Economics Semester Exam Review

What might the federal reserve do to slow down the rate of inflation?

• slow the growth of the money supply
• print more money
• keep the supply of money the same
• encourage people to make more money

What function of money is being used when you use it to purchase something?

• store of money
• medium of exchange
• short-term loan
• unit of accounting

Scarcity is a basic economic problem because-

• resources are limited
• governments limit production
• opportunity costs limit demand
• people have trouble making choices

Which of the following describes a primary role of the government in a free enterprise economic system?

• allocating the factors of production
• setting price and wage controls
• regulating consumer demand
• protecting property rights

With a given amount of resources, a country with a comparative advantage will produce a product with —

• cheaper natural resources
• lower opportunity costs
• decreased demand
• higher quality

Opponents of free trade agreements argue that these agreements adversely affect which group of people?

• consumers
• employers
• workers
• governments

Which of the following is most accurate  characteristic of the U.S. free enterprise system?

• public ownership of the factors of production
• markets that respond to consumer demand
• nationalization of energy companies
• government price controls

Economic systems that are characterized by government control of the economic decision making process are considered to be —

• communist
• free market
• choice based
• efficient

 What is one way the U.S. economy can be adversely affected when interest rates are lowered?

• less capital may be available
• tax rates may decrease
• prices may inflate
• unemployment may increase

-no special taxes, unlimited liability, easy to manage, complete ownership, difficult to raise capital
Which type of business is described above?

• corporation
• sole proprietorship
• partnership
• limited liability partnership