Econ4/11

Read the scenario.

The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP.

Based on the scenario, who is most affected by the situation taking place within Country D?

• the workers of Country D

• the businesses of Country D

• the government, workers, and businesses of Country D

Which of these policies would a government take when it comes to employment?

• seeing that at least a quarter the workforce has a job

• working toward making unemployment is as low as possible

• making sure that only skilled workers get jobs

Which of the following statements most accurately describes the federal government and its employees?

• Millions of Americans work for the federal government.

• The federal government is not allowed to hire employees.

• The majority of Americans are employed by the federal government.

What is the main goal in creating the federal budget?

• managing businesses and increasing spending on all programs

• deciding how to manage the government’s tax revenue and expenditures

• finding a way to allow the economy to run on its own

Which of these is most likely the US government’s aim in taxing imported goods?

• to protect domestic businesses

• to decrease international trade

• to end reliance on foreign goods

Which best explains how contractionary policies can hamper economic growth?

• They increase consumer demand.

• They reduce taxes which raises deficits.

• They reduce disposable income.

Property taxes are usually determined based on

• the amount of money invested in the property.

• the earnings generated by the property.

• the value of the property.

What is the full name of the US central bank, known as the Fed?

• the Federal Reserve Bank

• the Federal Financial Institution

• the Federal Bank

Which best describes what a central bank uses monetary policy to do?

• influence financial institutions globally

• ensure that the government is sufficiently funded

• steer the economy away from recession and toward growth

When the Fed adjusts its interest rate, it directly influences consumer

• spending.

• borrowing.

• investing.