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Economics and the Government

Total questions: 48

Worksheet time: 48mins

Name
Class
Date
1.
What is the term for the availability of an item?
a)
services
b)
supply
c)
demand
d)
stocks
2.
The early African kingdom of Ghana’s gold and salt trade would be an example of which type of economic practice?
a)
traditional
b)
command
c)
market
d)
mixed
3.
Which economic system experiences the least amount of government interference?
a)
traditional
b)
command
c)
market
d)
mixed
4.
The Country of North Korea has a dictator that makes all of the economic decisions. What type of economy is this?
a)
Traditional 
b)
Market 
c)
Command 
d)
Centrally Planned 
5.
If there are only 100 televisions on sale and 200 people want to buy TV's, that is a problem of ____. 
a)
desire
b)
demand
c)
supply
d)
scarcity
6.
What is the best measure of the economic well-being of a country?
a)
net worth
b)
GDP
c)
open market value of goods
d)
the daily stock market performance
7.
Land, labor, capital, and entrepreneurship
a)
Economy
b)
Infrastructure
c)
Factors of production
d)
Capital
8.

What is an opportunity cost?

a)

The value of goods and services that are made.

b)

The value of a decision when something is given up.

c)

The value of what is given up when a decision is made.

d)

The value of prices and services that used by consumers.

9.

Why is it important to think a lot before making a choice?

a)

Because choices never have costs.

b)

Because choices take a lot of time.

c)

Because choices always have costs

d)

Because choices work are important

10.
In this type of economy, the people decide the supply, demand, and price.  
a)
Market 
b)
Traditional
c)
Command 
d)
Mixed
11.

All of the following are features of the Free Enterprise System EXCEPT

a)

Economic Freedom

b)

Government controls prices

c)

Voluntary Exchange

d)

Private Property

12.

An economy is-

a)

the way goods and services are produced and consumed.

b)

a governing body that creates laws.

c)

the similar characteristics of a location.

d)

an absolute location.

13.

Tangible products that are produced and sold to consumers are called-

a)

Markets

b)

Goods

c)

Services

d)

Labor

14.

Intangible actions that are conveniently provided to consumers are called-

a)

Goods

b)

Cars

c)

Services

d)

Vegetables

15.

The business cycle directly measures which economic goal?

a)

full employment

b)

growth

c)

price stability

16.

Which option presents the business cycle in the correct order

a)

trough, contraction, peak, recovery

b)

trough, expansion, peak, contraction

c)

peak, expansion, trough, recovery

d)

peak, contraction, recovery, trough

17.

Check all that apply.

Which of the following goal(s) are strong at the peak?

a)

equity

b)

full employment

c)

growth

d)

price stability

18.

If a news headline says, "Finally!!! 2 straight months of increased jobs."

Where on the business cycle is the current economy?

a)

Peak

b)

Contraction/Recession

c)

Trough

d)

Expansion/Growth/Recovery

19.

If a news headline says, "3 months of consecutive job losses is impacting consumer confidence."

Where on the business cycle is the current economy?

a)

Peak

b)

Contraction/Recession

c)

Trough

d)

Expansion/Growth/Recovery

20.

An economy is officially considered to be in recession after two consecutive (continuous) quarters of falling GDP.

a)

True

b)

False

21.

Which of the following are objectives of budget?

a)

Reallocation of resources

b)

Redistribution of income

c)

Economic stability

d)

All of these

22.
Sally owns a gas station.  What type of tax will she have to pay on the land that the gas station is on? 
a)
Property Tax
b)
Payroll Tax
c)
Income Tax
d)
Sales tax
23.
Jose Altuve for the Houston Astros makes $625,000 every year.  He has to pay taxes on the money his annual earnings. Which type of tax is that?
a)
Property Tax
b)
Income Tax
c)
Payroll tax
d)
Sales tax
24.
Frank's parents own their house. Which type of tax will Frank's parents pay annually?
a)
Property Tax
b)
Payroll Tax
c)
Income Tax
d)
Sales tax
25.

A tax in which the tax rate remains the same regardless of the amount on which the tax is imposed.

(a)  

26.

What tax is the main source of revenue for most local governments?

a)

Sales Tax

b)

property tax

c)

FICA tax

d)

Income Tax

27.

A regressive tax is based on what assumption

a)

The actual tax rate remains unchanged

b)

Tax fluctuates

c)

the actual tax rate decreases as the taxable amount increases.

d)

None of the above answers.

