Inflation occurs under which of the following conditions?

when money supply grows too quickly

What happens when you make a purchase using a credit card?

Credit card issuer pays the store, so you don't have to at time of purchase

The "market basket" is used by the Bureau of Labor Statistics to calculate prices is made up of which of the following?

typical goods and services for an urban household

Which of the following is NOT characteristic of a centrally planned economy?

There is a huge gap between the rich and poor.

What is the opportunity cost of a decision?

the most desirable alternative given up for the decision

A person who believed in the doctrine of laissez faire would disapprove of

government funding of education.

What is the opportunity cost of a decision?

the most desirable alternative given up for the decision

"Brain drain" occurs when...

an engineer leaves her LDC to work in a developed nation.

Mr. Tasich wins a cash prize of $1000. He needs this money to buy more stuff, so why put his money in savings account?

liquidity, since he'll need the money readily accessible.

What is the difference between a recession and a depression?

A depression is a deep recession with high levels of unemployment

What is one benefit provided by Social Security?

retirement income for the elderly

How did the Great Depression relate to the school of classical economics?

The Great Depression disproved the classical theory of laissez faire gov't

What does it mean when a person is underemployed?

The person has a job but they are overqualified for it.

You notice a sign in your bank that indicates deposits are FDIC insured. What protection does that give you?

If the bank fails, your deposits are protected up to $250,000.

What does it mean when the demand for a product is inelastic?

A price decrease does not have a significant impact on buying habits.

How would the US economy be characterized?

mixed, but on the side of the free market

How could the Chinese economy be characterized?.

mixed, but on the side of centrally planned

Using the Political Cartoon above, what message is the author demonstrating or trying to convey to the reader?

They are unhappy with cheaper goods/services created by trade agreements

In constrast with classical economics, Keynesian economics...

is less laissez-faire and more "hands on" with the economy

The Dow Jones Industrial Average consists of

30 stocks that are considered representative of the market as a whole.

The World Bank, the United Nations Development Program and the International Monetary Fund

provide development assistance to less developed countries.

What is a major disadvantage in the use of import barriers to make domestic goods cheaper?

Domestic manufacturers may lose economic incentive to become more efficient

Why does even a free market economy need some government intervention?

to provide for things that the marketplace does not address

The economy of China is in transition. What does that mean?

The economy is moving from central planning toward a market-based system.

Characteristics of developed nations include...

high per capita GDPs, low infant mortality rates, high literacy rates.

According to the demand-pull theory, what is responsible for inflation?

Demand for goods and services exceeds existing supply.

Using the image, in this market, a price of $1.00 would be an example of excess demand (example NYC Apart/rent control).

a price ceiling and possible shortage.

