Why must the questions of What, How, and For Whom to Produce be asked?

unlimited wants and limited resources

What would cause a Demand Curve to shift to the left?

a decrease in the price of a complementary good

What happens when gasoline prices in the US greatly increase?

cars that use less gasoline become more popular

What would happen if the price of a substitute good increased?

the demand curve would shift to the right

Which action would the Federal Reserve take to reduce unemployment?

decrease requirement to obtain credit

How would new Chinese automobiles affect US automobile markets?

expanded consumer choice will drive down prices

To control inflation, which fiscal and monetary policies would be most effective?

increasing taxes and raising interest rates

What economic change best explains a reduction in coffee prices?

improved technology for commercial production

What would happen if a frost destroyed 25% of the annual Orange Harvest?

prices will increase and supply will decrease

Which is an example of a monopoly?

local water company is the sole provider for a small town

What is the most likely result of imposing a price ceiling on a particular product?

demand exceed supply and result in a shortage

Which measurement best indicates the economic growth of a country?

per capita Real Gross Domestic Product

What would happen if banks refused to lend money?

it would be difficult to start new businesses

Which statement best defines deflation?

fall in the general price level of goods and services

What is the best description of the US minimum wage?

lowest rate legally paid to any worker

Which reason would cause the Federal Reserve to lower the reserve requirements?

to encourage banks to make more loans

How does an Entrepreneur represent a central factor in a market economy?

Expect rewards for taking risks with their assets

Which best describes the relationship between supply and demand?

high demand and low supply will increase prices

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Unit 9 (The American Economy)

35 termsStudBud Administration22 plays

Factors of Production, Demand and Supply, Economic Systems

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Questions 35

Answers

1
Why must the questions of What, How, and For Whom to Produce be asked?
inequality in the distribution of resources
forces of supply and demand are unreliable
unlimited wants and limited resources
opportunity cost of specialization is high
2
What would a Job Ad in a newspaper signifiy?
a shortage of natural resources
a shortage of capital
a shortage of labor
a shortage of entrepreneurs
3
What do Government Spending, Taxation, and Public Transfer Payments have in common?
Tools of Federal Monetary Policy
Measures of Aggregate Expenditures
Tools of Federal Fiscal Policy
Measures of Domestic Investments
4
What would cause a Demand Curve to shift to the left?
an increase in the quantity of a substitute good
a decrease in the price of a complementary good
an increase in the price of an inferior good
a decrease in the quantity of a competing good
5
What happens when gasoline prices in the US greatly increase?
less investment in solar energy
gasoline refineries will increase their use of oil
number of people using public transportation decreases
cars that use less gasoline become more popular
6
What type of business has Double Taxation and Limited Liability?
partnership
nonprofit
sole proprietor
corporation
7
Which of the following would NOT cause prices to increase?
Supply decreases
Consumer demand increases
Production increases
8
Which question is being answered when a car company produces more of its top-selling model?
How to produce
When to produce
Where to produce
What to produce
9
What would happen if the price of a substitute good increased?
the supply curve would shift to the right
the demand curve would shift to the right
the supply curve would shift to the left
the demand curve would shift to the left
10
Which action would the Federal Reserve take to reduce unemployment?
insure against risk in financial markets
increase the sales of municipal bonds
increase the national supply of money
decrease requirement to obtain credit
11
Prices of inputs, Technology, Expectations, and Taxes and Subsidies shift what?
Marginal Benefit
Supply
Fixed Costs
Consumption
12
How would new Chinese automobiles affect US automobile markets?
improvements in technology will enhance reliability
expanded consumer choice will drive down prices
increased demand for a product will cause prices to rise
more intense competition will reduce the quality of goods
13
To control inflation, which fiscal and monetary policies would be most effective?
lowering taxes and raising the reserve requirement
increasing taxes and lowering discount rates
lowering taxes and buying bonds
increasing taxes and raising interest rates
14
What is the primary role of consumers in a free market economy?
to meet government production goals
to sustain traditional production methods
to balance the forces of supply and demand
to purchase goods and services
15
What is it called when the business cycle is falling and will continue to fall?
expansion
recession
trough
peak
16
How does the free enterprise system address the problem of scarcity and choice?
central planning
laws of supply and demand
subsidy programs
market regulations
17
What economic change best explains a reduction in coffee prices?
rapid wage increases for factory workers
adoption of tariffs on imported goods
improved technology for commercial production
increased need for subsistence farming
18
How does long-term unemployment affect the economy?
decreases consumer spending
increases interest rates on loans
increases diversification in financial markets
increases low skill labor
19
Which of the following is a Factor of Production?
Regulation
Entrepreneurship
Consumer demand
Urban growth
20
What term describes a student's decision between going to the movies or studying for a test?
opportunity cost
equilibrium price
income effect
comparative advantage
21
What would happen if a frost destroyed 25% of the annual Orange Harvest?
demand would increase and prices will decrease
prices will increase and supply will decrease
supply will remain stable and prices will decrease
prices will remain the same and demand will increase
22
Which is an example of a monopoly?
local water company is the sole provider for a small town
small number of cereal comps. produce most on the market
farmer produces green beans for sale at a farmers' market
a dry cleaner specializes in enviro. friendly cleaning
23
How does a business adjust for surplus of goods produced?
use the same price
lower prices
raise prices
24
How does the Federal Reserve System act to reduce inflation?
reduces income taxes
increases interest rates
reduces government spending
increases business taxes
25
What is the most likely result of imposing a price ceiling on a particular product?
buyers lose interest in purchasing that product
sellers decide to produce more of that product
supply exceeds demand and results in a surplus
demand exceed supply and result in a shortage
26
Which measurement best indicates the economic growth of a country?
average hourly earnings
per capita Real Gross Domestic Product
the rate of new employment
the Consumer Price Index
27
What would happen if banks refused to lend money?
it would be easy to buy new equipment
it would be difficult to locate raw materials
it would be easy to hire new employees
it would be difficult to start new businesses
28
What is the most likely result of a policy intended to stimulate economic growth?
Economic efficiency will increase
Inflation will rise
Economic equity will increase
Unemployment will rise
29
Which statement best defines deflation?
unpredictable rise in prices
fall in the value of currency
fall in the general price level of goods and services
legal restrictions on competition
30
What is the best description of the US minimum wage?
starting pay for workers entering any new job
amount paid for part time work
pay rate determined by labor unions
lowest rate legally paid to any worker
31
Which reason would cause the Federal Reserve to lower the reserve requirements?
to prevent inflation
to lower government expenditures
to encourage banks to make more loans
to stabilize the discount rate
32
Which Fiscal Policy would help stimulate production throughout the state?
reducing tax rates
increasing government borrowing rates
reducing government spending rates
increasing interest rates
33
Which of the following is the most common business organization?
sole proprietor
nonprofits
partnership
corporation
34
How does an Entrepreneur represent a central factor in a market economy?
Often play key roles in business management
Expect rewards for taking risks with their assets
Seek support from outside investors
Can use income to diversify their holdings
35
Which best describes the relationship between supply and demand?
low demand and low supply will increase prices
low demand and high supply will show no change in price
high demand and low supply will increase prices
high demand and high supply will decrease prices

Unit 9 (The American Economy) Flashcards | StudBud