Who would have the better credit score?

Individual A: lower credit usage and better payment history

What would the European Union's goal be by raising tariffs on US steel?

to protect its domestic steel industry

How could taking out (and repaying) a loan during high inflation benefit a borrower?

Repaid the loan with money that was worth less than expected.

Which action would MOST LIKELY result in the largest increase in a person's credit score in the next 6 months?

pays off $400 of the $450 credit debt he is carrying

What is the downside of the investments that have the highest potential returns?

they carry the highest risk that investors will lose their money

Which type of fiscal policy would be the MOST effective response to high inflation and what is potential risk of this?

reducing price levels with contractionary fiscal policy, reduction in GDP

What does the elimination of lower-skilled jobs by automation (such as robotics) lead to?

an increase in structural unemployment

When gasoline is limited in supply (without government intervention), how is the market for gas likely affected?

the price for gasoline will increase as it will become harder to find

After the US introduced new tariffs on imports from China, the Bank of China began to lower the yuan's value. Why?

devalued its currency to make Chinese goods less expensive for US buyers

What advantage is there to investing in a mutual fund instead of a company's stock?

diversifying investments can reduce risk of loss

After a period of tension (no trade) between 2 countries, how did the resumption of trade affect both countries?

each country gained access to goods and resources their country lacked

Why would someone choose to form a corporation over a partnership?

more capital, longer lives, & can protect against personal liability

How has globalization contributed to the US economy?

foreign goods have become more accessible to American consumers

How does education level effect supply and demand in the labor market?

higher levels of education equals the supply to be smaller

What is the opportunity cost for developed countries that enter free trade aggreements with less-developed countries?

developed countries gain access to new markets but lose less-skilled jobs

How would the government reducing taxes and increasing spending to combat recession, affect the US economy?

increasing inflation levels and stimulating consumer demand

What level of production would be ideal for a company producing a product if it is acting rationally?

where marginal cost and marginal revenue are equal

Portfolio A: 40% bonds, 30% US stocks, 20% foreign stock, 10% short term Portfolio B: 40% US stocks, 60% short term

A because diversifying investments helps minimize the risk of investment

What type of unemployment would occur during the contraction phase of the business cycle?

a rise in cyclical unemployment

How would the Navy ordering 2 Ford class aircraft carriers for $26 Billion affect GDP?

it will rise due to increased government spending

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Duplicate of Economics District Final Review