studbud

Economics Review

73 termsStudBud Administration504 plays

Imported from external platform

Flashcards73 cardsFPractice quizPHost liveL

Questions 73

Answers

1
Inflation occurs under which of the following conditions?
when China floods the market with cheap goods
when money supply does not grow fast enough
when money supply grows too quickly
when the government increases income taxes
2
What happens when you make a purchase using a credit card?
The money is immediately deducted from your account.
The place where you made the purchase receives the money within 24 hours.
Credit card issuer pays the store, so you don't have to at time of purchase
The amount of the purchase is deducted from a prepaid account.
3
The "market basket" is used by the Bureau of Labor Statistics to calculate prices is made up of which of the following?
typical goods and services for an urban household
food and necessary services for any family
food items only
nonfood items only
4
Which of the following is NOT characteristic of a centrally planned economy?
Education, healthcare and Social Security are guaranteed by the state.
There is a huge gap between the rich and poor.
The central government owns all land and capital.
The central government decides all the economic decisions
5
Based on the graph, which country is MOST LIKELY to have all three of its economic questions decided by their government
Russia
China
North Korea
Peru
6
What kind of market runs most efficiently when one large firm supplies all of the output?
perfect competition
imperfect competition
a natural monopoly
a network
7
What is the opportunity cost of a decision?
the different ways that a different person might have made the decision
the best possible way the question could have been decided
the most desirable alternative given up for the decision
the series of alternative decisions that could have been made
8
A person who believed in the doctrine of laissez faire would disapprove of
consumer sovereignty.
self-interest as the motivating factor in the free market.
the invisible hand of the marketplace.
government funding of education.
9
A country must make a decision between spending money on a hospital or on border security. What kind of decision is this
efficiency
thinking at the margin
opportunity costs
guns or butter
10
The US places a limit on the number of cars that can brought into the country for sale. This is an example of a(n):
subsidy
a voluntary export restraint
a customs duty
Import quota
11
What is the opportunity cost of a decision?
the series of alternative decisions that could have been made
the best possible way the question could have been decided
the most desirable alternative given up for the decision
the different ways that a different person might have made the decision
12
Who generally bears most of a sales tax when the demand for the good taxed is inelastic?
the consumer
the wholesaler
the producer
the retailer
13
An example of expansionary fiscal policy would be
Federal Reserve adjusts interest rates
lowering prices of consumer goods
cutting production of consumer goods
decreasing taxes
14
"Brain drain" occurs when...
a boy in an LDC dosen't go to college bc he has to run the family business
a young girl in an LDC stops attending school after eighth grade.
a student from a LDC goes to college in a developed nation and returns home
an engineer leaves her LDC to work in a developed nation.
15
Mr. Tasich wins a cash prize of $1000. He needs this money to buy more stuff, so why put his money in savings account?
receiving the maximum rate of return possible.
taking a risk in hopes that he'll get a high return.
making a long term investment.
liquidity, since he'll need the money readily accessible.
16
Which of the following is NOT a characteristic of a free market system?
Even distribution of wealth
Economic efficiency, freedom and growth
Competition, self-interest and incentives for innovation
Large gap between rich and poor
17
The lowest point in an economic contraction is called
a peak.
a recession.
a trough.
a depression.
18
What is the difference between a recession and a depression?
A depression is a deep recession with high levels of unemployment
A recession is more severe than a depression and lasts longer.
Unlike a recession, a depression includes high levels of inflation.
A recession is a period of economic growth
19
What is one benefit provided by Social Security?
compensation for all who lose jobs
cash transfers to workers injured on the job
medical care for the indigent
retirement income for the elderly
20
How did the Great Depression relate to the school of classical economics?
The Great Depression in the confirmed many theories of classical economics
Crises like the Great Depression were predicted by Adam Smith.
The Great Depression disproved the classical theory of laissez faire gov't
The issues of the Great Depression had no connection to classical economics
21
What does it mean when a person is underemployed?
The person is not making as much money as they need.
The person has been working but now is laid off.
The person is looking for work in a special field.
The person has a job but they are overqualified for it.
22
Amazon is laying off American workers and moving those jobs to India to reduce labor costs. This is an example of
seasonal unemployment
stagflation
outsourcing
cyclical unemployment
23
In what kind of economy does the government make all the decisions?
laissez faire
centrally planned
free enterprise
socialist
24
You notice a sign in your bank that indicates deposits are FDIC insured. What protection does that give you?
If you injure someone, they can't claim any of the first $100k in your bank
You are given a high rate of interest if your balance is at least $100k
If the bank fails, your deposits are protected up to $250,000.
