Economics Final Review

What is the main idea behind the study of Economics?

• allocation of resources

• efficiency of production

• monetary policy

In every economic system, what must people choose to do?

• satisfy the wants of their society

• make the best use of the scare resources

• save money to reduce the national debt

Which of the following is a positive result of the specialization of labor?

• increased output

• identical income

• more taxes to pay for schools

Which of the following choices will guarantee that an individual will make money on the stock market?

• buying stocks from smaller companies that will grow

• buying stocks from large companies like Amazon and Apple

• nothing will guarantee making money in the stock market

Which is a true statement about investing in bonds?

• They entitle the holder to a share of the ownership in a company.

• They are a low-risk investment

• They will work best if held for three to six weeks, then sold.

Which of the following describes a publicly owned corporation?

• Family members are excluded from holding stock.

• Large numbers of stockholders can buy and sell stock.

• They sell things only to people and not to other businesses.

Your running shoes are designed in the U.S. and assembled in Asia. What type of enterprise does this involve?

• general partnership

• domestic partnership corporation

• multinational corporation

In a market economy, what determines the price and quantity of most goods produced?

• quality of goods

• supply and demand

• economic policies

Which of these actions would most likely result in a decrease in consumer spending?

• increasing income taxes

• decreasing the interest rate

• increasing government spending

If a government sets a maximum price for a good or a service, what does it create?

• price floor

• price ceiling

• inflated price