EOC REVIEW

Loans extended for longer periods of time often involve higher interest rates in order to

• compensate the lender for greater risk

• compensate the buyer for using savings to make a purchase

• encourage consumers to buy durable goods for extended periods of time

• encourage savings

Which of the following results when federal government expenditures are less than the federal government's total receipts?

• a trade surplus

• a federal budget deficit

• a negative balance of payments

• a federal budget surplus

Interdependence and price leadership are characteristics of firms in what kind of market structure?

• monopoly

• oligarchy

• monopolistic competition

• perfect competition

If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose wold be

• decreasing taxes

• decreasing government spending

• reducing the investment tax credit

• balancing the budget

The power of labor unions in the United States is based on

• the principle of mutual advantage

• the ability to bargain collectively

• the fact that most unions are closed shops

• the principle of comparative advantage

Which of the following taxes is MOST regressive?

• the federal income tax

• a sales tax on food

• a luxury tax

• a corporate income tax

In a market economy, how are the basic economic questions of what, how, and for whom to produce answered?

• by using a nation's social customs and traditions

• by using a combination of traditional and command economies

• by the individuals and firms in the nation's marketplace

• by the nation's federal and/or local government

Which of the following is a microeconomics decision?

• whether to increase or decrease the money supply

• whether to increase or decrease taxes

• how to reduce the unemployment rate

• how many hours an employee should work each week

In which market structure does a firm have greatest control over it's products price?

• perfect competition

• monopoly

• oligopoly

• monopolistic competition

In which economic system does the government own the means of production?

• traditional

• mixed

• market

• command