Economics Unit 4

Store of value allows someone to -

• save money and use it later

• compare prices at stores

• exchange goods and services

The U.S. government adjusting interest rates based on currency supply is part of -

• free enterprise system

• taxes

• gold standard

• monetary policy

To encourage competition the U.S. government -

• limits business monopolies

• tells businesses who to hire

• demands businesses to sell certain products

After leaving the gold standard, the U.S. printed more money making the dollar to become -

• more valuable

• the value stayed the same

• less valuable

Which of the following is the best definition of an economic indicator?

• A measure of how high the inflation rate is

• A measure that helps to analyze the overall health of the economy

• A measure that allows policymakers to improve our trade balance

• A measure that tells economists if the economy is operating at equilibrium

Gross Domestic Product (GDP) measures the dollar value of...

• all final goods and services produced within a country's borders in a year

• all goods and services produced within a country's borders in a year

• The total sales of products within a country's borders in a year

• The total value of all goods and services exported from a country in a year

Which of the following is NOT an advantage of a free market?

• Consumer Sovereignty

• Absence of Bureaucracy

• Optimal Allocation of Resources

• Fixed Prices

If a country has a favorable balance of trade, ...

• they are importing more than they are exporting

• they are exporting more than they are importing

• they are completely self-sufficient

• they share resources openly with other countries

If the United States can produce 50,000 tanks or 1 million cars, and Mexico can produce 75,000 tanks or 800,000 cars, given the same amount of resources, then which of the following are true?

• The United States has an absolute advantage in the production of tanks

• The United States has a absolute advantage in the production of cars

• The United States has a comparative advantage in the production of tanks

• Mexico has an absolute advantage in the production of cars

If the United States can produce 50,000 tanks or 1 million cars, and Mexico can produce 75,000 tanks or 800,000 cars, given the same amount of resources, then which of the following are true?

• Mexico has a comparative advantage in the production of cars

• Mexico has an absolute advantage in the production of cars

• The United States has a comparative advantage in the production of cars

• The United States has an absolute advantage in the production of tanks