A budget surplus exists when

Government spending is less than tax revenue

What is Gross Domestic Product?

market value of nation's final goods and services

Which would increase the quantity of shoes sold in a competitive market?

increase in the income of consumers

What is a Regressive tax?

Higher percentage of income if you earn less

An economy's potential output is limited by

Quantity and Quality of resources

How do budget deficits contribute to the national debt

The national debt is increased by each budget deficit

What is social security Tax?

Payment for retired people/ people with certain disabilities

The role of entrepreneurs is

Take risk of starting new businesses

All of the things you give up when you make a choice

Which approach to controlling pollution is most economically efficient?

Reduce pollution as long as marginal benefits > costs

What is a positive externality of a high school

Student purchases from nearby stores

The opportunity cost of a new city park is...

The library the city wants but can no longer afford

Inflation is an increase in

general level of prices over time

Specialization of labor results in...

increase in output per hour worked

What do we call land, labor, and capital?

Factors of production, Productive resources

Why do some people support tariffs?

To protect American industry from foreign competition

If a monopoly is broken up what would we expect to happen?

increase output and decrease prices

A student buys a sweatshirt from the school store that is on sale at 20% off. In this example

Both the student and store benefit

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Economics Final Review

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Questions 34

Answers

1
Economies that grow rapidly over time normally have a high rate of
Investment in Technology
Growth in gold reserves
Unemployment
Tariffs
2
When the economy is working properly what is the inflation rate?
4-6%
8-10%
2-3%
0%
3
Which is not a basic economic question?
Who gets it?
What to produce?
Who is going to produce it?
How to produce?
4
An example of contractionary fiscal policy
decrease income tax
decrease worker wages
decrease government spending
decrease production of consumer goods
5
A budget surplus exists when
Taxes are increased
Government spending is higher than tax revenue
Government spending is less than tax revenue
National Debt is decreasing
6
Which best measures a nations standard of living over time?
Inflation rate
Unemployment Rate
GDP
7
If economists predict a Inflation what should the Federal reserve do with interest rates?
Increase interest rates
Leave them alone
Decrease interest rates
8
What is Gross Domestic Product?
price level of goods and services sold
total spending by governments
market value of nation's final goods and services
quantity of goods and services produced
9
Which would increase the quantity of shoes sold in a competitive market?
decrease in taxes on shoes
increase in the income of consumers
increase in the price of shoes
10
What is a Regressive tax?
Higher percentage of income if you earn less
Lower percentage of income if you earn less
Different amounts for low incomes
Different for all incomes
11
An economy's potential output is limited by
amount of money in circulation
business demand for final goods and services
Quantity and Quality of resources
government regulations
12
Common Stocks, limited liability, and unlimited life are characteristics of?
corporations
proprietorships
cartels
partnerships
13
How do budget deficits contribute to the national debt
The national debt is reduced by each budget deficit
The national debt is unrelated to each budget deficit
The national debt is increased by each budget deficit
14
How are prices determined in the market system?
government
collective bargaining
lawsuits
competition
15
A factory worker loses her job when the factory is converted to a high-tech computer lab is
Frictional Unemployment
Cyclical Unemployment
Structural Unemployment
Seasonal Unemployment
16
In a market economy, high wages depend mostly on
high output per worker
actions of government
responsible business leaders
minimum wage laws
17
What is social security Tax?
Payment for people who are temporarily unemployed
Wages to federal workers and military personnel
Payment for retired people/ people with certain disabilities
Transportation and training for low income workers
18
The role of entrepreneurs is
Buy and sell stocks
Limit the liability of investors
Take risk of starting new businesses
Tell the government which products to buy and sell
19
What is a trade off?
The next best alternative given up
All of the things you give up when you make a choice
The price of making a decision
20
Why might the federal government decrease taxes?
decrease business spending
slow down a rise in interest rates
increase consumer spending
slow down rate of inflation
21
Which approach to controlling pollution is most economically efficient?
Adopt laws that prohibit pollution causing activities
Reduce pollution as long as marginal benefits > costs
Clean up all pollution
Abolish the use of toxic chemicals
22
What is a positive externality of a high school
Student purchases from nearby stores
Less traffic
Increase in property taxes
More Noise in the neighborhood
23
The opportunity cost of a new city park is...
Increased Traffic around the Park
Cost of maintenance
Negative effects on the neighborhood around the park
The library the city wants but can no longer afford
24
What is the basic problem of economics?
Choices
Resources
Ms. Ingberg
Scarcity
25
Profits are equal to
total sales minus taxes
total revenue minus total cost
total sales minus wages and salaries
total assets minus total liabilities
26
Inflation is an increase in
standard of living over time
general level of prices over time
interest rates over time
real GDP over time
27
Specialization of labor results in...
increase in inflation
increase in output per hour worked
a more equal distribution of income
decrease in economic interdependence
28
What do we call land, labor, and capital?
Factors of production
Stuff
Economic Goods
Productive resources
29
What is the primary function is money serving when it is used to buy a ticket to a movie?
flow of funds
store of value
medium of exchange
unit of account
30
If interest rates go down people will...
save less and borrow more
save less and borrow less
save more and borrow more
save more and borrow less
31
Why do some people support tariffs?
To provide lowest possible prices
To protect American industry from foreign competition
to profit on imports
to encourage the free flow of goods
32
If a monopoly is broken up what would we expect to happen?
increase output and increase prices
decrease output and increase prices
decrease output and decrease prices
increase output and decrease prices
33
A student buys a sweatshirt from the school store that is on sale at 20% off. In this example
Neither the student or store benefit
Both the student and store benefit
The store benefits but the student doesn't
The student benefits but the store doesn't
34
When the economy is working properly what is the unemployment rate?
2-3%
0%
8-10%
5-6%

Economics Final Review Flashcards | StudBud