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Economics - Unit 2 - Test Review - Part 1 of 2 Flashcards | StudBud
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Economics - Unit 2 - Test Review - Part 1 of 2
Economics - Unit 2 - Test Review - Part 1 of 2
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Review of GDP, monetary policy, and fiscal policy for on level Economics in high school
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1
An example of contractionary fiscal policy would be
cutting taxes.
decreasing government spending.
expanding government's role in regulating private industry.
increasing production of consumer goods.
2
Your receipt says you paid 5% sales tax on sports equipment. This sales tax is example of a
regressive tax.
progressive tax.
income tax.
proportional tax.
3
When you buy a United States Savings Bond, you
loan money to the government.
borrow money from a savings and loan association.
pay for your child’s college education.
donate money for special government projects.
4
Bob loses his job at GM plant because manufacturing is slow due to downturn in economy, he is
structurally unemployed.
seasonally unemployed.
frictionally unemployed.
cyclically unemployed.
5
The main source of funding for your school probably comes from:
local property taxes.
state sales taxes.
payroll taxes.
federal income taxes.
6
The main economic variables that affect business cycles include all of the following EXCEPT:
personal savings levels.
interest rates.
external events.
business investment levels.
7
In a typical business cycle, what stage immediately follows a peak?
growth
contraction (recession)
expansion (recovery)
trough
8
When revenues exceed expenditures,
there is a budget deficit.
the government must create more money.
there is a budget surplus.
the government is forced to issue more bonds to raise money.
9
An example of an automatic stabilizer is:
taxes.
interest rates.
inflation.
US savings bonds.
10
“Market basket” used by Bureau of Labor Statistics to calculate prices is made of:
typical goods & services for urban household.
food & necessary services for any family.
food items only.
nonfood items only.
11
What is an example of a positive external shock to aggregate supply?
Good weather leads to unusually productive harvest.
Popular new diet encourages consumers to buy more cornflakes
China announces it will import 50% more from USA.
Demand for new suburban houses increases farmland value.
12
The Office of Management and Budget is
part of the legislative branch of government.
responsible for deciding how much $ each agency gets.
private agency responsible for overseeing prep of budget.
office w/power approve/disapprove of Cong budget proposal
13
When you drive away from the gas pump, you have just paid a(n):
excise tax.
corporate income tax.
estate tax.
import fee.
14
GDP expressed in constant, or unchanging, prices is called:
price level.
nominal GDP.
real GDP.
net national product.
15
Products that would be used in calculating an increase or decrease in GDP include:
toys made in China at a U.S. factory.
cotton cloth made in India & sold to French clothes makers.
cars made in TN by a Japanese auto company.
plastic made in KY & sold to toy makers around the world.
16
What do Social Security taxes pay for?
benefits to those who are unemployed
benefits to older people/surviving family/some disabilities
transportation & living expenses for low income people
benefits to federal workers & military personnel
17
The purpose of expansionary fiscal policy is to
slow the growth of the GDP.
increase separation between government and private industry.
prevent hyperinflation.
increase output.
18
When the price level falls, consumers & firms buy more goods & services.This is:
business cycle.
aggregate supply curve.
aggregate demand curve.
equilibrium GDP.
19
What is the difference between a recession & a depression?
Recession is more severe than depression & lasts longer
Depression is deep recession w/high unemployment.
Recession is period of growth; depression is contraction
Unlike recession, depression includes high inflation.
20
As you move from left to right, the aggregate demand curve
slopes upward.
may slope upward or downward.
is horizontal.
slopes downward.
