In which of the following situations are two nations MOST likely to trade?

Each nations has a comparative advantage in producing

Which situation might the Fed Reserve sell government securities and raise the discount rate

when the inflation rate is high

A person who opposes free trade would MOST likely

call for supporting American jobs

A person who invests in Mutual Funds is choosing an investment that

a balance of low risk/low return and high risk/high retur

Which government decision below represents possible effects of deregulation

The government lessens control of the TV industry.

Which of the following is an example of government transfer payments?

Medicare payments to the poor and elderly

At what point on a graph would be the market clearing price?

Where quantity supplied equals quantity demanded

What is the relationship between the national debt and the government's budget deficit this yea

This year's budget deficit adds to the size of national debt

If the government's fiscal policy is designed to expand the economy,

the government would decrease income taxes

Which issue might a professor of microeconomics specialize in?

relationship of supply and demand in the housing market

Which is the MOST important function of government patents in a market economy

to allow entrepreneurs to earn profits

Which of the following is an example of entrepreneurship?

a person who starts a new online business

What is meant by Voluntary Exchange?

Buyers and sellers freely engaging in market transactions

Workers with a cost of living adjustment in their wage contracts

suffer less from inflation than other workers

What is one result of the North American Free Trade Agreement (NAFTA)

Reduced trade barriers among the U.S., Canada, and Mexico

Which of these choices is the MOST likely effect of a strong U.S. dollar?

Travel abroad becomes more affordable for Americans

What are the three basic economic questions that all nations must answer?

what to produce, how to produce, and for whom to produce

Henry decides to deposit $50 of his money into his college savings rather than buy a video

His opportunity cost is the enjoyment of playing the game

Which of the following represents an investment in human capital?

A company offers free job-related education to employees

Which worker BEST illustrates the problem of cyclical unemployment?

a sales rep laid off during an economic downturn

One major difference between banks and credit unions is that

Banks are for profit and credit unions are not for profit

A sales tax is considered regressive because

it has a more serious impact on the poor than the rich

Which of the following statements about the disadvantages of credit cards is FALSE?

