How is real GDP different from nominal GDP?

Real GDP is calculate using constant prices

According to Keynesian economics, gov't could prevent, or reduce the severity of, inflation by

applying a contractionary fiscal policy

What do Social Security taxes pay for?

benefits to older citizens & people will certain disabilites

An example of capital deepening would be

paying for an employee to take college courses

A company that makes sneakers is underutilizing its resources. What does this mean?

It is producing fewer sneakers than it should be.

Antifederalists opposed the national bank because

Scared wealthy would use it to be more powerful

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Final Exam

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Questions 18

Answers

1
What is the main source of tax revenue for local governments?
income taxes
property taxes
sales taxes
inheritance taxes
2
How is real GDP different from nominal GDP?
Real GDP is calculate using constant prices
Real GDP is true, nominal GDP is false
Nominal GDP remains the same
Nominal GDP is more accurate
3
All goods and services are scarce because
greedy people want too many goods
things are either needs or wants
some goods cost more than others
resources are limited
4
John gets a raise,starts buying wheat pasta instead of cheaper noodles. For John, noodles are:
complements
market demand
inelastic
inferior goods
5
Coins are easier to use than gold bars as money because coins are more
portable
limited
durable
uniform
6
According to Keynesian economics, gov't could prevent, or reduce the severity of, inflation by
increasing federal spending
increasing transfer payments
applying a contractionary fiscal policy
applying an expansionary fiscal policy
7
An example of expansionary fiscal policy would be cutting
gov't spending
workers' wages
production of consumers' goods
income taxes
8
What do Social Security taxes pay for?
benefits to older citizens & people will certain disabilites
support for temporarily unemployed
transportation and training for low income people
wages to federal workers & military
9
An example of capital deepening would be
laying off employees
moving a plant overseas where labor is cheaper
permitting 2 workers to share 1 job
paying for an employee to take college courses
10
A company that makes sneakers is underutilizing its resources. What does this mean?
It is paying its employees less than it should be.
It is making sneakers when it could be making cleats instead
It is producing fewer sneakers than it should be.
It is more efficient than its competitors.
11
Which of the following has contributed to a recent banking crisis?
bank fraud
sub-prime mortgages
greenbacks
wildcat banks
12
According to theory of supply-side economics, if gov't raises taxes from 50% to 75% of income
gov't revenue will increase
gov't spending will decrease
gov't spending will increase
gov't revenues will decrease
13
Antifederalists opposed the national bank because
They thought nat'l gov't would be better at regulating banks
Scared wealthy would use it to be more powerful
They wanted to secure loans with foreign countries
They wanted a uniform money supply
14
Your demand for a good is inelastic if you consider the good to be
normal
essential
inferior
replacable
15
When a theater owner considers whether to install another row of seating, she is
using human capital
thinking at the margin
experiencing a shortage
underutilizing her resources
16
Which of the following is an example of state spending?
Social Security
city parks
defense spending
public safety
17
How much control over price do companies in a perfectly competitive market have?
some
very little
none
total control
18
One way that firms in a monopolistic competition engage in nonprice competition is through
advertising
variable costs
production
fixed costs

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