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NJ Economics Challenge Flashcards | StudBud
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NJ Economics Challenge
NJ Economics Challenge
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Preparation for the NJ Econ Challenge March 2017
Flashcards
38 cards
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Practice quiz
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Questions
38
Answers
1
What makes up the majority of the money supply in the US?
Deposits in Checking accounts
Currency and coins
Federal Reserve Notes
Gold
2
What is meant by the statement that every economic system faces the problem of scarcity?
The benefits of goods and services are greater than costs.
Economies have depressions during which scarcities exist.
There are times when products are priced higher than usual.
There are never enough productive resources to satisfy all.
3
The consumer price index is 180 one year and 189 the next year.The yearly rate of inflation was
5%
8%
1%
2%
4
Most of the revenue that American businesses receive by selling goods and services goes to
profits
wages and salaries
taxes
rent and interest
5
During a recession in an economy, there will be an increase in
imports
business spending
unemployment
economic growth
6
Which of the following factors of production is classified as a productive resource?
Interest
Money
Profit
Labor
7
An unexpected increase in the inflation rate will benefit someone in the short term who
lives on fixed incomes and pensions.
owes money on loans at fixed interest rates.
owns life insurance policies.
saves money in CDs at a bank.
8
If every nation that trades globally employed specialization of labor, it would probably...?
eliminate differences in standards of living among nations
increase total world production of goods and services
increase the level of worldwide unemployment
lower living standards in the poor nations of the world
9
The maximum output of goods and services that a nation could produce is limited by its
productive resources
business investment
unemployment rate
consumer income
10
Why do medical doctors generally earn more than farmers?
Doctors provide a service rather than produce things.
Drs. are more scarce, given the demand for their services.
There are fewer doctors than farmers in our economy.
Medical doctors are more efficient than farmers.
11
In the short run, aggregate demand in a country will increase if there is an increase in the
level of technology in the country
tax rates in the country
money supply in the country
price of resources in the country
12
A person who takes on the risk of organizing productive resources in order to make a product.
Manager at Starbucks
Stockbroker
Economist
Entrepreneur
13
Which question must be answered by people in all economic systems?
What form of central planning will the government use?
How can markets be kept competitive?
How will corporations be organized?
What goods and services will be produced?
14
Which of the following will increase a nation's economic growth the most in the long term?
increasing exports and decreasing imports
higher levels of government spending
higher rate of technological change
increasing consumer spending in the economy
15
A student pays for dinner at a restaurant with a coupon for 20% off. In this exchange
the restaurant benefits, but the student does not.
the student benefits, but the restaurant does not.
the student and the restaurant benefit.
neither the student or the restaurant benefit
16
A city has a shortage of rental apartments & eliminates rent controls. Which will likely occur?
a decrease in the demand for apts and an increase in apts
decrease in rents and a decrease in the # of apts for rent
increase in rents and an increase in the # of apts for rent
increase in demand for apts and decrease in apts for rent
17
Specialization of labor usually results in
a more equal distribution of income
decrease in economic interdependance
an increase inflation
higher productive output for each hour the employee worked
18
What is the opportunity cost of a new park in Jersey City?
Best alternative use of resources given up for the park.
negative effects on people and the area around the park
The cost of staff and maintenance for the park.
Increased congestion from traffic around the park.
19
Inflation is
substantial decline in the consumer price index.
sustained increase in the general level of prices.
sharp rise in the price of a major product.
rapid movement of the economy toward full-employment.
20
The President might encourage Congress to pass a new law reducing income taxes in order to
increase consumer spending and stimulate the economy.
slow down a rapid rise in interest rates
decrease business spending on plant and equipment
slow down the rate of inflation
21
This tax table, where higher income earners pay a higher % income tax rate, is called
value added tax on income
proportional income tax
progressive income tax
flat tax on income
22
Economies that grow rapidly over time usually have a high growth rate in
capital investment
tariffs
unemployment
gold reserves
23
A nation has a surplus in its international balance of trade when the value of its
gov't expenditures are more than the value of tax revenues
exports are greater than the value of imports
imports of goods is greater than the value of its exports
gold reserves are more than the other nations' gold reserves
24
What's expected to happen if the U.S Congress raises the general level of tariffs on imports?
a decrease in U.S import quotas
a decrease in U.S inflation
a decrease in imports into the U.S
an increase in U.S exports to other nations
25
The government reported that gas prices increased and the quantity of gas sold decreased. Why?
supply increased
demand increased
demand decreased
supply decreased
26
The current price of a competitive good is $5. If the gov't puts a minimum price of $6 on it,
there will be a surplus of the product
there will be a shortage of the product
there will be a reduction in supply of the product
there will be an increase of supply of this product
27
What monetary policy implemented by the Fed would be most effective in fighting high inflation?
Reducing the discount rate
Reducing income tax rates.
Selling government bonds in the Open Market.
Reducing the required reserves of banks.
28
From an economic point of view, which approach to controlling pollution is most efficient?
Adopt laws that prohibit companies that cause pollution.
Abolish the use of toxic chemicals.
Lower pollution so the benefits are greater than the costs
Use economic resources to eliminate all pollution.
29
A large monopoly is broken up into 5 new competitors. We should expect the 5 new firms to....?
decrease output and increase prices.
increase output and increase prices.
increase output and decrease prices.
decrease output and decrease prices.
30
The US $ strengthens vs. the Japanese yen from 100 yen to 125 yen per $. This change means that
Japanese goods will be more expensive for Americans.
there will be a decrease in U.S. exports to Japan.
Japanese goods will be more expensive for Americans.
there will be an increase in U.S. exports to Japan.
31
The demand for a factor of production will usually be more elastic when:
the factor’s cost is a small part of the final total cost.
demand for the good the factor produces is highly elastic.
few close substitutes for the factor exist.
the time period under consideration is very short.
32
Gross Domestic Product is
The price level of goods and services sold
the quantity of goods and services produced by businesses
total spending by Federal, State and local governments
value of the nation's output of finished goods and services
33
A government budget surplus exists when
tax revenues are greater than government spending.
the national debt is increasing.
government spending is decreased.
taxes are increased
34
Which would most likely decrease the productivity of labor?
A decrease in job training
An increase in the pay of workers
A decrease in taxes
An increase in capital investment
35
Governments rather than private businesses provide a public good such as clean water because
Businesses don't like to produce services for the gov'ment.
when people use a public good, less is available for others
those who don't pay for a public good still receive benefits
a public good does not benefit individuals
36
Which would most likely decrease the quantity of corn sold in a competitive market?
An improvement in the technology of growing corn
A decrease in the price of farm equipment.
An increase in the price of fertilizer.
An increase in the incomes of consumers
37
Profits are equal to
assets minus total liabilities
sales minus taxes and depreciation.
sales minus wages and salaries.
revenue minus total cost
38
The costs of producing additional units of output eventually increase for a company because of:
diminishing marginal returns.
diseconomies of scale
increases in average fixed costs.
specialization and division of labor.
