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Economics Final Exam Review

Total questions: 235

Worksheet time: 3hrs 32mins

Name
Class
Date
1.

The value that a person or business misses out on when choosing one alternative over another is known as

a)

Opportunity cost

b)

Choice

c)

Trade-offs

d)

Price

2.

Which of the following best describes scarcity?

a)

An abundant supply of something

b)

A decrease in value

c)

The physical space for producing goods

d)

A low supply of something that is in demand

3.

Money and equipment are examples of which factor of production?

a)

Capital

b)

Land

c)

Labor

d)

Entrepreneurship

4.

A philosophy that calls for very little or no government involvement in the economy.

a)

Industrial Capitalist

b)

Economics

c)

Supply and Demand

d)

Laissez-Faire

5.

Labor refers to...

a)

people with all their efforts and abilities

b)

individuals who start a new business or bring a product to market.

c)

the tools, equipment, and factories used in production of goods and services.

d)

The "gifts of nature" or natural resources not created by human effort.

6.

Entrepreneurs are...

a)

people with all their efforts and abilities

b)

individuals who start a new business or bring a product to market.

c)

The "gifts of nature" or natural resources not created by human effort.

d)

the tools, equipment, and factories used in production of goods and services

7.

A herd of cattle is an example of ...

a)

Land

b)

Labor

c)

Entrepreneur

d)

Capital

8.

A bulldozer is an example of...

a)

Labor

b)

Land

c)

Entrepreneur

d)

Capital

9.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
Scarcity
b)
2 boats
c)
2 trucks
d)
3 boats
10.
What is the production possibilities curve?
a)
a graph that shows how much an economy can produce between 2 goods
b)
how much money something is
c)
the opportunity one has to give up in order to gain something else
d)
land, labor, capital, entrepreneurs
11.
Land, Labor, Capital, and Entrepreneurship 
a)
Diversification
b)
Deductions
c)
Portfolio
d)
Factors of Production 
12.

Which economic system does the government make all economic decisions and owns most of the property - it is sometimes called communism?

a)

Traditional

b)

Command

c)

Market

d)

Mixed

13.

Which economic system are all resources privately owned and the buyers and sellers answer the three economic questions?

a)

Traditional

b)

Command

c)

Market

d)

Mixed

14.

The circular flow model shows

a)

how profits are made

b)

how many firms can support the needs of how many households

c)

the interactions between households and businesses

d)

what inputs are required for what outputs

15.

Any point on the production possibilities curve is:

a)

just there

b)

not efficient

c)

not possible

d)

efficient

16.

Any human made resource that is used to create more goods and services

a)

capital

b)

entrepreneurship

c)

cost

d)

labor

17.

The economics studied that focuses on a global scale

a)

macroeconomics

b)

microeconomics

c)

mixed economy

d)

command economy

18.

What are wants?

a)
An item we desire but is not essential for survival like a new car or a relaxing vacation.
b)
An item that is essential for survival like air, food or shelter.
c)
The act of picking of deciding between two or more possibilities.
d)
The basic economic problem that happens because people have unlimited wants but resources are limited.
19.

What are needs?

a)
An item that is essential for survival like air, food or shelter.
b)
An item we desire but is not essential for survival like a new car or a relaxing vacation.
c)
The most desirable benefit, profit, or value of something that must be given up to get something else.
d)
Assets that are used to produce human needs and wants.
20.

What is the Law of Increasing Opportunity Costs?

a)
The principle that costs of production will increase by the inefficient reallocation of resources for the production of additional goods for which the resources are not well suited.
b)

When the ultimate decision is grounded in facts but based on what the decision maker values.

c)
An increase in resources or technology that shifts the PPC curve outward from the origin.
d)
A point somewhere outside the PPC that cannot be attained as the nation/business does not have the available resources to produce at that level.
21.

Most countries today are ______ economies.

a)

Capitalist

b)

Communist

c)

Socialist

d)

Mixed

22.

In this economy, goods and services are traded without exchanging money.

a)

economic system

b)

traditional economy

c)

mixed economy

23.

According to basic economic reasoning nothing is free.

a)

True

b)

False

24.

When exchange is voluntary…

a)

the costs of the traded items are equal

b)

one trader wins and one loses.

c)

both traders anticipate that their gains will outweigh their costs.

d)

both traders think the other party is

         getting a bad deal.

