Fall Economics Exam Part 2 Questions 26-50

26. 26. One result of competition in a free enterprise system is--

• a) fewer consumer choices

• b) lower prices for products

• c) steady wages and income

• d) improved safety conditions

27. 27. Which characteristic of the U.S. free enterprise system creates the incentive to work, save, and invest?

• a) Social Security system

• b) Voluntary exchanges

• c) Private property ownership

• d) Consumer sovereignty

28. 28. Based on the information in the excerpt, what economic condition indicates that Sweden's economy is based on socialism despite its use of free market reforms?

• a) Reductions in government spending

• b) Privatization of social welfare system

• c) High levels of administrative inefficiency

• d) Government funding of education and healthcare

29. 29. Which of the following best completes the graphic?

• a) Stock Exchange

• b) Federal Reserve System

• c) Treasury Department

• d) Washington, D.C.

30. 30. Which of the following is is largely responsible for the growth of a free enterprise system?

• a) Government

• b) Profit motive

• c) Gross Domestic Product

• d) Market Efficiency

31. 31. How does new money enter into circulation in the United States?

• a) It is distributed by banks, which get it from the Federal Reserve

• b) It is distributed to taxpayers each year in the form of tax refunds.

• c) Large businesses use the Federal Reserve to exchange their old money for new.

• d) The FDIC distributes new money when insurance claims are paid out to Federal stockholders.

"The most important source of state government revenue."

"Primarily transferred from federal government to state governments."

"The most important source of local government revenue."

32. 32. All of these statements are true of---

• a) taxes

• b) income tax revenue

• c) transfer payments

• d) intergovernmental revenue

33. The smallest form of business organization is the _____.

• a) corporation

• b) sole proprietorship

• c) monopoly

• d) partnership

34. Division of labor is practiced because _____.

• a) companies do not want workers to talk to one another

• b) it increases efficiency by ensuring that workers become good at every taks.

• c) it increases efficiency by ensuring that workers become good at specific tasks.

• d) it prevents specalization.

35. Which of the following statements best describes the purpose of the production possibilities curve?

• a) It predicts the future production of a nation.

• B) it identifies trends in produciton.

• c) It shows which products are most profitable.

• d) It identifies all possible combinations of goods and services an economy can produce.