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WorksheetsMacro Quiz 1
Total questions: 100
Worksheet time: 1hrs 2mins
Name
Class
Date
1.
GDP expressed in constant, or unchanging, (adjusted for inflation) prices is called
a)
real GDP.
b)
price level.
c)
nominal GDP.
d)
GNP
2.
Which of the following would be counted in this year’s GDP?
a)
The value of a loan taken out this year
b)
The value of a television produced last year but sold this year
c)
The sale of a previously occupied house
d)
The value of a savings bond sold by the federal government to investors this year
3.
In a typical business cycle, what stage immediately follows a peak?
a)
contraction
b)
expansion
c)
trough
d)
growth
4.
When the economy is working properly, what is the unemployment rate?
a)
0 to 3 percent
b)
4 to 6 percent
c)
8 to 10 percent
d)
10 to 12 percent
5.
During a recession, which of the following is likely to occur?
a)
an increase in real wages
b)
an increase in production
c)
and increase in the GDP growth rate
d)
an increase in the unemployment rate
6.
Which of the following is the best measure of a nation’s standard of living?
a)
Real GDP per capita
b)
Nominal GDP
c)
Unemployment
d)
Inflation
7.
The “cost” of credit is known as this.
a)
Credit score
b)
Savings
c)
Deductible
d)
Interest
8.
Seasonal Unemployment technically falls under which of the 3 main categories?
a)
Frictional
b)
Cyclical
c)
Structural
d)
Underemployment
9.
The major economic problem caused by unemployment is the
a)
loss of wages and salaries to households
b)
level of job search allowances paid by the government
c)
loss of economic efficiency and wastage of resources
d)
higher crime rate
10.
The unemployment rate is calculated as the number of
a)
unemployed persons divided by number of employed persons
b)
persons in the labour force divided by the number of unemployed
c)
unemployed divided by size of the labour force
d)
employed
persons divided by number of unemployed persons
11.
An example of structural unemployment is the
a)
decision to stand down employees with redundant skills
b)
shutdown of a manufacturing plant due to a world recession
c)
decision by an employee to take a holiday before looking for a new job
d)
decision
by an employee to leave Australia to seek work overseas
12.
The annual expression of fiscal policy in the light of current economic conditions. A statement of anticipated revenue, expenditure and borrowing by the government in a year
a)
fiscal policy
b)
budget
c)
monetary policy
d)
crowding out effect
13.
What do Social Security taxes pay for?
a)
benefits to federal workers and military personnel
b)
benefits to those who are unemployed
c)
transportation and training expenses for low-income people
d)
benefits to older citizens, surviving family members of wage earners, and people with certain disabilities
14.
Which of the following is one reason the federal government collects income taxes as a person earns?
a)
so that people do not realize exactly how much they are paying
b)
so that the money can be put aside until it is needed
c)
so that the government can pay bills as they come due
d)
so that taxpayers can qualify for refunds of excess tax
15.
Supporters of Keynesian economics believe that
a)
government should be used as a tool to increase demand for goods.
b)
demand for goods increases when prices rise.
c)
taxes have a strong negative influence on economic output.
d)
the government should have a limited role in regulating the economy.
16.
How could the Federal Reserve encourage banks to lend out more of their reserves?
a)
reduce the discount rate
b)
raise the required amount of reserve
c)
increase the prime rate
d)
reduce the money supply
17.
How many Federal Reserve Districts are there?
a)
6
b)
9
c)
12
d)
20
18.
Open market operations are
a)
the processes by which money enters into circulation.
b)
reserves greater than the required amounts
c)
the buying and selling of government securities to alter the supply of money.
d)
rates of interest banks charge on short-term loans to their best customers.
19.
Who owns the Federal Reserve System?
a)
all commercial banks in the country
b)
all banks in the country
c)
the federal government
d)
member banks
20.
Consumer Spending is the largest portion of GDP
a)
True
b)
False
21.
A period of time when recovering from a recession?
a)
peak
b)
trough
c)
expansion
d)
trend line
22.