withdrawing more than you have in your account, no penalty will be charged
25
What does it mean when the demand for a product is inelastic?
A price increase will have a significant impact on buying habits.
A price decrease does not have a significant impact on buying habits.
Customers are sensitive to the price of the product.
It is a product that has many substitutes.
26
Your pay stub deducts money for FICA. What specifically does the Federal Insurance Contributions Act fund?
Social Security and Medicare
personal exemptions and deductions
excise and estate taxes
state and city taxes
27
How would the US economy be characterized?
mixed, but on the side of the free market
centrally planned
mixed, but on the side of centrally planned
free market
28
What is the motivating force behind the free market?
specialization
competition
the invisible hand
self-interest
29
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that is reached?
equilibrium
supply and demand
price floor
excess demand
30
The main advantage of diversification as an investment policy is that it
offsets the effects of inflation on investments
increases investors' access to their money
guarantees a fixed rate of return on an investment
reduces risk to investors
31
What is a mortgage used to purchase?
Business Expenses
College tuition
Real estate
Car
32
How could the Chinese economy be characterized?.
free market
mixed, but on the side of centrally planned
centrally planned
mixed, but on the side of the free market
33
Using the Political Cartoon above, what message is the author demonstrating or trying to convey to the reader?
They are unhappy about the standard of living advancements.
They are happy with America's new trade partners
They are unhappy with cheaper goods/services created by trade agreements
They are happy about the financial impact of trade agreements
34
In constrast with classical economics, Keynesian economics...
relies more heavily on the laws of supply and demand.
emphasizes importance of individual businesses to the health of the economy
is less laissez-faire and more "hands on" with the economy
reduces the role of government.
35
The Dow Jones Industrial Average consists of
30 stocks that are considered representative of the market as a whole.
60 stocks selected from the NYSE, the NASDAQ-AMEX, and the OTC market.
the top-selling 250 stocks over a 10-year period.
500 different stocks that change annually.
36
To finance the improvements to Utica Community Schools, you or your parent may vote on a
junk bond.
treasury bond.
municipal bond.
money market bond.
37
The World Bank, the United Nations Development Program and the International Monetary Fund
provide development assistance to less developed countries.
promote domestic investment by wealthy elites of less developed countries
offer loans to individual entrepreneurs in developed nations.
give disaster relief, such as food aid, to nations in crisis.
38
What is a major disadvantage in the use of import barriers to make domestic goods cheaper?
Domestic manufacturers create more jobs for both citizens and immigrants.
Domestic manufacturers may lose economic incentive to become more efficient
The line between imported and domestic goods becomes harder to draw
Import manufacturers stop sending goods to the country with import barriers
39
New robotic machinery was installed to build cars faster. Now, cars take only a day to make, this growth is caused by...
human capital
technology
land and natural resources
production possibility curves
40
According to FIGURE 6.2, at the equilibirum price, how many slices of pizza will be sold?
300
150
250
200
41
Which of the following is NOT a monetary tool used by the Federal Reserve?
interest rates
money creation
the required reserve ratio
the tax system
42
Why does even a free market economy need some government intervention?
to make sure the government can fulfill its needs for military personnel
to ensure that the government has the freedom to tax as necessary
to provide for things that the marketplace does not address
so that the government has some control over factor resources
43
Which of the following does a government provide as part of a safety net for the people?
general elections every four years
unemployment compensation
a strong military defense
regulation of commerce
44
Investing in a money market mutual fund is a higher risk because unlike CDs, money market funds
must be held for a preset amount of time.
do not earn a fixed interest rate.
are not protected by the Securities and Exchange Commission.
are not insured by the FDIC.
45
The economy of China is in transition. What does that mean?
Individual firms are in the prices of being sold to the state.
Investments are determined by state control instead of private decisions.
Gov't rarely interferes in the market and is receptive to foreign investmen
The economy is moving from central planning toward a market-based system.
46
Characteristics of developed nations include...
low infant mortality rates, low life expectancy, high unemployment rates.
high unemployment rates, high infant mortality rates, high literacy rates.
high per capita GDPs, high infant mortality rates, low life expectancy.
high per capita GDPs, low infant mortality rates, high literacy rates.
47
According to the demand-pull theory, what is responsible for inflation?
Too much money is in circulation.
Demand for goods and services exceeds existing supply.
Producers raise prices to meet existing demand.
The economy is in a wage-price spiral.
48
The amount of money a person has left of his or her income after taxes is called
personal income.
national income.
disposable personal income.
aggregate income.
49
When a nation imports more than it exports, economists say it has which of the following?
national defense
trade deficit
trade surplus
balance of trade