Credit cards are not often useful in an emergency

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Economics EOCT Prep

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Answers

1
Since the early 1960s, the U.S. government has forbidden all imports from Cuba. This is
a tariff
a quota
a subsidy
an embargo
2
You quit your job to move to another city
Frictional Unemployment
Structural Unemployment
Cyclical Unemployment
Seasonal Unemployment
3
In which of the following situations are two nations MOST likely to trade?
Each nation has absolute advantage
Neither nation has comparative advantage
Each nations has a comparative advantage in producing
Neither nation has an absolute advantage in production
4
Which situation might the Fed Reserve sell government securities and raise the discount rate
when the inflation rate is high
in a depression
when aggregate supply is too high
in a recession
5
Leo and Alex wash and wax cars. If Leo washes cars and Alex waxes cars, this represents
Voluntary Exchange
Specialization
Profit Allocation
Equilibrium
6
A person who opposes free trade would MOST likely
support a reduction in tariffs
call for supporting American jobs
call for an end to quotas
Oppose protectionist policies
7
A person who invests in Mutual Funds is choosing an investment that
has the highest risks and the highest returns
has the highest risks and the lowest returns
has the lowest risk and lowest returns
a balance of low risk/low return and high risk/high retur
8
Which government decision below represents possible effects of deregulation
The government controls prices charged by public utilities
The government lessens control of the TV industry.
The government forbids age discrimination in the workplace
The government strengthens anti-pollution measures
9
Which sentence best describes the organization of the Fed Reserve?
It oversees monetary policy
It is not insured
It oversees fiscal policy
It is controlled by the U.S. President
10
If the price of apples increases from $1.50 to $2.00, this is an example of
Law of Supply
Increase in demand
Change in Demand
Change in Quantity Demanded
11
You lose your job because the economy is not growing
Cyclical Unemployment
Frictional Unemployment
Seasonal Unemployment
Structural Unemployment
12
If the price of new cars increases, and the quantity demanded decreases
The cars are not needed
The cars are expansive
The cars are inelastic
The cars are elastic
13
Which of the following is an example of government transfer payments?
Interest payments on the national debt
Payments to private industries for highway construct
Medicare payments to the poor and elderly
Salary payments to government employees
14
At what point on a graph would be the market clearing price?
Where quantity supplied equals quantity demanded
Where supply exceeds demand
Where demand exceeds supply
At the Price Ceiling
15
How are MOST public goods and services paid for in the U.S.
by taxes
by charitable donations from individuals
by user fees
by charitable donations from corporations
16
Which of the following would be considered Fiscal Policy?
Taxes
Taxes and Government spending
Open Market Operations
Government Spending
17
What is the relationship between the national debt and the government's budget deficit this yea
The national debt guarantees a budget deficit next year
They are the same
There is no connection between them
This year's budget deficit adds to the size of national debt
18
What impact would increasing the money supply have on interest rates?
Increase Interest Rates
Decrease Interest Rates
Increasing the money supply would decrease taxes
No Impact on Interest Rates
19
Which of the following is the most commonly used tool of the Federal Reserve
Open Market Operations
Reserve Requirement
Discount Rate
Increasing or Decreasing Government Spending
20
How are economic questions answered in a command economy?
by consumers
by supply and demand
by producers
by the government
21
You lose your job because you are being replaced by technology
Structural Unemployment
Cyclical Unemployment
Frictional Unemployment
Seasonal Unemployment
22
If GDP is decreasing and unemployment is increasing, what steps might the Federal Reserve take
Increase the Discount Rate
Sell Bonds
Buy Bonds
Decrease Taxes
23
If the government's fiscal policy is designed to expand the economy,
the government would buy government bonds
the government would decrease spending
the government would lower the discount rate
the government would decrease income taxes
24
Which basic economic problem does the U.S. share with all other nations?
lack of public services
lack of technology
too much government control
scarcity of resources
25
Which issue might a professor of microeconomics specialize in?
relationship of supply and demand in the housing market
Evaluating the effectiveness of monetary policy
causes of rising unemployment
effects of declining GDP
26
Product differentiation, or branding, is a characteristic of firm in which market structure?
Oligopoly
Monopoly
Perfect Competition
Monopolistic Competition
27
Which sentence describes market conditions at the equilibrium price?
Demand is greater than supply
Price ceilings determine supply and demand
Supply is greater than demand
Supply and Demand are equal
28
Which is the MOST important function of government patents in a market economy
to allow one corporation to benefit from the ideas of others
to protect consumers from being cheated
to allow entrepreneurs to earn profits
To protect sole proprietors from corporate takeovers
29
Which of the following is an example of entrepreneurship?
a person who takes a job with a high-tech firm
a person who starts a new online business
a person who invests in computer stocks
a person who buys land and builds herself a new hours
30
What is meant by Voluntary Exchange?
Buyers and sellers freely engaging in market transactions
The government implementing price ceilings or price floors
The Government implementing Fiscal Policy
The Federal Reserve implementing Monetary Policy
31
If a nation has an increase in its resources. How would this be shown on the PPC?
As a leftward shift
A movement inside the PPC
A point on the curve
As a rightward shift
32
Workers with a cost of living adjustment in their wage contracts
suffer less from inflation than other workers
can never be fired of laid off
receive raises every month
suffer more from inflation than other workers
33
Which of the following might benefit from unanticipated inflation?
an investor
a saver
someone who has lent out money
someone who has borrowed money
34
What is one result of the North American Free Trade Agreement (NAFTA)
increased trade barriers among the U.S., Canada, and Mexico
Increased tariffs for European imports into North America
Reduced trade barriers among the U.S., Canada, and Mexico
Reduced quotas for Japanese imports into North America
35
Which of the following would cause a new demand curve?
Input Costs
Consumer Expectations
Change in Price
Number of Producers in Market
36
Which of these choices is the MOST likely effect of a strong U.S. dollar?
U.S. imports become more expensive
Travel abroad becomes more affordable for Americans
The U.S. trade deficit improves
U.S. exports increase
37
What are the three basic economic questions that all nations must answer?
What to produce, how to produce, and when to produce
what to produce, how to produce, and for whom to produce
How to product, what to produce, and where to produce
for whom, Why, and how much
38
Which of the following would shift the supply curve to the right?
Decrease in wages
Increase in wages
Consumer expectations
Taste, Advertising, and Preferences
39
Actively seeking a job after graduation from college
Cyclical Unemployment
Seasonal Unemployment
Structural Unemployment
Frictional Unemployment
40
A sales tax is
A regressive tax
A progressive tax
An income tax
A proportional tax
41
Henry decides to deposit $50 of his money into his college savings rather than buy a video
His opportunity cost is gains by pleasing his parents
His opportunity cost is a better chance of going to college
His opportunity costs is the interest he will earn
His opportunity cost is the enjoyment of playing the game
42
Which of the following is a limit on the number of a particular item that can be imported
a standard
a tariff
a quota
an embargo
43
Which of the following represents an investment in human capital?
A company offers free job-related education to employees
a company invests in new computers for job use
A company raises wages for all factory workers
A company hires 100 new employees in all branch divisions
44
Which worker BEST illustrates the problem of cyclical unemployment?
a factory worker whose skills are no longer marketable
a sales rep laid off during an economic downturn
College graduate who turns down one job for a better job
a landscaper who can't find a job in the winter
45
The government imposes a maximum limit on the price of gasoline that is lower than equilibrium
price floor;surplus
price floor; shortage
price ceiling; shortage
price ceiling; surplus
46
One major difference between banks and credit unions is that
banks offer savings accounts, and loans, but not credit unio
credit unions are profit making firms, banks are not
Banks are for profit and credit unions are not for profit
Banks charge simple interest; Credit Unions charge compound
47
A sales tax is considered regressive because
it decreases sales for all types of businesses
it has a more serious impact on the poor than the rich
it decreases sales for small businesses
it has more serious impact on the rich than the poor
48
What impact does contractionary policy have on Aggregate Demand?
Increases Aggregate Demand
Decreases Aggregate Demand
Aggregate Demand stays constant
Has no impact on Aggregate Demand
49
Which of the following statements about the disadvantages of credit cards is FALSE?
Credit cards charge compound interest
Credit cards charge variable, rather than fixed, rates
Many credit cards charge annual fees
Credit cards are not often useful in an emergency
50
Which group in the U.S. establishes the nation's monetary policy?
the Federal Reserve
The House of Representatives
the Senate
the president's Cabinet

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