enough workers because a limited supply of workers
not enough workers because the pay is too low
grapefruit juice because very few people buy it
18
Any resources that are made by humans and used to create other goods and services are called
capital
Services
labor
production
19
In what kind of economy does the government make all the decisions?
Transitional System
Command System
Market System
Traditional System
20
To fight high inflation, the Fed would adopt the following monetary policy...
Lower the reserve requirements for banks
Increase the supply of money
Increase federal government spending
Raise the federal funds rate
21
If the government increases payroll taxes on wages, then there will be
an increase in savings
an increase in investment
a decrease in consumption
a decrease in unemployment
22
How many Federal Reserve Districts are there?
20
12
9
6
23
Economies that grow rapidly over time usually have a high rate of
unemployment
Capital investment
tariffs
Growth in gold reserves
24
During a recession, there will be an increase in
Unemployment
economic growth
Imports
business spending
25
The resources used to make all goods and services are the
production possibilities
factors of production
labor
capital
26
What condition is necessary for a fiat money system to work?
banks must hold sufficient amounts of gold
the government must control the money supply
customers with checking accounts cannot earn interest
money owed must be paid on time
27
The specialization of labor usually results in
an increase in output per hour worked
a more equal distribution of income
an increase in inflation
a decrease in economic interdependence
28
Which of the following is an example of physical capital?
a server at a fast-food restaurant
furniture made by hand
a licensed practical nurse
an automatic teller machine
29
The Federal Government might reduce taxes to
slow down the rate of inflation
decrease business spending on plant and equipment
slow down a rapid rise in interest rates
Increase consumer spending and stimulate the economy
30
What is the effect of import restrictions on prices?
they often cause prices to rise steeply and then drop
They cause prices to drop
they usually do not have any lasting effect on price
they will cause prices to rise
31
The basic economic questions answered by all economic systems
How will corporations be organized?
How can makets be kept competitive?
What form of central planning with the government use?
What goods and services will be produced?
32
Profits are equal to total
assets minus total liabilities
sales minus wages and salaries
sales minus taxes and depreciation
revenue minus total cost
33
What is the purpose of competition?
to make buyers careful about spending money
to act as a regulating force in the market place
to put other businesses out of business
to act as a motivating force behind the free market
34
When buyers purchase exactly as much as sellers are willing to sell
price floor
shortage
market-clearing price
surplus
35
When the economy is working properly, what is the unemployment rate?
8-10%
0-3%
4-6%
10-12%
36
How are wages for a particular job determined?
by the Federal Wage and Hour Department
by advertisements online
by the equilibrium between supply and demand for workers
by the amount of inflation in the economy
37
Which of the following is NOT an example of a public good?
highways
shopping malls
national parks
municipal libraries
38
What does it mean when demand for a product is inelastic?
people will not buy the product when the price goes up
customers are sensitive to the price of the product
a price increase does not significantly impact buying habits
there are a lot of substitutes for the product
39
A decrease in real interest rates provides an incentive for people to save
less and borrow less
less and borrow more
more and borrow more
more and borrow less
40
What is one kind of monopoly that the U.S. Government permits?
utility companies
low-price gasoline
certain kinds of medications
the cell phone industry
41
A shift in the demand CURVE means which of the following?
a decrease in both price and quantity demanded
a change in demand at every price
a rise in prices
a change in consumer income
42
What is a company's total revenue?
the amount of profit a company can expect to make
the amount a company receives for selling its goods
the amount of goods a company can expect to sell
the price of a company's goods
43
A tax that increases as income increases is considered a
Progressive Tax
Regressive Tax
Flat Tax
Proportional Tax
44
What is the most effective way for consumers to make their desires known to businesses?
through mail and phone surveys
by the purchases they make
by hiring lobbyists and joining consumer groups
by protesting
45
A nation has an international trade surplus when
gold reserves are greater than reserves of trading partners
Its exports are greater than its imports
tax revenues are greater than its government expenditures
Its imports are greater than its exports
46
Which best measures a nation's standard of living over time?
Rate of unemployment
Real income per capita
Rate of inflation
Money income per capita
47
What incentive do manufactures have to sell their products?
popularity of the product
putting others out of business
making profits on sales
pleasing the customers
48
Congress increase tariffs, we should expect
a decrease in U.S. import quotas
an increase in U.S. exports to other nations
a decrease in imports into the U.S.
a decrease in U.S. inflation
49
What effect does new technology usually have on an economy?
It reduces available jobs
it reduces dependence of the economy on business
it makes the economy stronger and more efficient
it slows an economy down
50
What is the opportunity cost of a decision?
the best possible item the decision could have been
the series of alternative decisions that could have been mad
the most desirable alternative given up for the decision
the different decision
