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WorksheetsGovernment Final Exam Study Guide
Total questions: 37
Worksheet time: 19mins
Name
Class
Date
1.
What does it mean when the Fed “tightens the money supply”?
a)
refuse to lend money to anyone.
b)
place their money in tightly locked vaults.
c)
refuse loans to anyone but the government.
d)
place more of their money in reserve and have less in circulation
2.
What is a budget deficit?
a)
A deficit occurs when the federal government's spending exceeds its revenues
b)
A deficit occurs when the federal government's spending is lower than its revenues
c)
A deficit occurs when the federal government's spending equals its revenues
3.
Using the chart, what is true about the revenues in the decade of the 1950’s?
a)
Between 1950-1960 the government had overall a deficit budget.
b)
Between 1950-1960 the government had overall a surplus budget.
c)
Between 1950-1960 the government had overall a balanced budget.
d)
Between 1950-1960 the government had formed a balanced budget and has lived off of a deficit ever since.
4.
What is the federal government’s largest source of income?
a)
payroll tax
b)
excise taxes
c)
corporate profits tax
d)
individual income tax
5.
What is a proportional tax?
a)
A tax that takes the same percentage of income from all income groups.
b)
A tax that takes a larger percentage of income from low-income groups than from high-incom groups.
c)
A tax that takes a larger percentage of income from high-income groups than from low-income groups.
d)
A tax that government imposes on income businesses and individuals within their jurisdiction generate.
6.
Your school has announced a vacation. You finally get a chance to go for the holidays for the next month. But suddenly you came to know that training is scheduled for your favorite sports which you do not want to miss. So, if you go on vacation, then your opportunity cost will be what?
a)
Training for your sport.
b)
Going on vacation.
c)
Staying at school.
d)
Not going to training or vacation.
7.
Will demand increase, decrease, or stay the same if there is a decrease in the price of a product?
a)
decrease
b)
increase
c)
remain the same
8.
What kind of economy is organized by a centralized government that owns most, if not all, businesses and where government officials direct all the factors of production?
a)
traditional economy
b)
market economy
c)
command economy
d)
mixed economy
9.
What is a price ceiling?
a)
The highest point at which goods and services can be sold.
b)
The lowest point at which goods and services can be sold.
c)
The point at which the price at which supply and demand are at equilibrium.
d)
The highest price that anyone has ever paid for a product.
10.
The circular flow model is an exchange between what two entities?
a)
business and households
b)
households and consumers
c)
producers and households
d)
businesses and producers
11.
Define Gross Domestic Product (GDP).
a)
The market value of goods and services produced by labor and property supplied by U.S. residents, regardless of where they are located.
b)
The monetary value of final goods and services that are produced in a country and sold to the final user in a period of time (i.e. a year or a quarter)
c)
the total income received by all sectors of an economy within a state
d)
The total amount of money earned by a nation's people and businesses
12.
Black coffee, airline tickets, and soft drinks are examples of products with what kind of demand?
a)
Elastic
b)
Inelastic
13.
In economic theory, ____________________ occurs when all companies sell identical products, market share does not influence price, companies are able to enter or exit without barriers, buyers have perfect or full information, and companies cannot determine prices.
a)
perfect competition
b)
imperfect competition
c)
competition
d)
balanced competition
14.
Energy companies are allowed to hold a monopoly.
a)
True
b)
False
15.
Define structural unemployment
a)
Unemployment caused by temporary transitions in workers’ lives, such as when a worker moves to a new city and has to find a new job.
b)
Unemployment caused by declining demand: when there is not enough demand in an economy for goods and services, businesses cannot offer jobs.
c)
A form of involuntary unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers
d)
Unemployment caused by different industries or parts of the labor market being available during different seasons.
16.
This economy may be based on custom and tradition, with economic decisions based on customs or beliefs of the community, family, clan, or tribe.
a)
market economy
b)
command economy
c)
traditional economy
d)
mixed economy
17.
In recent years, companies from industrialized nations have been building production facilities in Latin American nations. This economic change is mostly due to the region’s
a)
supply of inexpensive labor
b)
communist governments
c)
capital resources
d)
favorable climate
18.
Maria wants to invest $2,000 of her savings. Which investment poses the least risk for her?
a)
mutual funds from a broker
b)
preferred stock
c)
corporate bonds
d)
certificates of deposit at a bank
19.
An individual with a business degree working as a cashier as his main source of income is considered to be
a)
unemployed
b)
underemployed
c)
overemployed
d)
suitably employed
20.