The Consumer Price Index (CPI) can be defined as
a)
The market value of all final goods and services
b)
A measure of inflation based on the cost of a fixed “market basket”
c)
The rise and fall of economic activity relative to the long-term growth trend
d)
A decline in total production lasting at least two consecutive quarters
23.
Inflation that occurs when a country experiences very high and usually accelerating rates of inflation, rapidly eroding the real value of the local currency, and causing the population to minimize their holdings of local money.
a)
Cost-push inflation
b)
Hyperinflation
c)
Demand-pull inflation
d)
Deflation
24.
The increase in unemployment caused by the recession phase of the business cycle is called
a)
Frictional unemployment
b)
Structural unemployment
c)
Cyclical unemployment
d)
Seasonal Unemployment
25.
If the economy is in a recession, which policy would Congress want to enact to fix the problem?
a)
expansionary monetary policy
b)
contractionary monetary policy
c)
expansionary fiscal policy
d)
contractionary fiscal policy
26.
Which type of economists believe that the economy is self correcting and does not need government intervention?
a)
Keynesian economists (Keynes)
b)
Monetarist economists
c)
Supply-side economists
d)
Classical economists (Hayek)
27.
An economy’s maximum sustained output in the long run (long run aggregate supply) is known as its
a)
Total Output
b)
Resource Output
c)
Potential Output
d)
Market Output
28.
Which of these is the BEST definition of GDP?
a)
a description of the quality of life in a nation
b)
average value of production of intermediate goods
c)
a collection of all government assets that could earn money
d)
market value of all goods and services produced in a country
29.
The process by which the Federal Reserve controls the supply, availability, and cost of money in order to keep the economy stable is
a)
fiscal policy
b)
monetary policy
c)
interest rate
d)
reserve requirement
30.
Which of the following is a stage of the business cycle?
a)
Procession
b)
Trough
c)
Slide
d)
Valley
31.
Which of the following is not an economics indicator discussed in class?
a)
Presidential Policy
b)
Inflation
c)
Gross Domestic Product
d)
Unemployment
32.
Which of the following type of spending do not fall under GDP?
a)
Investment
b)
Government
c)
Imports
d)
Consumer
33.
In the business cycle, growing G.D.P. and inflation are signs of a recession.
a)
True
b)
False
34.
The value of money is greater as prices inflate over the course of history.
a)
True
b)
False
35.
Government spending makes up the largest portion of the nations G.D.P.
a)
True
b)
False
36.
Unemployed plus employed
a)
Unemployed
b)
Unemployment Rate
c)
Labor Force
d)
Total Population
37.
Goods that last fewer than 3 years
a)
Intermediate Goods
b)
Non-Durable Goods
c)
Final Goods
d)
Durable Goods
38.
Unemployment caused by regular transition periods
a)
Frictional Unemployment
b)
Structural Unemployment
c)
Seasonal Unemployment
d)
Discouraged Workers
39.
Someone without a job, but looking
a)
Frictional Unemployment
b)
Structural Unemployment
c)
Discouraged Workers
d)
Unemployed
40.
Unemployment caused by lack of skills or demand
a)
Structural Unemployment
b)
Frictional Unemployment
c)
Seasonal Unemployment
d)
Discouraged Workers
41.
Goods used to create finished products
a)
Final Goods
b)
Non-Durable Goods
c)
Intermediate Goods
d)
Durable Goods
42.
is a way to illustrate how a regular group of goods and services changes over time.
a)
Consumer Price Index
b)
Final Goods
c)
Market Basket
d)
Durable Goods
43.
Unemployment caused by by a deficiency of total spending. The overall demand for goods and services decreases.
a)
Frictional Unemployment
b)
Structural Unemployment
c)
Seasonal Unemployment
d)
Cyclical Unemployment
44.
Which is the equation for unemployment rate
a)
E/LF
b)
U/LF
c)
(E+U)/LF
d)
LF/U
45.
Which is an example of government spending?
a)
Road Construction
b)
Clothes
c)
Housing
d)
Food
46.
What is the gold standard?
a)
A system that used actual gold coins as a country’s money.
b)
A system in which a country’s money is backed with gold.
c)
A currency system in which each dollar is worth 1/20 of a pound of gold.
d)
A money system in which paper currency is good for more than one country.
