Econ Final Exam Review

Question 1

To recover money from a sell short investment a stock trader would:

Accepted Answer

buy to cover

Question 2

What “invisible hand” regulates the free market economy?

Accepted Answer

competition and self-interest

Question 3

A portion of a company’s earnings paid to the stockholders on a quarterly or annual basis.

Accepted Answer

Dividends

Question 4

If you choose between two summer jobs, the one you do not choose is the _____ of your decision.

Accepted Answer

opportunity cost

Question 5

Period during which the Stock Exchange is open for trading.

Accepted Answer

Trading session

Question 6

Why might the Soviet planners have favored heavy industry over the makers of consumer goods?

Accepted Answer

Products of industry provided material for other industries.

Question 7

Products such as wood, oil and metals are traded on a separate _______________ exchange.

Accepted Answer

Commodities

Question 8

Where are traditional economies usually found?

Accepted Answer

in small communities that avoid change

Question 9

Various types of securities held by an individual or institution.

Accepted Answer

Portfolio

Question 10

What is one reason European governments protect the growing of food with subsidies?

Accepted Answer

to have food in case imports are ever restricted

Question 11

Money and other property of companies used in transacting the business.

Accepted Answer

Capital

Question 12

Savings fund that uses cash from savers to buy securities such as stock, bonds or real estate.

Accepted Answer

Mutual fund

Question 13

What date was “Black Tuesday” based on the huge loss of stock value on the US stock market?

Accepted Answer

Oct 29, 1929

Question 14

The capital of a company is divided into ____________ which give the owner some of the profits.

Accepted Answer

shares

Question 15

What is considered a negative effect of government regulations?

Accepted Answer

All of the above.

Question 16

What is the difference between a shortage and a scarcity?

Accepted Answer

A shortage can be short or long, but scarcity always exists.

Question 17

Someone who buys or sells stocks in the hope of making a profit through changes in their value.

Accepted Answer

speculator

Question 18

What does the economic concept of “guns or butter”mean?

Accepted Answer

Government must decide to make military or consumer goods.

Question 19

What must a nation’s economy do in order to improve the standard of living?

Accepted Answer

grow

Question 20

In what way does the Bill of Rights protect individuals’ to engage in business activities?

Accepted Answer

It recognizes property rights.

Question 21

Every decision involves trade-offs because:

Accepted Answer

everyone’s resources are limited.

Question 22

In a Bull Market, what is necessary for people to make money (increase value of their stock)?

Accepted Answer

require more buyers than buyers (of stock shares)

Question 23

What happens as production of one item switches to the production of another item?

Accepted Answer

More resources are needed.

Question 24

Stocks and shares which represent a portion of the capital of a company.

Accepted Answer

Equities

Question 25

How did heavy industry in the USSR avoid the competition that drives a free market economy?

Accepted Answer

The USSR determined prices, wages, and products.

Question 26

Person who owns stocks and shares is known as a:

Accepted Answer

stockholder

Question 27

Money raised by companies to finance new ventures in exchange for percentage ownership.

Accepted Answer

Venture capital

Question 28

What is one reason the U.S. government regulates car manufacturing?

Accepted Answer

to offset the pollution caused by cars

Question 29

The debts and obligations of a company or an individual.

Accepted Answer

Liabilities

Question 30

Traditional economies are usually:

Accepted Answer

small communities that avoid change and new technology.

Question 31

How does new technology generally affect production?

Accepted Answer

It lowers cost and increases supply.

Question 32

How is the economic system in China today different from the one in Soviet Russia?

Accepted Answer

The Chinese government allows far more economic freedom.

Question 33

What effect do rising input costs have on the price of a good?

Accepted Answer

The good becomes more expensive to produce.

Question 34

Why do people need to buy and sell products or services?

Accepted Answer

No one is self-sufficient.

Question 35

When the price of a product goes down, what happens to producers?

Accepted Answer

Some produce less, and others leave the market.

Question 36

All those who have access to secret information concerning the company are known as:

Accepted Answer

insiders

Question 37

The price a buyer is willing to offer for shares in a company is known as:

Accepted Answer

a bid

Question 38

A licensed professional who buys and sells stocks and shares in exchange for a fee.

Accepted Answer

stockbroker

Question 39

Stocks of leading companies with a reputation for stable growth and earnings are known as:

Accepted Answer

blue chip

Question 40

Transferable certificates showing ownership of stocks, bonds, shares, options, etc.

Accepted Answer

Securities

Question 41

IPO or selling part of a company on the stock market is the acronym (abbreviation) for:

Accepted Answer

Initial Public Offering

Question 42

The stocks highest and lowest values for the day in indicated by its:

Accepted Answer

range

Question 43

In what situation would a factory that is losing money keep operating?

Accepted Answer

if total revenue is greater than operating cost

Question 44

How were people able to buy stock beyond what their saving s would allow ( before 1929)?

Accepted Answer

bought stock on margin

Question 45

A stocks market cap is:

Accepted Answer

The total $ market value of a company's outstanding shares.

Question 46

The right to buy and sell certain securities at a specified price and period of time.

Accepted Answer

Option

Question 47

Why has America been referred to as the “land of opportunity”?

Accepted Answer

Provides the possibility of success through hard work.

Question 48

Return on (a stock) investment shown as a percentage is known as:

Accepted Answer

yield

Question 49

Companies _____________ stock to put it into the market allowing a company's shares for sale.

Accepted Answer

issue

Question 50

The economic concept of guns or butter means that:

Accepted Answer

government must decide on more military or consumer goods.

Question 51

How does a society determine who will get what is produced?

Accepted Answer

by its distribution of income

Question 52

A _______________________ represents the number of shares owned by an investor.

Accepted Answer

Share certificate

Question 53

What basic principles are fundamental to American free enterprise?

Accepted Answer

open opportunity, private property, contracts, open exchange

Econ Final Exam Review

Questions 53

Econ Final Exam Review

Questions 53