Economic Concepts Quiz

In countries where businesses are government owned, what is the correct statement?

• there is less incentive to work hard.

• profits tend to be higher.

• productivity tends to be highest.

• the right amount of each good is produced.

What result is likely due to population shifts in the United States?

• Businesses that cater to older consumers will see slower growth.

• Health care will emerge as the only business sector that will grow.

• Businesses that cater to older consumers will see higher growth.

• Businesses that sell electronic devices will see a significant decline.

Many of the world’s largest firms agree that the U.S. economy and all businesses that participate in this economy were negatively impacted by recent wars. What is the correct statement?

• the standard of living for citizens in developing nations has significantly decreased due to globalization.

• global job creation will never occur if our politicians support world trade.

• the evidence for climate change is overwhelming.

• the service industry represents about 27% of U.S. workers.

The service industry represents about what percentage of U.S. workers?

• 27%

• 42%

• 78%

• 60%

In a small and poor nation, the current prime minister has a desire to improve conditions for her citizens. Which recommendation is likely to create the most wealth for the country?

• Establish barriers to trade to protect local businesses from foreign competition.

• Use foreign aid from other nations to purchase more tools and machinery.

• Establish a business environment that promotes and rewards entrepreneurship.

• Acquire more land by invading a neighboring country that is even poorer and weaker.

Although employment in the service sector has increased rapidly in recent years, the vast majority of workers are still employed in the goods-producing sector. True or False?

• True

• False

Efforts by the Federal Reserve Bank (the Fed) to control the money supply and interest rates are known as __________ policy.

• securities

• fiscal

• monetary

• trade

A senator is alarmed at the state of the economy. Unemployment is high and GDP is low. The senator has called for Congress to take action to increase government spending and cut taxes in order to stimulate the economy. These actions are examples of

• fiscal policy.

• discretionary income policy.

• monetary policy.

• social investment policy.

Economics was called the “dismal science” by Thomas Carlyle because he believed that

• too many people would result in food shortages and shortages of other resources.

• there were too many old people and not enough young people to care for them.

• the world population was declining, leading to widespread labor shortages.

• it was an overly complex area of study based on mathematics.

Which statement provides the most accurate comparison of socialism and communism?

• Under socialism, the government owns most businesses, while under communism the church owns most businesses.

• Socialism strives for an equal distribution of income, but communism wants income to go primarily to those who own and operate private businesses.

• Both socialism and communism strive to achieve a more equal distribution of income and wealth, but under communism, the government takes greater control.

• Communism believes that the government should always strive to balance its budget, while socialism accepts deficit spending as the price of achieving true equality.