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Economics Unit 5 Exam Flashcards | StudBud
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Economics Unit 5 Exam
Economics Unit 5 Exam
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30
Answers
1
In the U.S. free enterprise system one of the primary roles of the government is to —
provide new sources of funding for technology start ups
guarantee that investors profits are secure
ensure the safety of products through regulation
employ a majority of the workforce
2
On a supply and demand graph, supply will decrease and shift to the left when which of the following happens?
There are fewer government regulations in place.
The number of firms leaving the industry increases.
The total cost of inputs decreases.
Production taxes decline over a short period of time.
3
Which of the following is most characteristic of the U.S. free enterprise system?
Government price controls
Nationalization of energy companies
Markets that respond to consumer demand
Public ownership of the factors of production
4
Which of the following retirement investment options is usually offered as a benefit of employment?
College tuition reimbursement
Mutual Funds
Bonds
401(k)
5
One government restriction to consider when proposing to build a new business includes —
repayment of loans
zoning laws
investor taxes
hiring subcontractors
6
An expansionary period in the business cycle is distinguished by —
high inflation
fewer excise taxes
low unemployment
declining sales
7
Which characteristic of the U.S. free enterprise system creates the incentive to work, save, and invest?
Private property ownership
Consumer sovereignty
Voluntary exchanges
Social Security system
8
Investments with high rates of return are generally accompanied with —
very little risk
lower levels of risk
no risk
high levels of risk
9
An important financial detail to consider when purchasing a home includes —
time for commuting
family size
number of rooms
saving for a down payment
10
One result of competition in a free enterprise system is —
improved safety conditions
fewer consumer choices
lower prices for products
steady wages and incomes
11
The market structure of pure competition is distinctive because —
there are no examples of this type of market structure
there are large numbers of barriers to entry into this market structure
the sellers in this market structure have no control over price
only one seller is needed in this market structure
12
Which investment is considered the most secure in a retirement plan?
Public bond
Individual retirement account
Mutual fund
401(k)
13
One of the benefits of the U.S. free enterprise system is the —
amount of choices for consumers
equal distribution of goods and services
guaranteed returns on investments
lack of union participation by workers
14
What is one advantage to placing savings in a high-risk investment as oppose to putting savings in a low-risk investment
The potential rate of return on investment is higher.
The amount of money needed to invest is lower.
The money is more secure in a high-risk investment.
The tax rate on high-risk investments is lower.
15
One of the benefits of home ownership includes —
paying property taxes
purchasing insurance
funding large capital outlays
building equity
16
One of the primary functions of financial institutions in an economy is to —
create investment portfolios for venture capitalists
prepare taxes for individuals and businesses
offer incentives to businesses for investing
provide access to capital for people and businesses
17
Which of the following is a basic characteristic of all economic systems?
Wage incentives
Small business owners
Price controls
Distribution of goods and services
18
Which of the following is considered a benefit to purchasing insurance?
Insurance can cover the difference between monthly expenses and income.
Insurance coverage can reimburse for losses on investments.
Insurance is available when an unexpected need for repair or services arise
Insurance can be used to cover the cost of moving expenses.
19
One potential risk from investing in the stock market is the loss of —
earned interest income
investor tolerance
purchasing power
portfolio diversification
20
One of the financial advantages of donating to charitable causes is that the donation can be —
taken directly from a pay check
viewed as a capital gain
used to fund investments
considered a tax deduction
21
One effect of an increase in the amount of savings in an economy is —
an increase in consumer spending
a decrease in the production of goods and services
an increase in financial resources for business investment
a decrease in retirement investments
22
Which of the following actions would improve a credit score?
Paying off all debts
Keeping credit card balances as high as possible
Consolidating credit card balances
Checking credit reports on a regular basis
23
Economic growth would most likely result from —
increased employment
decreased sales of stock
decreased trade
increased productivity
24
Which of the following is an action of the Federal Reserve that strongly influences local economies?
It can provide stimulus money for job creation.
It can require banks to provide savings accounts to the community.
It can raise or lower property taxes.
It can make loans cheaper or more expensive by adjusting interest rates.
25
One way the United States could increase exports of sports cars would be to —
raise the prices of sports cars in the United States
reduce gasoline taxes in the United States
negotiate to lower tariffs on sports cars
increase the exchange rate of the American dollar
26
The most effective way to manage credit card debt is by —
paying off the balance each month
paying the minimum balance
working a part-time job to pay for credit
finding a credit card with the lowest interest rate
27
Scarcity is a basic economic problem because —
opportunity costs limit demand
governments limit production
resources are limited
people have trouble making choices
28
Loans that are obtained by offering an asset to guarantee repayment of the loan are considered —
default loans
repossession loans
unsecured loans
secured loans
29
Which of the following is a non-price determinant of demand?
Consumer preferences
Productivity
Price ceiling
Subsidy
30
Which of the following best completes the diagram?
Characteristics of Partnerships
Characteristics of Free Enterprise
Characteristics of Corporations
Characteristics of Sole Proprietorships
