National debt is different than government deficits in that

national debt is the sum of all past deficits plus interest.

In a mixed economy,the three economic questions what, how, and for who to produce isanswered by

the individuals and firms in the nation’s marketplace.

These four categories are the method calculating GDP

Consumption, Investment, Government Spending, Net Exports

Stocks are shares of a corporation, a shareholderin a corporation

A shareholderis part owner of that business.

Demand is refered to as

How much consumers willpurchase at different prices

An example ofstructural unemployment in an economy is a person who is

without job skills that match the economy’sneeds.

Opportunity cost is defined as

valueof the best alternative forgone when a choice is made

When thereis inflation in an economy....

Theconsumer price index has increased

If a nationencourages entrepreneurship, then which of the following is likely to occur?

thedevelopment of many new products and production methods

What happens to the curve when household income increases?

Thedemand curve will shift to the right.

What do aggregate supply and aggregate demand determine?

price level and real GDP in an economy

How are equilibrium price and quantity determined?

theinteraction of buyers and sellers

help domestic producers but hurt domesticconsumers.

Rational decisionmaking in economics involves comparing an action’s

marginal benefits and marginal costs.

In a mixed economy, how are public goods paid for?

taxes collected from firms and individuals

Which headline supports what has happened in the graph?

“Study shows orange juice causes disease”

What do NAFTA, EU,and ASEAN have in common?

They are all interested in promoting free trade.

How do tariffs workin the United States to protect infant industries

protect the new industries from foreign competition

What BEST explains the shift of the production possibilities curve from P1 to P2?

improvementsin agricultural technology

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Questions 40

Answers

1
National debt is different than government deficits in that
deficits include all debts owed over time with interest.
deficits only apply to monetary decisions madeby Congress.
debt only includes money owed for the current fiscalyear.
national debt is the sum of all past deficits plus interest.
2
When the money supply increases
The price level will increase.
The price level will decrease
The price level will not be affected.
Each dollar will be able to buy more goods.
3
Characterizes unlimited wants that exceed limited resources
surplus
specialization
shortage
scarcity
4
In a mixed economy,the three economic questions what, how, and for who to produce isanswered by
the individuals and firms in the nation’s marketplace.
a nation’s social customs and traditions.
a combination of market and command economies.
the nation’s federal and/or local government.
5
Economic system where producer smake goods that consumers like and are willing to pay for
market
traditional
command
socialism
6
Federal minimun wage is a
price floor
price ceiling
7
These four categories are the method calculating GDP
Consumption, Investment, Government, Business expenditures
Consumption, Interest Rates, Government, Net Exports
Consumption, Investment, Government Spending, Net Exports
Wages, Rent, Interest, Dividends
8
A cooperative lendingorganization that focuses on servicing a particular group ofcustomers is
A finance company.
A savings bank.
A savings and loan association.
A credit union.
9
After a contractionary period, which stage of the business cycle will be experienced next?
trough
cyclical
expansion
peak
10
Stocks are shares of a corporation, a shareholderin a corporation
A shareholdermay not transfer shares without permission.
A shareholderis part owner of that business.
Does not share in the earnings of that corporation.
Are liable for anydebts accumulated by that corporation.
11
Demand is refered to as
How much consumers willpurchase at different prices
how much sellers will supply at a particular price
how much people want the product if it is free
Satisfaction buyers receive from a purchase
12
TheFederal Reserve System conducts its business directly with
stockmarkets and bond markets
the governmentand banks
individualsand firms
productmarkets and factor markets
13
An example ofstructural unemployment in an economy is a person who is
unemployed due to a seasonal downturn in business.
unemployed due to a change in the business cycle.
without job skills that match the economy’sneeds.
between jobs or entering the work force.
14
Working on one task during the production process is
specializationof labor
work focus
15
Elasticity of supply and demand is the result of
monetary policy
trade offs
opportunity costs
price changes
16
Opportunity cost is defined as
monetary value forgone when a choice is made
valueof the best alternative forgone when a choice is made
sumof all production costs
mostexpensive resource used in production
17
When thereis inflation in an economy....
Theconsumer price index has increased
The purchasingpower of the dollar increases.
Exportsto other countries increases.
Unemploymentwill automatically decrease.
18
Which economic goal gives everyone a chance to be succesful within the economy?
Economic Stability
Economic Security
Economic Equity
Economic Growth
19
Competition and freeenterprise are most common in which type of economic system
command
market
traditional
planned
20
Which of the following explains a capital investment?
purchasing equipment
printing flyers for a business
renting a space for a business
hiring employees
21
If a nationencourages entrepreneurship, then which of the following is likely to occur?
fewerapplications to the United States Patent Office
adecline in the number of new businesses started
littlechange in overall production of goods and services
thedevelopment of many new products and production methods
22
Which factor is LEASTlikely to affect whether or not someone gets credit?
current credit score
payment history
regular income source
ownership of a car
23
The period of the business cycle that is chracterized as "bottoming out" is the
peak
contraction
expansion
trough
24
The economic system in which the government own the means of production
traditional
command
market
mixed
25
Term which command economic system MOST closely associated?
perfectcompetition
entrepreneurship
absoluteadvantage
governmentalregulation
26
What happens to the curve when household income increases?
Thedemand curve will shift to the right.
The supplycurve will shift to te left.
The supplycurve will shift to the right.
Thedemand curve will shift to the left.
27
The actions theFederal Reserve takes to influence the level of real GDP is called
monetary policy
labor policy
fiscal policy
budget policy
28
If the government wanted to encourage spending by consumers, afiscal policy to use would be
reducingthe investment tax credit
balancingthe budget
decreasinggovernment spending
decreasingtaxes
29
Comparing real GDP between two consecutive years is useful in determining
equilibrium price
economic growth
equity
exchange rates
30
What trade barrier isbeneficial to both domestic producers AND domestic consumers of a good?
subsidy
tariff
embargo
quota
31
What do aggregate supply and aggregate demand determine?
inflation and unemployment in an economy.
price and quantity in an economy.
stage of the business cycle in the economy.
price level and real GDP in an economy
32
How are equilibrium price and quantity determined?
thegovernment in their role as price setter.
much money isavailable in the economy.
theinteraction of sellers and producers.
theinteraction of buyers and sellers
33
A tariff will
help both domestic and foreign producers.
help domestic producers but hurt domesticconsumers.
help foreign producers and domestic consumers.
hurt both domestic and foreign producers.
34
Rational decisionmaking in economics involves comparing an action’s
allocation of resources
trade-offs.
marginal benefits and marginal costs.
opportunity costs.
35
In a mixed economy, how are public goods paid for?
taxes collected from firms and individuals
Donations from corporations
36
Which headline supports what has happened in the graph?
“Government imposes heavy tax on orange juice”
“Government imposes heavy tax on orange juice”
“Study shows orange juice causes disease”
“Producers reducing supply of orange juice”
37
Which person below would be considered frictionally unemployed?
Person who shut down business
Person who recently exits the labor force
Parson who quit their job
Person whose skills are no longer needed.
38
What do NAFTA, EU,and ASEAN have in common?
All three groups use the same currency.
They are all interested in promoting free trade.
Each group attempts to enforce trade barriers rigidly.
The United States is a member of all three.
39
How do tariffs workin the United States to protect infant industries
reduce sales taxes
Protect the new industries from domestic competition
Increase competition for the new industry
protect the new industries from foreign competition
40
What BEST explains the shift of the production possibilities curve from P1 to P2?
inflationaryincreases in process
improvementsin agricultural technology
highercosts of producing corn
highercosts of producing wheat

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