Nations experience economic growth when their

total output of goods and services increases

Which factor is most likely to cause the supply of a product to decrease?

a repeal of subsidies for producers

What forces people to make choices

The discount interest rate is the

rate charged by the Fed to member banks for loans

in alternating periods of growth and decline

What is a command economy?

economic decisions made by central authority

A demand curve shifts to the right when

people are willing to buy more of an item at any price

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Econ & Personal Finance Review

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Questions 26

Answers

1
Which of the following is a capital good
ceiling fan
screwdriver
doorbell
faucet
2
Nations experience economic growth when their
imports equal their exports
total output matches their total inputs
human resources exceed their natural resources
total output of goods and services increases
3
Wood is an example of what?
Capital
Opportunity Cost
Natural Resource
Labor
4
Quantity of goods produced is measured by
S&P 500
GDP
VHS
CPI
5
What would happen if the price of a complementary product decreases?
Supply would decrease
Demand would increase
Supply would increase
Demand would decrease
6
More efficient methods of manufacturing would have what effect?
supply would increase
demand would decrease
demand would increase
supply would decrease
7
What occurs at the intersection of the supply and demand curves?
marginal utility
equilibrium price
cost-benefit break-even point
diminishing return
8
What would cause unemployment in an area to increase?
A large increase in retirements
A law against working mothers
an industrial plant closing
More babies being born
9
Which factor is most likely to cause the supply of a product to decrease?
an increase in the number of suppliers
a decrease in taxes on businesses
a decrease in the price of resources used to make a product
a repeal of subsidies for producers
10
Which of the following words best describes the flow of economic activity in a market system?
linear
back and forth
sequential
circular
11
What is a surplus?
When demand exceeds supply.
Pick this one for 800 bonus points.
When supply equals demand.
When supply exceeds demand.
12
What is a shortage?
When demand exceeds supply
When supply equals demand
When supply exceeds demand
This is the correct answer.
13
Why would the Federal Reserve Board lower interest rates
to improve the balance of trade
to slow down the economy
to eliminate wasteful spending
to initiate economic recovery
14
Fruit, vegetables and water are examples of what?
Wants
Disgusting foods
Needs
Scarcity
15
What is scarcity?
What choice you will have to make
Learning to do without
What makes life worth living
What forces people to make choices
16
The opportunity for individuals to profit from their own efforts happens most in what economy?
command
free-market
traditional
communist
17
When is Economics involved in life?
When money is involved
When people are at war
When there are alternatives
When people produce materials
18
The discount interest rate is the
control over the cost of borrowing money
percentage of deflation in the economy
rate charged by the Fed to member banks for loans
percentage of money that banks must keep in reserve
19
New environmental regulations for power plants would have what effect?
increase in supply
decrease in demand
decrease in supply
increase in demand
20
What effect would an increase in the cost of labor have?
demand would decrease
demand would increase
supply would increase
supply would decrease
21
People have the freedom to choose from a variety of products in what type of economy?
communist
market
traditional
command
22
The economy grows
at a constant rate
at a constant increase
in alternating periods of growth and decline
at a constant decrease
23
The loss of years of income resulting from the decision to go to college is the
total cost
production cost
opportunity cost
marginal cost
24
What is a command economy?
economic decisions made to survive
economic decisions made by individuals
economic decisions made by market forces
economic decisions made by central authority
25
A demand curve shifts to the right when
the average income of consumers in hte market area declines
people are willing to buy more of an item at any price
consumers are willing to buy fewer items at all prices
the number of consumers in the market area decreases
26
Consumers are people who what?
Create products
Invent products
Sell products
Demand products

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