47.
How does a bank make most of its profit on its business?
a)
By collecting fees on credit card purchases.
b)
By collecting fees on safety deposit boxes, traveler’s checks and certified checks
c)
By receiving fees from the government for handling federal and state accounts
d)
By paying out less interest on deposits than it earns in interest on loans
48.
Savers and borrowers are linked through financial institutions when
a)
both savers and borrowers invest in the same markets.
b)
savers deposit money that is then used to lend money to borrowers.
c)
the financial institutions offer the same rate of exchange to each.
d)
borrowers take money from financial institutions to invest with savers.
49.
What is the money an investor receives above and beyond the money initially invested called?
a)
Savings
b)
Liquidity
c)
Return
d)
Investment
50.
Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction?
a)
using a store of value
b)
through credit
c)
through bartering
d)
with currency
51.
Specific type of loan used to buy real estate:
a)
FDIC
b)
Loan
c)
Mortgage
d)
Bear Market
52.
The coins and paper bills used as money in a society
a)
Prices
b)
Currency
c)
Bond
d)
Checks
53.
An institution for receiving, keeping and lending money
a)
Bank
b)
Bond
c)
Stock
d)
Company
54.
What does the New York Stock Exchange do?
a)
Buys and sells stocks but not bonds for private investors who have extremely large amounts of money to invest.
b)
Arranges stock and bond trading of the largest and most established companies in the United States.
c)
Handles stock and bond trading on the internet.
d)
Arranges the buying and selling of blue chip stocks only.
55.
How many district banks are in the Federal Reserve?
a)
1
b)
5
c)
8
d)
12
56.
Natural disasters can cause:
a)
A great economy
b)
People to panic
c)
Car loans to get cancelled
d)
All money to be removed from service
57.
This is the price paid for borrowing money:
a)
Principal
b)
Interest
c)
Maturtity
d)
Cost
58.
This is the total amount borrowed:
a)
Principal
b)
Interest
c)
Maturity
d)
Investment
59.
Which is not a purpose of banks?
a)
store money
b)
cash checks
c)
sell insurance
d)
give checking accounts
60.
____________ Policy is how the Fed influences the supply of money.
a)
Fiscal
b)
Financial
c)
Monetary
d)
Insurance
61.
What acts as the bank for the banks and promotes a healthy economy?
a)
The Federa Reserve
b)
FBI
c)
SunTrust
d)
The Federal Notes
62.
Banks create money by taking in deposits, making _______ and charging _______
a)
interest, payments
b)
loans, interest
c)
payments, loans
d)
debt, loans
63.
Supervising banks and ___________ are 2 jobs of the Federal Reserve.
a)
Collecting tax revenue
b)
building schools
c)
protecting the economy
d)
conducting political campaigns
64.
A sign of inflation would be....
a)
Too many jobs
b)
decrease in production
c)
high prices of goods and services
d)
low taxes
65.
A sign of recession in the economy would be...........
a)
high employment rate
b)
increased taxes
c)
increase production
d)
high unemployment rate
66.
Less consumer spending is a sign the economy is in a ____________
a)
inflation
b)
recession
67.
True or False
The Federal Reserve supervises banks to keep them healthy.
The Federal Reserve supervises banks to keep them healthy.
a)
true
b)
false
68.
If interest rates are low; what will consumers typically do?
a)
spend more
b)
spend less
69.
If the interest rates are low what will businesses typically do?
a)
Produce more
b)
Produce less
70.
The central bank of the United States.
a)
Loan
b)
Interest
c)
Federal Reserve
d)
Inflation
71.
Company that keeps track of your credit history.
a)
Credit Reporting Bureau
b)
Credit Counseling
c)
Investment
d)
Entrepreneur
72.
Which of these is not a physical property of money?
a)
Durability
b)
Responsbility
c)
Portability
d)
Divisibility
73.
When did the Great Depression hit?
a)
1920
b)
1925
c)
1959
d)
1929
74.
If there is less money in circulation, the value of the dollar
a)
Decreases
b)
Doesn't change
c)
Increases
d)
All of these
75.
