How does an Entrepreneur represent a central factor in a market economy?

Expect rewards for taking risks with their assets

What would cause a Demand Curve to shift to the left?

a decrease in the price of a complementary good

To control inflation, which fiscal and monetary policies would be most effective?

increasing taxes and raising interest rates

Which best describes the relationship between supply and demand?

high demand and low supply will increase prices

Which reason would cause the Federal Reserve to lower the reserve requirements?

to encourage banks to make more loans

What would happen if banks refused to lend money?

it would be difficult to start new businesses

What economic change best explains a reduction in coffee prices?

improved technology for commercial production

What happens when gasoline prices in the US greatly increase?

cars that use less gasoline become more popular

What is the most likely result of imposing a price ceiling on a particular product?

demand exceed supply and result in a shortage

Which statement best defines deflation?

fall in the general price level of goods and services

What would happen if a frost destroyed 25% of the annual Orange Harvest?

prices will increase and supply will decrease

Why must the questions of What, How, and For Whom to Produce be asked?

unlimited wants and limited resources

Which is an example of a monopoly?

local water company is the sole provider for a small town

What is the best description of the US minimum wage?

lowest rate legally paid to any worker

Which measurement best indicates the economic growth of a country?

per capita Real Gross Domestic Product

What would happen if the price of a substitute good increased?

the demand curve would shift to the right

Which action would the Federal Reserve take to reduce unemployment?

decrease requirement to obtain credit

How would new Chinese automobiles affect US automobile markets?

expanded consumer choice will drive down prices

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Unit 9 (The American Economy)

35 termsStudBud Administration22 plays

Factors of Production, Demand and Supply, Economic Systems

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Questions 35

Answers

1
How does an Entrepreneur represent a central factor in a market economy?
Can use income to diversify their holdings
Often play key roles in business management
Seek support from outside investors
Expect rewards for taking risks with their assets
2
What would cause a Demand Curve to shift to the left?
a decrease in the quantity of a competing good
an increase in the quantity of a substitute good
a decrease in the price of a complementary good
an increase in the price of an inferior good
3
To control inflation, which fiscal and monetary policies would be most effective?
increasing taxes and raising interest rates
lowering taxes and buying bonds
increasing taxes and lowering discount rates
lowering taxes and raising the reserve requirement
4
Which of the following is a Factor of Production?
Urban growth
Regulation
Entrepreneurship
Consumer demand
5
Which best describes the relationship between supply and demand?
high demand and low supply will increase prices
high demand and high supply will decrease prices
low demand and low supply will increase prices
low demand and high supply will show no change in price
6
How does the free enterprise system address the problem of scarcity and choice?
subsidy programs
central planning
laws of supply and demand
market regulations
7
Which reason would cause the Federal Reserve to lower the reserve requirements?
to encourage banks to make more loans
to lower government expenditures
to prevent inflation
to stabilize the discount rate
8
How does the Federal Reserve System act to reduce inflation?
reduces government spending
increases interest rates
reduces income taxes
increases business taxes
9
How does long-term unemployment affect the economy?
increases low skill labor
decreases consumer spending
increases interest rates on loans
increases diversification in financial markets
10
What would happen if banks refused to lend money?
it would be difficult to locate raw materials
it would be difficult to start new businesses
it would be easy to buy new equipment
it would be easy to hire new employees
11
Which of the following is the most common business organization?
sole proprietor
corporation
partnership
nonprofits
12
How does a business adjust for surplus of goods produced?
raise prices
use the same price
lower prices
13
What economic change best explains a reduction in coffee prices?
adoption of tariffs on imported goods
improved technology for commercial production
increased need for subsistence farming
rapid wage increases for factory workers
14
What is the primary role of consumers in a free market economy?
to sustain traditional production methods
to balance the forces of supply and demand
to meet government production goals
to purchase goods and services
15
What would a Job Ad in a newspaper signifiy?
a shortage of entrepreneurs
a shortage of natural resources
a shortage of capital
a shortage of labor
16
What do Government Spending, Taxation, and Public Transfer Payments have in common?
Measures of Domestic Investments
Tools of Federal Monetary Policy
Measures of Aggregate Expenditures
Tools of Federal Fiscal Policy
17
What happens when gasoline prices in the US greatly increase?
cars that use less gasoline become more popular
less investment in solar energy
number of people using public transportation decreases
gasoline refineries will increase their use of oil
18
What is the most likely result of a policy intended to stimulate economic growth?
Economic efficiency will increase
Inflation will rise
Economic equity will increase
Unemployment will rise
19
What is the most likely result of imposing a price ceiling on a particular product?
buyers lose interest in purchasing that product
supply exceeds demand and results in a surplus
demand exceed supply and result in a shortage
sellers decide to produce more of that product
20
What type of business has Double Taxation and Limited Liability?
corporation
partnership
sole proprietor
nonprofit
21
Which statement best defines deflation?
legal restrictions on competition
fall in the value of currency
fall in the general price level of goods and services
unpredictable rise in prices
22
What would happen if a frost destroyed 25% of the annual Orange Harvest?
demand would increase and prices will decrease
supply will remain stable and prices will decrease
prices will remain the same and demand will increase
prices will increase and supply will decrease
23
Why must the questions of What, How, and For Whom to Produce be asked?
inequality in the distribution of resources
unlimited wants and limited resources
forces of supply and demand are unreliable
opportunity cost of specialization is high
24
Which is an example of a monopoly?
farmer produces green beans for sale at a farmers' market
small number of cereal comps. produce most on the market
local water company is the sole provider for a small town
a dry cleaner specializes in enviro. friendly cleaning
25
Which question is being answered when a car company produces more of its top-selling model?
How to produce
What to produce
Where to produce
When to produce
26
What term describes a student's decision between going to the movies or studying for a test?
opportunity cost
equilibrium price
comparative advantage
income effect
27
Prices of inputs, Technology, Expectations, and Taxes and Subsidies shift what?
Fixed Costs
Supply
Marginal Benefit
Consumption
28
What is it called when the business cycle is falling and will continue to fall?
recession
trough
peak
expansion
29
What is the best description of the US minimum wage?
pay rate determined by labor unions
starting pay for workers entering any new job
amount paid for part time work
lowest rate legally paid to any worker
30
Which measurement best indicates the economic growth of a country?
the rate of new employment
average hourly earnings
the Consumer Price Index
per capita Real Gross Domestic Product
31
What would happen if the price of a substitute good increased?
the supply curve would shift to the left
the supply curve would shift to the right
the demand curve would shift to the left
the demand curve would shift to the right
32
Which action would the Federal Reserve take to reduce unemployment?
insure against risk in financial markets
decrease requirement to obtain credit
increase the national supply of money
increase the sales of municipal bonds
33
Which Fiscal Policy would help stimulate production throughout the state?
increasing government borrowing rates
reducing tax rates
increasing interest rates
reducing government spending rates
34
How would new Chinese automobiles affect US automobile markets?
expanded consumer choice will drive down prices
increased demand for a product will cause prices to rise
more intense competition will reduce the quality of goods
improvements in technology will enhance reliability
35
Which of the following would NOT cause prices to increase?
Supply decreases
Production increases
Consumer demand increases

Unit 9 (The American Economy) Flashcards | StudBud