Economics Unit 4 & 5 Review

Question 1

A financial institution's primary responsibility in our economy is to

Accepted Answer

Provide access to capital for people and business

Question 2

When the U.S. went off the gold standard, the value of the U.S. dollar declined because

Accepted Answer

More currency was printed thus reducing its value

Question 3

A decrease in production and high unemployment could indicate the business cycle has entered a period of

Accepted Answer

Recession

Question 4

One advantage a corporation has over a sole proprietorship is

Accepted Answer

Limited liability

Question 5

When the Federal Reserve wants banks to hold more money and not loan it to borrowers, it will

Accepted Answer

Increase the reserve requirement

Question 6

Gold, Silver, and precious stones are examples of

Accepted Answer

Commodity Money

Question 7

Cities pass ordinances determining the size of houses built on city lots. Why do cities enact these regulations?

Accepted Answer

Protect property owneers already living in the neighborhood

Question 8

All of the following are tools the Federal Reserve uses to control monetary policy EXCEPT

Accepted Answer

Increase or decrease taxes on individuals

Question 9

A rise in the overall level of prices is called

Accepted Answer

Inflation

Question 10

What was the purpose of the 16th Amendment?

Accepted Answer

Created Income Tax

Question 11

Which of the following is both a federal revenue source and a federal expenditure?

Accepted Answer

Social Security

Question 12

Board members serve 14 yr terms, 12 districts, President appoints chairman, and Nationally chartered banks describe

Accepted Answer

The Federal Reserve System

Question 13

Which of following type of tax on goods & services is collected by state and local governments?

Accepted Answer

Sales tax

Question 14

The largest increases in government expenditures from 2008-2013 have been in category of payments for Social Security.

Accepted Answer

True

Question 15

A store of value, medium of exchange, and standard of value describes the

Accepted Answer

Functions of money

Question 16

The ___________ appoints the Chairman of Federal Reserve for a _______ term.

Accepted Answer

President, 4 year

Question 17

One advantage of a debit card is it allows you to

Accepted Answer

Access money without carrying cash

Question 18

Who is responsible for conducting monetary policy in the United States?

Accepted Answer

The Federal Reserve

Question 19

When inflation becomes a problem, the Fed will use contractionary monetary policies to

Accepted Answer

Decrease the amount of money in circulation

Question 20

How is economic growth affected by introducing new technologies?

Accepted Answer

It creates growth by increasing productivity of labor

Question 21

One of the characteristics of an expansionary period in the business cycle is

Accepted Answer

Low unemployment

Question 22

When the economy is expanding, the government may use a contractionary fiscal policy in order to

Accepted Answer

Address inflation issues

Question 23

RaceTrac wants to build a convenience store in a residential area in Wylie. Which govt restrictions will they encounter?

Accepted Answer

Zoning laws

Question 24

In our free enterprise system, the government is responsible for

Accepted Answer

Ensuring the safety of products through regulation

Question 25

One NEGATIVE impact on the U.S. economy when interest rates are lowered is

Accepted Answer

Prices may increase(inflation)

Question 26

All of the following are functions of financial institutions EXCEPT:

Accepted Answer

Assist people in preparing their taxes

Question 27

When more money is required to be kept in bank reserves, and less is available for loans to businesses, the Fed has

Accepted Answer

Raised Reserve Requirement

Question 28

Who is responsible for conducting fiscal policy in our country?

Accepted Answer

The U.S. Government

Question 29

Easy to manage, complete ownership, unlimited liability, difficult to raise capital are

Accepted Answer

Characteristics of Sole Proprietorships

Question 30

Money has value because the government says it does is called

Accepted Answer

Fiat money

Question 31

Who is the current Chairman of the Federal Reserve?

Accepted Answer

Jerome Powell

Question 32

When businesses are increasing output and unemployment is low, we are experiencing

Accepted Answer

Economic growth

Economics Unit 4 & 5 Review

Questions 32

Economics Unit 4 & 5 Review

Questions 32