Economics Final Exam

What is "scarcity?"

• It is a fundamental economic concept that says that as price rises, quantity demanded falls.
• It is a fundamental economic concept that says that as price falls, quantity supplied rises.
• It is a fundamental economic concept that says that the demand for a good or service is greater than the availability of that good or service.
• It is a fundamental economic concept that says that people make economic decisions based on incentives.

Which of the following is a POSITIVE economic incentive?

• coupon
• parking ticket
• library fine
• speeding ticket

How is monetary policy different from fiscal policy?

• Monetary policy involves the money supply, while fiscal policy involves government taxing and spending decisions.
• Fiscal policy involves the money supply, while monetary policy involves government taxing and spending decisions.
• Fiscal policy involves specific steps taken to carry out the overall monetary policy.
• They are the same.

What is the point where the supply and demand curves intersect called?

• inefficient production
• unattainable production
• equilibrium
• price floor

The two types of fiscal policy are

• crowding out and crowding in.
• reserve requirements and discount rate.
• expansionary and contractionary.
• demand-side and supply-side.

If GDP is decreasing and the unemployment rate is increasing, which fiscal policy would the government MOST likely use?

• increase taxes
• decrease taxes
• increase bank reserves
• decrease spending

Which market structure has only one seller?

• Oligopoly
• Monopoly
• Perfect Competition
• Monopolistic Competition

Which economic goal is focused on protecting consumer, producers, and resource owners from risks in society?

• Economic Security
• Economic Growth
• Economic Freedom
• Economic Stability

The tools of fiscal policy include

• spending.
• taxing.
• borrowing.
• all of the above

According to the Law of Demand, what happens when price increases?

• quantity demanded increases
• quantity supplied increases
• quantity demand decreases
• quantity supplied decreases