Unit 1: CFA 4 (Standard 4) Review

Which of the following best defines "human capital"?

• The total value of a country's exports

• The skills, knowledge, and experience possessed by individuals

• The amount of money in circulation

• The number of factories in a country

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GA.9-12.SSEF4

What does a production possibilities curve (PPC) illustrate?

• The relationship between supply and demand

• The maximum combinations of goods and services that can be produced with available resources

• The total population of a country

• The amount of money in the economy

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GA.9-12.SSEF4

Which of the following is an example of investment in equipment and technology?

• A worker attending a training seminar

• A company purchasing new machinery for its factory

• A government increasing taxes

• An individual saving money in a bank

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GA.9-12.SSEF4

Specialization in production most often leads to which of the following outcomes?

• Decreased efficiency

• Increased output and efficiency

• Higher unemployment

• Lower quality products

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GA.9-12.SSEF4

Which of the following is a benefit of voluntary, non-fraudulent trade?

• Both parties can be made better off

• Only the seller benefits

• Only the buyer benefits

• It always leads to inflation

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GA.9-12.SSEF4

How can investment in education affect an individual's standard of living?

• It has no effect

• It can increase earning potential and job opportunities

• It always leads to unemployment

• It decreases productivity

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Which of the following best describes economic growth?

• A decrease in the price level

• An increase in the production of goods and services over time

• A reduction in government spending

• A decrease in exports

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GA.9-12.SSEF4

If a country invests in healthcare for its citizens, what is a likely result?

• Lower productivity

• Higher human capital and improved standard of living

• Decreased life expectancy

• Increased unemployment

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GA.9-12.SSEF4

A nation that specializes in producing goods for which it has a comparative advantage will most likely experience which of the following?

• Lower overall output

• Greater efficiency and higher total output

• Increased trade barriers

• Decreased standard of living

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GA.9-12.SSEF4

Suppose a business invests in new technology for its production process. What is the most likely impact on its production possibilities curve (PPC)?

• The PPC will shift inward

• The PPC will shift outward

• The PPC will remain unchanged

• The PPC will become a straight line

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GA.9-12.SSEF4