Econ Test #2

What role do buyers and sellers play in a market economy?

• They do not play any role

• They value traditions over the economy

• They compete in the marketplace

• They do not compete in the marketplace

Which word means: a continuous rise in prices in an economy?

• Capital

• Depression

• Incentive

• Inflation

TRUE OR FALSE: Supply and demand curves must meet at one point

• TRUE

• FALSE

What kind of organization is OPEC?

• A Mafia

• A Bank

• An 80's Band

• A Cartel

Answer explanation

*Cartel-When groups band together to control the supply of a product for their best interests.

*OPEC is a group of countries that control the supply and price of oil

Who makes the decisions in a COMMAND economy?

• Businesses and Corporations

• Businesses and the Government

• Central planners (AKA the government)

• The people

What does the FED (Federal Reserve) do?

• Holds meetings with Congress every 6 months

• Advocates for labor unions

• Tells people where to bank

• Regulates the nation's money supply

Which term describes the following...

"More goods and services will be purchased at a lower price instead of a high price"

• Supply

• The Law of Supply

• Demand

• The Law of Demand

What economic system does the United States have?

• Market Economy

• Command Economy

• Mixed Economy

• Traditional Economy

Which term best describes a continuous rise in prices?

• Capital

• Inflation

• Recession

• Depression

On a Supply and Demand graph, which line slopes DOWN and to the RIGHT?

• The Demand Curve

• Surplus Level Curve

• The Supply Curve

• The Equilibrium Curve