Banks offer
a)
Security, justice, respect
b)
Security, loans, financial support
c)
Love, sacrifice, happiness
d)
Hills, mountains, rivers
76.
This occurs when stock prices decline steadily
a)
Bear Market
b)
Money Market
c)
Bull Market
d)
Capital Gains
77.
Refers to income not used for consumption
a)
Debit
b)
Primary Market
c)
Savings
d)
Assets
78.
Market where long term assets are bought and sold:
a)
Money market
b)
Bull market
c)
Bear market
d)
Capital Market
79.
A piece of a corporation:
a)
Share
b)
Slice
c)
Spot
d)
Spice
80.
This is when the stock market prices rise steadily over time:
a)
Bull market
b)
Bear market
c)
Financial system
d)
Investment Objective
81.
Investment practice of distributing investment among different financial assets:
a)
Invesment objective
b)
Diversification
c)
Stock Index
d)
Preferred stock
82.
The ability to use something as cash value:
a)
Spending
b)
Liquidity
c)
Solidarity
d)
Investability
83.
unchanging rate of interest
a)
Variable Interest Rate
b)
Savings
c)
Fixed interest rate
d)
Interest
84.
rate of interest which changes regularly
a)
Fixed Interest Rate
b)
Savings
c)
Interest
d)
Variable Interest Rate
85.
Which financial product may pay a dividend?
a)
Savings account
b)
Money market account
c)
certificate of deposit
d)
common stock
86.
Banks use savings account deposits to:
a)
Make their services and products attractive for new depositors
b)
Pay for employee special projects
c)
Give loans to consumers and businesses
d)
Improve the quality of life in low-income communities
87.
A ______ is money awarded to a person from the government or school to help pay for tuition.
a)
tuition
b)
grant
c)
scholarship
d)
work-study
88.
How can you avoid paying interest fees on your credit card?
a)
Only use it for groceries
b)
pay off the full balance, on time, each month
c)
you cannot avoid interest fees
d)
only use Discover
89.
Commodity
a)
Any item that is widely used and carries an inherent worth to most people and can easily be exchanged for goods and services.
b)
The exchange of goods and services without the use of money.
c)
Money that is not backed by anything other than trust. It is money because the government say's it is money.
d)
Money that represents a commodity in holding
90.
If unemployment is high, the Fed would likely
a)
Increase the supply of money in the economy
b)
Decrease the supply of the money in the economy
91.
If the United States is experiencing inflation, the Fed will likely
a)
Increase the supply of money in the economy
b)
Decrease the supply of money in the economy
92.
The tools and strategies used to stabilize the economy. (inflation vs. unemployment)
a)
Fiscal policy
b)
Monetary policy
c)
Tight Money
d)
Easy Money
93.
Money loses its value when it
a)
It becomes too plentiful
b)
becomes too portabale
c)
is divisible
d)
is durable
94.
The goal of monetary policy is to
a)
sell bonds
b)
increase inflation
c)
seek a stable economy
d)
prevent panics
95.
The three major functions of the Fed are to manage currency, conduct monetary policy and
a)
Supervise Banks
b)
Control the Stock Market
c)
Control Unemployment
d)
Issue Federal Reserve Notes
96.
If the reserve requirement is 8 percent, how much of a $100 deposit must be kept by a customer's bank and not loaned to other customers?
a)
$8.00
b)
$92.00
c)
$80.00
d)
$12.00
97.
Without money, people would be forced to ____?
a)
Trade
b)
Barter
c)
Exchange
d)
All the above
98.
Which of these is a function of the Federal Reserve?
a)
loaning money
b)
acting as the state government's fiscal agent
c)
supervising international banks
d)
setting reserve requirements
99.
How does the Federal reserve control the amount of money in circulation ?
a)
by threatening the banks
b)
by being faithful
c)
by requiring banks to hold a certain amount in the bank
d)
House of Representatives
100.
When the Federal Reserve sends investigators to Bank of America, which job function is it doing?
a)
Maintaining the value of the dollar
b)
Regulating banks to ensure the safety of deposits and banking system
c)
Managing the amount of money in the economy
d)
Creating monetary policy
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