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