50
A new runway opened up at the airport, and flights goes directly over your apartment. The noise of the airplanes is a...
negative externality
positive externality
free-rider problem
market failure
51
Using the image, in this market, a price of $1.00 would be an example of excess demand (example NYC Apart/rent control).
the equilibrium price.
a price ceiling and possible shortage.
a subsidy by the government.
a price floor and possible surplus.
52
Since bonds are considered among the safest investments, you would expect that they would
have high interest rates.
have low interest rates.
take a long time to mature.
mature quickly.
53
If the economy is in a recession, what will the Federal Reserve Board most likely do to initiate a recovery?
wait for the economy to improve
raise taxes
eliminate government jobs
lower interest rates
54
What would happen to the prices of US goods in Japan if the value of the dollar increases over the yen?
They will increase
They could increase of decrease
They will remain the same
They will decrease
55
A person who comsumes a good or service but does not pay for it is called which of the following?
an entrepreneur
a volunteer
a free rider
a private consumer
56
An accurate statement about bonds would be that
they entitle the holder to a share of ownership in a corporation.
they are usually a low-risk and low return investment.
they are generally held for 3 or 6 months.
they are insured by the FDIC.
57
Penny paints a portrait of John’s family in exchange for a table created by John. What kind of exchange is this?
with currency
with money
using a store of value
through bartering
58
The process by which regional economies, societies, and cultures became integrated through communication/transportation
global development.
none of the choices are correct.
world trade progress.
globalization.
59
Which of the following is an example of scarcity, rather than shortage?
A person wants an endless supply of everything but cannot have it.
A popular toy is sold out during the busy holiday season.
Gasoline was rationed in America during World War II.
You have spent your last penny and payday is a week away.
60
Which of the following is NOT an example of a government entitlement program?
Medicare
Military/Defense
Social Security
Medicaid
61
Ecuador has a comparative advantage in the production of bananas over the US. Which of the following statements is true?
The United States cannot produce bananas.
Ecuador produces bananas at a lower opportunity cost than the United States
Ecuador also has an absolute advantage in the production of bananas.
The United States has an absolute advantage in the production of bananas.
62
What is the difference between seasonal unemployment and structural unemployment?
Seasonal unemployment is rare in modern society, whereas structural is not
Seasonal unemployment occurs bc of schedules, structural bc of lack skills
Seasonal unemployment is among low-paid workers, structural is highly paid
Seasonal unemployment occurs in summer, structural can occur all year round
63
Recent forest fires are expected to cause the price of lumber to rise in the next 6 months. As a result we can expect
increase now to meet as much demand as possible.
fall in 6 months, but not now.
fall now.
increase in 6 months when the price goes up.
64
What is the name of the smallest amount that can legally be paid to most workers for an hour of work?
minimum wage
supply cost
equilibrium price
price floor
65
The state decided to cut education budgets. Which of the these would you anticipate in your upcoming school year?
reduction in transportation (busing)
a decrease in elective courses
all answers are correct
increased class sizes
66
One example of an entrepreneur is...
a lawyer in a high profile law firm that specializes in business law.
an Olympic ice skater who later decides to a professional ice show.
an artist who runs a business painting murals in offices/restaurants.
a writer who is hired by a film studio to adapt a novel into a screenplay.
67
What is the most effective way for consumers to make thier desires known to businesses?
all of the above
by the purchases they make
contacting government officials
by protesting and boycotting products
68
Which of the following is NOT a way to build good credit?
sign up and use credit cards responsibly
make all credits payments on time
pay cash for all purchases
get a personal loan from the bank
69
The main advantage of diversification as an investment policy is that it
increases investors’ access to their money.
guarantees a fixed rate of return on an investment.
reduces risk to investors.
offsets the effects of inflation on investments.
70
What is a positive externality?
an economic side effect that generates unexpected benefits
an extra payment to welfare recipients
cash flow that will benefit both government/ businesses interactions
to generate trade that will benefit people who are from other countries
71
Factors such as life expectancy, energy consumption, per capita GDP, literacy rates, and infant mortality rates are
measure the cultural output of a country.
measure the development of a country.
determine how much foreign aid will be provided to a country.
judge the worth of a nation and its people.
72
Which of the following people is most likely to be classified as "working poor"?
Carol is a single mother works 35/hr a week at a job that pays minimum wage
Jim is a full-time student with a work study job in the college library
Dolores, who has an advanced degree and works 40 hours a week
Jason works part time at a job to devote time to start up his own business
73
Adam Smith "The fact that economies will self regulate and don't need government intervention". This theory is known as
socialism.
self-interest.
invisible hand.
regulation.

Economics Review Flashcards | StudBud