PBMF 1st Semester Exam part 1

Which of the following is an economic need?

• a. water

• a. concert tickets

• a. a loaded SUV

• a. a new television

If everybody had an unlimited supply of economic resources, which of the following would not exist?

• b. wants

• b. scarcity

• needs

• b. capitalism

Which of the following is NOT an especially important principle of the U.S. economic system?

• tradition

• private property

• freedom of choice

• profit

Generally, as the price of a product increases,

• demand will increase.

• consumers will be willing to purchase larger quantities of the product

• businesses will be willing to supply larger quantities of the product

• the supply curve will slope downward

GDP measures a country’s economic output during

• Five years

• One week

• One year

• One month

If wages increase faster than gains in productivity, prices will rise. Why?

• Because the cost of producing goods decreases

• Because demand will increase for all products

• Because the cost of producing goods increases

• Business owners will demand higher prices because they know workers have more money to spend.

If GDP growth slows for at least ____________________ quarter(s) in a calendar year, the economy is probably in a recession

• 3

• 1

• 2

• 4

The interest rate banks charge their best business customers is the

• discount rate

• T-bill rate

• prime rate

• mortgage rate

Which of the following is an example of a

capital project?

• A large corporation gives all employees a 5 percent wage increase

• A small office buys several boxes of paper for the printer

• A small business purchases two new pickup trucks

• A mid-size company restocks the supply cabinet with pencils and markers

Which of the following scenarios is likely to

cause the value of a country’s currency to rise?

• increased demand for the nation’s products and currency

• higher interest rates

• prolonged inflation

• sudden change in government