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Questions 23

Answers

1
When the government is pursuing expansionary fiscal policies, what are they most likely concerned about?
high unemployment rate
rapid economic growth
high inflation rate
rising budget deficits
2
Who would have the better credit score?
Individual C: higher credit limit and has not recently opened an account
Individual A: lower credit usage and better payment history
Individual B: lower credit limit and shorter account history
Individual D: higher credit usage with outstanding payments
3
What would the European Union's goal be by raising tariffs on US steel?
to protect its domestic steel industry
to raise demand for steel in Europe
to lower the cost of making steel
to increase trade with the United States
4
How could taking out (and repaying) a loan during high inflation benefit a borrower?
The bank benefited because the money repaid was worth more than expected.
Inflation rates on fixed loans are lowered when inflation rates rise.
Repaid the loan with money that was worth less than expected.
5
Which action would MOST LIKELY result in the largest increase in a person's credit score in the next 6 months?
closes his credit cards with the highest interest rates
pays off $400 of the $450 credit debt he is carrying
stops paying her mortgage to pay off her credit debt faster
applies for a new credit card with a $1000 limit
6
What is the downside of the investments that have the highest potential returns?
will be unable to access their money for a specific period of time
investors will lose their money if the bank holding it goes bankrupt
highest risk that the inflation rate will be higher than the return rate
they carry the highest risk that investors will lose their money
7
Which type of fiscal policy would be the MOST effective response to high inflation and what is potential risk of this?
reducing price levels with expansionary fiscal policy, increasing deficit
reducing price levels with contractionary fiscal policy, reduction in GDP
increasing demand through expansionary fiscal policy, reduction in GDP
increasing demand through contractionary fiscal policy, increase deficit
8
What does the elimination of lower-skilled jobs by automation (such as robotics) lead to?
an increase in cyclical unemployment
an increase in frictional unemployment
an increase in seasonal unemployment
an increase in structural unemployment
9
When gasoline is limited in supply (without government intervention), how is the market for gas likely affected?
demand for gas will decline until it is widely available again
temporary shortages of gas will result in a price reduction by producers
citizens will purchase substitute products to satisfy their demand for gas
the price for gasoline will increase as it will become harder to find
10
After the US introduced new tariffs on imports from China, the Bank of China began to lower the yuan's value. Why?
devalued its currency to make Chinese goods less expensive for US buyers
devalued its currency to make Chinese goods more expensive to US buyers
11
What advantage is there to investing in a mutual fund instead of a company's stock?
diversifying investments increases short-term returns
mutual funds signify an ownership interest in a company
mutual funds provide regular dividend payments
diversifying investments can reduce risk of loss
12
After a period of tension (no trade) between 2 countries, how did the resumption of trade affect both countries?
each country gained access to goods and resources their country lacked
each countries government adopted communist economic principles
each countries government adpoted free-market economic principles
each countries people benefitted from a more equal distribution of wealth
13
Why would someone choose to form a corporation over a partnership?
more capital, longer lives, & can protect against personal liability
less regulations than a partnership
corporations don't last as long as partnerships
14
How has globalization contributed to the US economy?
increased tariff use globally has negatively impacted demand for US goods
foreign goods have become more accessible to American consumers
domestic economic focus has shifted from the service to manufacturing
labor outsourcing has increased competition for domestic jobs
15
How does education level effect supply and demand in the labor market?
lower levels of education equals larger supply of labor
lower levels of education equals demand to be higher
higher levels of education equals the supply to be smaller
higher levels of education equals demand to be lower
16
What is the opportunity cost for developed countries that enter free trade aggreements with less-developed countries?
developed countries gain access to new markets but lose less-skilled jobs
developed countries gain highly skilled jobs but lose access to new markets
developed countries gain less-skilled jobs but lose highly skilled jobs
developed countries gain less-skilled jobs but lose access to new markets
17
How would the government reducing taxes and increasing spending to combat recession, affect the US economy?
hindering foreign trade activity
contributing to surpluses and reducing budget deficits
increasing inflation levels and stimulating consumer demand
18
What level of production would be ideal for a company producing a product if it is acting rationally?
where marginal cost and marginal revenue are equal
where marginal revenue is greater than marginal cost
where marginal revenue is far greater than marginal cost
where marginal cost is far greater than marginal revenue
19
Which type of investments generally have the highest potential returns?
US Treasury bonds
shares of stock
savings accounts
certificates of deposit
20
Portfolio A: 40% bonds, 30% US stocks, 20% foreign stock, 10% short term Portfolio B: 40% US stocks, 60% short term
A because diversifying investments helps ensure a higher rate of return
A because diversifying investments helps minimize the risk of investment
B, because concentrating investments helps ensure a higher rate of return
B, because concentrating investments helps minimize the risk of investment
21
What type of unemployment would occur during the contraction phase of the business cycle?
a rise in seasonal unemployment
a rise in cyclical unemployment
a rise in structural unemployment
a rise in frictional unemployment
22
How would the Navy ordering 2 Ford class aircraft carriers for $26 Billion affect GDP?
it will fall due to increased consumer spending
it will rise due to increased consumer spending
it will fall due to increased government spending
it will rise due to increased government spending
23
What results when a population's wants and needs exceed the productive resources under the population's control?
entrepreneurship
specialization
scarcity
profit

Duplicate of Economics District Final Review Flashcards | StudBud