SS8B Final Exam

How does the Federal Reserve manage inflation?

• It lowers interest rates to slow economic activity.

• It raises interest rates to increase economic activity.

• It raises interest rates to slow economic activity.

• It reduces the money supply to slow economic activity.

Why is there interdependence among nations?

• because each country has unique and limited resources

• because of a declining demand for products from other nations

• because trade agreements govern trade among nations

• because all nations want to trade with other nations

Which explain the relationship between education, earning potential, and job opportunities?

• The unemployment rate for people with advanced degrees is higher than the unemployment rate for people with less education.

• People with advanced educations have more job opportunities due to their educational achievements.

• Many jobs that require specialized education offer higher minimum and maximum salaries.

• People with advanced degrees are more productive and more likely to get promotions.

What does the government use to track the market value of goods and services produced in a given year?

• standard of living

• gross domestic product

• inflation rate

• labor productivity

Which statements are true about international trade?

• Restrictions on international trade are beneficial to American consumers

• International trade helps foster positive relationships with other nations.

• International trade makes a greater variety of products available to consumers.

• Consumers are not directly affected when nations place trade barriers on one another

In a free market economy economic decisions are made by the government.

• True

• False

In a mixed market economy economic decisions are influenced by the government but made by producers and consumers

• True

• False

In a command economy economic decisions are influenced by the government but made by producers and consumers

• True

• False

The primary motive of business in a mixed market economy is to make a profit?

• True

• False

What are the effects of competition in a mixed market economy?

• Competition leads to lower prices.

• Competition leads to more choices.

• Competition leads to more government regulations

• Competition leads to higher prices and lower demand.