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

firms can collude to try and increase prices

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

Consumer sovereignty refers to

the importance of the consumer in deciding what is produced

Who is most negatively affected by unanticipated inflation?

A senior citizen living on a fixed income

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

they supply products and purchase factors of production

To maximize profits, a bank would charge

the higher rate of interest on loans than those of deposits

Which of the following is included in GDP?

The purchase of a meal at Cheesecake Factory

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

decrease personal and corporate income taxes

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

to connect savers and borrowers

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

buy government bonds in the open market

What is the difference between a stock and a bond?

stock is ownership while a bond is simply a loan

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

a company seeking to export good

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

Substitution occurs when its price rises

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Economics EOC Review

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Questions 30

Answers

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

Economics EOC Review Flashcards | StudBud