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Unit 4 & 5 Review Flashcards | StudBud
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Unit 4 & 5 Review
Unit 4 & 5 Review
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StudBud Administration
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Economic Systems Economic Principles and Policies
Flashcards
25 cards
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Practice quiz
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Questions
25
Answers
1
Which action would the Federal Reserve take to help reduce unemployment?
insure against risk in financial markets
decrease requirements to obtain credit
increase the national supply of money
2
Which characteristic best completes the following diagram?
Includes state and national member banks
Owns large shares of the stock market
3
A definition of fiat money is currency that
can be exchanged for a set amount of a commodity.
is backed by investments.
is legal tender based on government decree.
4
In a market economy, the strongest incentive for entrepreneurship is the opportunity to
support projects for the public good
earn a profit on investments
5
Which result is a benefit of the free enterprise system?
Government officials distribute wealth and resources efficiently.
Individuals have the freedom to choose what to produce and consume.
6
The government’s action stated in this newspaper headline is an example of which type of economy?
socialist
traditional
command
mixed
7
As Houston’s population grows, the highway traffic grows increasingly worse
Economic instability
Under-producing public goods
Over-producing negative externalities
Failure to make public investments or plan for the future
8
Inflation is
An increase in the average price level
A decrease in the average price level
A change in relative prices of goods
A situation when the price of necessities rises
9
How do consumers exercise their power in the American economy?
by deciding what to purchase
by becoming entrepreneurs
by saving their money
by working for businesses
10
Which numbered pair places communism and socialism at appropriate points on the chart?
1 – Socialism, 3 – Communism
2 – Socialism, 3 – Communism
1 – Communism, 2 – Socialism
11
Use the list below to answer the question. Which phrase best completes this list?
collects taxes from corporations
oversees national banking institutions
manages foreign exchange rates
12
Housing prices increased in the early 2000’s, followed by a collapse in housing prices and a recession in 2008.
Under-producing public goods
Abuse of consumers, savers and investors
Over-producing negative externalities
Economic instability
13
Which of the following would be included in the GDP?
sales of used goods
transfer payments
goods that are produced by foreigners within domestic borders of a nation
14
Which of the following BEST completes this list?
Competition
Interest Rates
15
What function of money is being used when prices for goods and services are stated in terms of money?
store of value
unit of account
standard of deferred payment
medium of exchange
16
Which item is an example of commodity money?
personal check
gold nugget
credit card
dollar bill
17
In a socialist economy, the means of production are owned by
private citizens
the government
18
Why does the U.S. government enforce antitrust laws?
to ensure competition in the marketplace
to create incentives for research and development
19
Which characteristic describes fiat money?
used in barter economies
backed by the issuing government
20
Collecting taxes to pay for public goods is one role of _____________.
a free market system
a government
21
Which term replaces the question mark?
Gross Domestic Product
National Savings
Transfer payments
Disposable Personal Income
22
Which of the following is the largest component in the GDP?
Exports
Imports
Consumption
23
Use the list below to answer the question. Which phrase BEST completes the title?
the Federal Reserve to Enact Monetary Policy
Labor Unions in Collective Bargaining
Congress to Monitor Treasury Bonds
the Federal Trade Commission in Regulating Banks
24
Which function of money allows transactions to occur without barter?
medium of exchange
unit of account
standard of deferred payment
store of value
25
John Maynard Keynes would most likely support which type of economic system?
Market
mixed
