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Economics Final
Economics Final
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An Economics Quiz to help prepare for the final exam.
Flashcards
50 cards
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Practice quiz
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Questions
50
Answers
1
What is the term for a period where real GDP declines for 6-18 months in a row?
inflation
depression
expansion
recession
2
What is the situation where prices are stable, and supply is equal to demand?
shortage
expansion
surplus
equilibrium
3
What is the situation that occurs when demand is greater than supply?
inflation
equilibrium
surplus
shortage
4
What type of unemployment increases and decreases with changes in the business cycle?
frictional
cyclical
structural
seasonal
5
The idea that countries should specialize and trade is supported by
the law of increasing costs
the theory of absolute advantage
Classical economics
the law of comparative advantage
6
How does inflation have an impact on economic decisions?
People are forced to rely on government assistance
It can cause severe declines in the stock market
It can cause people to lose jobs and relocate their families
Money loses value, which reduces your purchasing power
7
Which cause of inflation occurs when rising prices of inputs (energy) cause prices to increase?
cost-push inflation
demand-pull inflation
wage-price spiral
excessive monetary growth
8
What are the three basic economic questions?
How much, from whom, and when to borrow?
What, how, and for whom to produce?
When, where, and why to produce?
When, how, and with whom to trade?
9
What is term for the expense of the next best alternative use of time, money, or resources?
opportunity cost
capital
inflation
trade-off
10
When a change in price causes a large change in the quantity purchased, demand is
unpredictable
unitary elastic
elastic
inelastic
11
What are the four factors of production?
land, labor, capital, and entreprenuership
What to produce, how to produce, when and for whom to produce.
resources, money, investment, and trade
traditional, market, mixed, and centrally planned
12
The place where supply meets demand is called
Equilibrium
Central Cost
Middle
Prime investment
13
The idea that an investor should put their money into many different assets to reduce risk
deficit spending
equity
fiscal policy
portfolio diversification
14
A board of governors, 12 district banks, and 2,500 member banks and institutions are part of
the World Trade Organization
the International Monetary Fund
the Federal Deposit Insurance Corporation
the Federal Reserve
15
Which of the following is NOT one of the reasons why nations trade?
all countries want to help each other
unequal resource distribution
natural resources are scarce
availability of capital
16
A market structure in which a few very large sellers dominate the industry is
a monopoly
monopolistic competition
perfect competition
an oligopoly
17
What is the situation that occurs when supply is greater than demand?
surplus
equilibrium
inflation
shortage
18
What is the term for the dollar value of all final goods produced in a country in a given year?
exchange rate
marginal revenue
gross domestic product
capital
19
Which of the following is NOT a disadvantage of owning a sole proprietorship?
Owners have limited control over business decisions
Owners have unlimited liability
They often have limited managerial experience
They often have limited life
20
What is the largest source of revenue for the federal government?
intergovernmental revenue
individual income tax
corporate income tax
sales tax
21
A market structure with only one seller of a product is
monopolistic competition
a monopoly
an oligopoly
perfect competition
22
The flow of finished goods and services from businesses to households primarily takes place in the
Financial Market
Factor Market
Intermediate Good Market
Product Market
23
The philosophy that a government should not interfere in economic activities is known as
globalization
communism
elasticity
laissez-faire
24
What does APR stand for?
Annual Policy Rating
Annual Pricing Rate
Annual Percentage Rate
Annual Population Rate
25
Selling a stock for more than the original price paid is called
a dividend
a capital loss
a capital gain
inflation
26
Which of the following is the best example of a fixed cost?
Ingredients
None of the above
Rent
Labor
27
In a market economy, who decides what goods and services are produced?
Congress
local government
producers
consumers
28
The branch of economics that deals with the economy as a whole
macroeconomics
consumer economics
microeconomics
performance economics
29
A tax on goods and services imported into the country?
quota
Import
Export
tarrif
30
The use of government spending and taxes to influence the economy is known as
reserve policy
monetary policy
fiscal policy
budgetary policy
31
Which of the following is NOT one of the 6 Economic Goals?
Growth
Control
Equity
Security
32
A diagram used to show the exchange of goods between households and firms in a market economy
production possibilities curve
circular flow model
supply and demand curve
Lorenz Curve
33
When consumers are forced to buy fewer goods as a result of a price increase in another product
income effect
marginal effect
demand effect
substitution effect
34
When a change in price causes a small change in the quantity produced, supply is
unitary elastic
unpredictable
elastic
inelastic
35
Which of the following can lead to a change in supply?
Changes in population
The price of related substitutes
Changes in resource prices
Consumer tastes and advertising
36
Changing monetary policy to expand or contract the money supply will cause
interest rates to change
supply and demand to change
government revenues to change
the national debt to change
37
What type of economy has most factors of production owned by a government?
market
mixed
command
traditional
38
According to the law of supply, when the price of an item goes up
the supply will increase
the supply will not change
the supply will decrease
the supply will change unpredictably
39
Which institution is the safest of all financial assets to invest in?
Junk Bonds
the Federal Government (bonds)
City/State governments (municipal bonds)
Corporations (corporate bonds)
40
A form of business organization that sells stock, recognized by law as a separate legal entity.
corporation
non-profit
sole proprietorship
partnership
41
What is the most commonly used monetary policy tool?
the required reserve ratio
the crowding-out effect
open market operations
the discount rate
42
A Price Floor will always cause ____________?
Surplus
Equilibrium
Shortage
More demand than supply
43
The Law of Supply says producers will offer _______ of their product as the price goes up.
less
the same amount
more
all answers are wrong
44
A form of business organization that combines elements of sole proprietorships and corporations
cooperative
franchise
partnership
non-profit
45
According to the law of demand, an increase in price will cause
increased demand for complements
a decrease in demand
reduced demand for substitutes
an increase in demand
46
The cost of borrowing money is called
monetary policy
principal
the required reserve ratio
interest
47
An increase in the number of consumers in the market place does what
Decreases quantity demanded
Increases demand
Decreases supply
Decreases quantity supplied
48
What is the fundamental problem that economics deals with?
recession
inflation
unemployment
scarcity
49
When an economy is utilizing resources to their full potential, they are operating at their
supply and demand equilibrium
peak of the business cycle
production possibilities frontier/curve
per capita GDP
50
Expansion, peak, contraction, and trough are the four phases of
unemployment
monetary policy
development
the business cycle
