Economics Final Exam Review 2023

complete the statement: Economics is the study of how people make choices about ways to use ______________________ resources to fulfill their unlimited wants and needs. 

• Limited

• Natural

• unlimited

• man-made

What are the factors of production?

• Land, Technology, Dirt, Resources

• Land, Labor, Capital, Entrepreneurship

• Resources used only in the production of services

• Entrepreneurs, Labor, Land

What is the central problem of economics? 

• Government

• Businesses

• Scarcity

• Opportunity Cost

The circular flow model shows how incomes, employment, and output are determined by exchange between…

• Government and people   

• Government and firms

• Households and labor markets

• Households and firms

A teacher gives extra credit, if students complete a study guide for an exam.

• Voluntary Exchange

• Negative Incentives

• Freedom and choice

• Positive incentives

Which of the following best explains a mixed economy? 

• Private ownership of the factors of production and regulation of businesses by government

• Market exchanges answer all three of the big economic questions

• Family customs and traditions determine what and how to produce a good

• Government answers all three of the big economic questions

What would best explain a decrease in the price of corn crops? 

• An increase in the income of consumers in the market 

• The introduction of a new technology in the production process

• A drought occurred which reduced the supply

• An increase in the price of gasoline

An increase in the general level of prices is known as 

• Deflation

• Inflation 

• Hyperinflation

• Stagflation 

Which of the following describes the role of the Federal Reserve System? 

• Guarantee the security of bank deposits and availability of cash for withdrawals

• Investigate fraud and financial crimes

• Control the money supply and regulate banks

• Loan money to private individuals

What term refers to the dollar value of all final goods and services produced within a country’s borders within a given year? 

• Gross National Product

• Producer Price Index

• Gross Domestic Product

• Consumer Price Index