28.
The period between the peak and the trough is the _____; the period between the trough and the peak is the _____.
a)
recession; expansion
b)
expansion; recession
c)
peak; trough
d)
trough; peak
29.
Inflation is defined as an increase in:
a)
real wages of workers.
b)
real GDP.
c)
the average price level.
d)
all consumer products.
30.
Who is in charge of fiscal policy?
a)
Government
b)
Federal Reserve
31.
Which of the following are responsible for making fiscal policy decision? 
a)
The President and Congress
b)
The Federal Reserve System
c)
The National Council of Economic Advisors
d)
The commerce Department
32.
The federal government's overall approach to spending and taxes is called
a)
Physical Policy
b)
Fiscal Policy
c)
Money
d)
Monetary Policy
33.
An example of expansionary fiscal policy would be
a)
cutting taxes.
b)
cutting government spending.
c)
cutting production of consumer goods.
d)
cutting prices of consumer goods.
34.
Which of the following is not a tool of fiscal policy?
a)
Taxing
b)
Spending
c)
Interest Rates
d)
All of these options are tools of fiscal policy.
35.
The Federal government is concerned that economic growth is too high, that it is unsustainable, and that inflation is resulting. Which of the following fiscal policies  might be enacted to reduce inflation?
a)
Increasing taxation
b)
Open market sales
c)
decreasing taxation
d)
Increasing government spending
36.
"The Fed" refers to the....
a)
Federal Bureau of Investigation
b)
Federal Government
c)
Federal Reserve System
d)
Federal Income Tax
37.
The central bank in the USA that regulates the monetary system
a)
The FED
b)
FDIC
c)
The IRS
d)
Social Security
38.
There are _______ Regional Federal Reserve Banks, and one Federal Reserve Board of Governors.
a)
50
b)
4
c)
12
d)
52
39.

what is the purpose of Monetary Policy?

a)

contribute to economic growth and stability

b)

keep rich people from getting too rich

c)

Functions like Fiscal Policy

d)

give Congress and the political parties more control of the economy

40.

The goals of monetary policy do NOT include the promotion of _____

a)

Moderate long-term interest rates

b)

Stable prices

c)

Maximum employment

d)

High government spending.

41.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.
42.
Which of the following would the FED us to increase the money supply?
a)
raise the discount rate
b)
raise the required reserves
c)
buy bonds/securities
d)
print more money
43.

In economics a decision is free if:

a)

There is no money involved.

b)

There are no products involved.

c)

There is no exchange with another person.

d)

A decision is never free. There is usually an alternative which results in an opportunity cost. Not free.

44.

Tom was shopping for a car. He has looked at a Ford, Honda, Toyota, and Dodge. After a lot of debate, he narrowed it down to either the Ford or the Honda. He selected the Ford, because he liked the interior a little better. What was his opportunity cost?

a)

Ford

b)

Honda

c)

Toyota

d)

Dodge

45.

Limited Resources + Unlimited Wants =

a)

Scarcity

b)

Productivity

c)

Opportunity Cost

d)

Efficiency

46.

Football fans and sport commentators frequently argue over the strategies professional football teams use in drafting players. Some teams are looking for a player for a specific position, and when their turn comes, they draft the best available player at that position. Other teams simply draft the best player available regardless of position. These teams argue that by selecting the best possible player regardless of position, they can trade the player they draft now for a better player than they could draft for the desired position later.


What is the MOST scarce resource that professional teams have in the drafting process?

a)

draft positions

b)

the trades

c)

the best players

d)

money

47.
Local stores sell a particular pair of sneakers for $80. A picture of a basketball star Lebron James wearing these sneakers appears in all the local Ohio newspapers. The next day, sales for sneakers start to rise.
What is likely to happen to the price of the sneakers over the next several weeks?
a)
People will refuse to buy these sneakers.
b)
The price for the sneakers will not change.
c)
The price will fall as people learn Lebron James wears them.
d)
The price of the sneakers will rise as more people want similar sneakers.
48.
A new video game has just been released before the winter holiday season, when may families buy gifts. This is a video game that many children want. Many parents buy this video game system for their children. The price throughout December is $249.

What is most likely to happen to the price for this video game in January, when the most popular gift buying season is over?
a)
The price will go up for the new year then fall.
b)
Sellers will lower their prices when the demand for the video game slows.  
c)
The price for the video game will remain at $249.
d)
The price will rise since since the games manufacturer will refuse to produce anymore.

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