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Econ Final Final Review Flashcards | StudBud
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Econ Final Final Review
Econ Final Final Review
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Flashcards
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Questions
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Answers
1
Which of the following situations would result in a government budget deficit?
B The government spends more than it collects in taxes.
D The government spends the same as it collects in taxes.
A The Federal Reserve borrows more than it lends.
C The Federal Reserve lends more than it borrows.
2
How does the process of specialization change an economy?
A Eliminates unemployment
C Improves efficiency of production
B Decreases competition
D Increases government to control
3
Which of the following is true of an investment in bonds?
C They are a low-risk investment.
entitle the holder to a share of ownership in a corporation.
insured by the Federal Deposit Insurance Corporation.
B They are held for three to six weeks, then sold.
4
happens when a country’s money supply increases faster than the goods and services it produces?
D Stability
C Equilibrium
B Unemployment
A Inflation
5
In a market economy, what determines the price and quantity of most goods produced?
B Supply and demand
C Economic policies
A Substitute goods
D Quality of goods
6
Unlimited Wants + Limited Resources = ?
C Savings
B Competition
A Scarcity
D Equilibrium
7
Point at which quantity demanded equals quantity supplied on Supply and Demand Graph
D Equidistant
C Shortage
A Surplus
B Equilibrium
8
A company decides to install more machines and lay off workers. What is answered?
How to produce
D Where to produce
What to produce
C For whom to produce
9
Keynesian economic policies are designed to lower unemployment by _______
stimulating aggregate demand
reducing aggregate demand
creating government jobs
stimulating aggregate supply
10
describes a market in which one firm controls the supply and pricing of a good or service?
D Monopoly
C Perfectly competitive
A Monopolist competition
B Oligopoly
11
What would most likely happen to the orange market if a hurricane destroyed half of crop?
B The price of oranges will fall
A Demand for oranges will rise
C The price of oranges will increase
D Supply of oranges will increase
12
Which of these actions would most likely result in a decrease in consumer spending?
C Increasing government spending
B Decreasing the interest rate
A Increasing income taxes
D Decreasing the reserve requirement
13
Which factor will decrease the demand for a product?
C A decrease in the price of a complementary good
D An increase in the price of a substitute good
B A decrease in the number of buyers
A Increased popularity of a product
14
What is the main idea behind the study of economics?
C Allocation of scarce resources
B Efficiency of production
A. Monetary policy
D Business decisions
15
Which of the following is the best example of the law of supply?
company buys a new dishwasher to make employee work easier.
supplier provides more to local stores as prices fall.
company builds a new factory to process flour to export.
shop increases the supply when the price increases.
16
What is the result of a price ceiling which is a price set below the equilibrium price?
D Equidistant
C Equilibrium
B Surplus
A Shortage
17
What is the benefit of competition in a free market system?
B Create a variety of new and cheaper products
D Follow the traditional methods of production
A Make sure everyone gets an equal share of resources
C Cause producers to try to put each other out of business
18
How many businesses make up an oligopoly?
One
None
Few
Most
19
Which of the following factors contributes the most to economic growth?
A Large amounts of natural resources
B Greater economic freedom
C Low investment in human capital
D High rates of inflation
20
Which best reflects how the government attempts to manage the economy through fiscal policy?
D Buying and selling securities
B Controlling the money supply
C Taxing and spending
A. Controlling interest rates
21
Which of the following is an economic goal of United States government policy?
D To promote full employment
B To limit international competition
C To create a classless society
A To own the factors of production
22
If a government sets a maximum price for a good or service, what does it create?
A Price ceiling
D Illegal price
C Inflated price
B Price floor
23
Which choice is the income tax system the U.S. Federal Gov't uses?
D A value added tax on income
B A flat tax on income
A A progressive income tax
C A regressive income tax
24
Supply-side policies aim to _______
strengthen the government’s role
increase regulation of corporations
strengthen the economy by increasing taxes
reduce the government’s role
25
What is likely to happen when consumers want to buy more scooters than the store has
C Manufacturers will stop making it.
D Stores will make a different model.
B Price of the scooter will increase.
A Profit on scooter sales will be smaller.
26
bonds are considered a safe investment, which characteristic would you expect them to have?
C They take a long time to mature.
B They have high interest rates.
A They take a short time to mature.
D They have lower rates of return.
27
You buy either a CD or to go to a movie. What is the choice that you “give up” called?
A Positive cost
D. Marginal cost
B Negative cost
C Opportunity cost
28
Which of the following statements will help to maximize your stock investment?
D Buy high, sell high
B Buy high, sell low
C Buy low, sell high
A Buy low, sell low
29
when consumers and producers act in their own self-interest, what will be the overall result?
excessively high prices for goods and services.
less variety and fewer products will be made.
C The producers earn a profit making products people want.
businesses will lose money no matter what they sell.
30
In the model GDP = C + I + G + (X - M), “G” stands for _______
Give A Ways
Grants
Government Revenue
Government Spending
31
Which of the following government actions is likely to stimulate the economy?
D Increase government spending and decrease income taxes
C Decrease government spending and increase incomes taxes
B Decrease income taxes and decrease government spending
A Increase income taxes and increase government spending
32
“There is no free lunch.” In economic terms, what does this mean?
A Someone must pay for everything.
C Choices are never based on self-interest.
B All production is designed to reduce scarcity.
D People only think of others when making choices.
33
Spending that Congress is required to make by law is called:
capital spending
mandatory spending
discretionary spending
deficit spending
34
In general, what type of economy does the United States have?
B Market
A Transitional
D Traditional
C Command
35
In economic terms, what is a “stock”?
D A place where individuals raise money
B Pieces of paper that represent money
A A share, or part ownership, of a company
C Ownership of an entire company
36
In economic terms, what are land, labor, capital and entrepreneurship
C Production trade-offs
B Factors of production
D Opportunity costs
A Production possibility
37
Which decision will guarantee that a person will make money in the stock market?
B Nothing will guarantee making money in the market
A Buying the stock of a big company like Microsoft
D Purchasing stocks after the market has dropped for a week
C Buying the stock of a small company like Starbucks Coffee
38
What is the primary incentive that motivates a manufacturer to sell a product?
B Putting others out of business
D Reputation of the product
C Pleasing the government
A Making profits on sales
39
In a market economy, what is the government’s role?
B Owns and operates major industries
A Decides what goods are manufactured
D Sets prices on goods and services
C Encourage competition among businesses
40
What is the most basic economic issue for all societies?
Inflation
Scarcity
Taxation
Recession
41
In every economic system, what must people choose to do?
B Make the best use of scarce resources
C Create an equal distribution of income
A Satisfy all the wants of their society
D Save money to reduce the national debt
42
competitive market that has only a few firms controlling the production of a product?
B Oligopoly
C Pure competition
D Monopoly
A Fierce competition
43
In which of the following economic systems is the “factors of production” privately owned?
A Capitalism
D Confucianism
B Socialism
C Communism
44
Which of the following describes a publicly held corporation?
B Large numbers of stockholders can buy/sell stock
D Family members are excluded from holding stock
A Stocks are not available to company owners.
C Stocks are not usually traded at stock exchanges
45
Which of the following is a result of the specialization of labor?
C Increased output
D Less interdependence
A Increased inflation
B Identical income
