Test of Economic Literacy

A large increase in the number of fast-food restaurants in a community is most likely to result in:

• Lower prices and higher quality.
• Lower prices and lower quality.
• Higher prices and higher quality.
• Don't Know

A person who starts a business to produce a new product in the marketplace is known as:

• A manager.
• A bureaucrat.
• An entrepreneur.
• Don't Know

An increase from 5% to 8% in the interest rates charged by banks would most likely encourage:

• Businesses to invest.
• People to purchase housing.
• People to save money.
• Don't Know

If the real gross domestic product of the United States has increased, but the production of goods has remained the same, then the production of services has:

• Increased.
• Decreased.
• Remained the same.
• Don't Know

If the price of beef doubled and the price of poultry stayed the same, people would most likely buy: 

• More poultry and less beef.
• Less poultry and more beef.
• The same amount of poultry and beef.
• Don't Know

If the United States stopped importing automobiles from Country X, who would be most likely to benefit?

• Automobile manufacturers in Country X
• Consumers in the United States
• Automobile manufacturers in the United States
• Don't Know

If your city government sets a maximum amount landlords can charge in rent, what is the most likely result?

• There will be more apartments available than people want to rent.
• There will be fewer apartments available than people want to rent.
• The number of apartments available will be equal to the number of people that want to rent.
• Don't Know

In the United States, who determines what goods and services should be produced?

• Producers and government
• Consumers and government
• Producers, consumers, and government
• Don't Know

Mexico grows fruits and vegetables and Argentina produces beef. If Mexico voluntarily trades fruits and vegetables in exchange for Argentinean beef

• Both Mexico and Argentina benefit from the trade.
• Both Mexico and Argentina lose from the trade.
• Mexico benefits and Argentina loses from the trade.
• Don't Know

The resources used in the production of goods and services are limited, so society must:

• Make choices about how to use resources.
• Try to obtain additional resources.
• Reduce their use of resources.
• Don't Know