A monthly budget can help you achieve financial security by
a)
expanding the borrowing limits on your existing credit cards and increasing the number of credit cards you hold.
b)
reducing the likelihood that you will face unexpected expenditures for maintenance and repairs.
c)
increasing your financial awareness and helping you distribute your funds more effectively.
d)
helping you choose stocks that are most likely to increase in price.
21.
This is a set of U.S. regulations that protect consumers from hazards in the products they purchase and from misleading information about products. These regulations also provide support for consumers in instances when a product fails, breaks, or is faulty.
a)
Consumer Bill of Rights
b)
Producer Bill of Rights
c)
Customer Bill of Rights
d)
Manufacturer Bill of Rights
22.
This is an economic system in which the decisions regarding investment, production and distribution to the consumers are guided by the price signals created by the forces of supply and demand.
a)
market economy
b)
command economy
c)
traditional economy
d)
mixed economy
23.
What will most likely happen to the standard of living if GDP increases in a country?
a)
The standard of living will remain the same.
b)
The standard of living will decrease.
c)
The standard of living will increase.
d)
There is no relationship between GDP and the standard of living.
24.
Malcolm decides to leave his office job as a sourcing associate to work in a steel manufacturing facility. His wages will likely increase because
a)
the demand for worker in steel manufacturing is about the same
b)
the supply of workers in steel manufacturing is high.
c)
it is more dangerous to work in a steel factory than in an office.
d)
The demand for sourcing associates is low.
25.
Bill is deciding between a job with Company X that pays $600 a week with benefits and a job with Company Y that pays $650 a week with no benefits. He decides to take the job with Company X, whose lower compensation is offset by what?
a)
large number of information management jobs.
b)
higher earnings.
c)
contributions to Social Security.
d)
benefits such as health insurance and stock options.
26.
What is a mortgage?
a)
Rent paid to a landlord.
b)
Car payments.
c)
Loan for real estate.
d)
Loan for college.
27.
In banking, the practice of retaining only a portion of deposits on hand is called
a)
the gold standard.
b)
fractional reserve banking.
c)
the Federal Reserve system.
d)
representative money.
28.
What is the main advantage of diversification as an investment strategy?
a)
reduces risk to investors.
b)
increases investors' access to their money.
c)
offsets the effects of inflation on investment.
d)
guarantees a ficed reate of return on an investment.
29.
You realize that many students who come to early morning football practice do not get up early enough to eat breakfast. You borrow $600 from your parents to start a bagel delivery service to the field in the early mornings. You are acting as
a)
a supplier in the capital market.
b)
an entrepreneur.
c)
a financial capital investor.
d)
an intermediary.
30.
How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
a)
by allowing rebates to some preferred customers who buy a lot of goods.
b)
by charging each customer the maximum amount they are willing to pay.
c)
by charging different prices according to the group to which the buyer belongs.
d)
by changing the product and selling a lesser one to people who are willing to pay for the top product.
31.
This is a marketing strategy that relies on product differentiation and sustainable competitive advantages instead of lower prices.
a)
price competition
b)
non-price competition
c)
price war
d)
product defamation
32.
What might consumers do if a monopolistically competitive business begins charging excessive prices for its product?
a)
The firm will go out of business.
b)
Consumers will substitute a rival's product.
c)
Consumers will boycott the product.
d)
The government will regulate the price.
33.
This is a state of limited competition, in which a market is shared by a small number of producers or sellers.
a)
monopoly
b)
perfect competition
c)
oligopoly
d)
monopolistic competition
34.
Which of the following is NOT an example of barriers to entry?
a)
Cable companies must lay miles of underground cable before they can serve a single customer in a new market.
b)
In some counties, laws require retail stores to be closed on Sundays.
c)
An entrepreneur wishing to own a clothing store must rent a building, hire workers, and buy clothing for sale.
d)
A person who wishes to practice medicine is required to attend medical school, complete an internship, and pass a state exam.
35.
The point where the supply curve meets the demand curve is known as what?
a)
input price
b)
utility price
c)
marginal price
d)
equilibrium price
36.
This is an economy in which production, investment, prices, and incomes are determined centrally by a government.
a)
market economy
b)
command economy
c)
traditional economy
d)
mixed economy
37.
This is the state of the demand for a good or service is greater than the availability of the good or service.
a)
scarcity
b)
plenty
c)
abundance
d)
bountiful
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