25.

Which of the following is true?

a)

Point F is impossible to attain and point A is most desirable.

b)

Point F is an inefficient use of recourses.

c)

Points A and E are most desirable

d)

Resource charts

e)

None of the these answers is true.

26.

The options given in an economic decisions is known as

a)

Opportunity cost

b)

Choice

c)

Trade-offs

d)

Price

27.

The economics studied that focuses on the choices of individuals

a)

macroeconomics

b)

microeconomics

c)

mixed economy

d)

command economy

28.

What is a consumer?

a)

Someone who comes up with an idea

b)

Someone who buys a good or service

c)

Someone who makes a product

d)

Someone who cannot afford a product

29.

What is a producer?

a)

Someone who comes up with an idea

b)

Someone who buys a good or service

c)

Someone who makes a product

d)

Someone who cannot afford a product

30.

What does an incentive do?

a)

Encourage a behavior

b)

Prevent a behavior

31.

What is utility?

a)

How much something costs

b)

How something is made

c)

How useful something is

d)

How wasteful something is

32.

How do you economize?

a)

Use all of your resources at once

b)

Try to gain as much money as possible

c)

Use more resources than your competitor

d)

Try to make the most of your scarce resources

33.

What is marginal cost?

a)

The cost of one additional unit of product

b)

The space between two prices

c)

The edges of a cost analysis

d)

The benefit of one additional unit of a product

34.

What is marginal benefit?

a)

The cost of one additional unit of product

b)

The space between two prices

c)

The edges of a cost analysis

d)

The benefit of one additional unit of a product

35.

Which of the following is NOT one of the three economic questions?

a)

What will be produced?

b)

What utility is being produced?

c)

How will it be produced?

d)

For whom will it be produced?

36.

Nike sneakers can be found in the _ of the circular flow model

a)

Product market

b)

Factor market

c)

Household

d)

Business

37.

Trees can be found in the _ of the circular flow model

a)

Product market

b)

Factor market

c)

Household

d)

Business

38.

A market failure is when a economic transaction impacts only the people invovled

a)

True

b)

False

39.

An externality is a consequence of an economic transaction that impacts someone other than the buyer and seller

a)

True

b)

False

40.

Which of the following is NOT an example of a public good?

a)

Public education

b)

Roads

c)

National defense

d)

Wifi

41.

Which of the following is NOT an example of a safety net?

a)

Social security

b)

Food stamps

c)

Income

d)

Stipends

42.

What is economics?

4 lines
43.

What does the law of demand state?

a)

Everyone has limited income and they will spend it all

b)

The lower the price, the more people want the good or service

c)

Services are bought and sold just like goods

d)

The higher the price, the more people want the good or service

44.

If suppliers expect prices to rise next year for their product, you would expect

a)

The demand curve will shift to the left this year

b)

The quantity demanded will decrease this year

c)

The supply curve will shift to the left this year

d)

The supply curve will shift to the right this year

45.

Which of the following is NOT a determinant of demand?

a)

The price of related goods

b)

Changes in income

c)

Consumer expectations

d)

All are determinants of demand

e)

None are determinants of demand

46.

Which of the following best defines market equilibrium?

a)

The point at which supply exceeds demand and prices are stable

b)

The point at which supply and demand equal each other and prices are stable

c)

The point at which demand exceeds supply and prices are changing regularly

d)

The point at which supply and demand equal each other and prices are changing regularly

47.

Differentiate a change in quantity demanded from a change in demand.

a)

A change in quantity demanded creates a new demand curve, while a change in demand is movement along the existing demand curve

b)

A change in quantity demanded is never driven by price, while a change in demand is always driven by price

c)

A change in quantity demanded is when consumer expectations delay a purchase, while a change in demand is a change in demographics

d)

A change in quantity demanded is movement along the existing demand curve, while a change in demand creates a new demand curve

48.

Which of the following describes the relative elasticity in demand for toothpaste?

a)

Demand is inelastic because it is a luxury item

b)

Demand is elastic because there are no substitutes

c)

Demand is inelastic because it makes up a large share of most people’s budget

d)

Demand is inelastic because it is a low-cost necessity

49.

When the quantity demanded for a product is less than the quantity supplied, the market

a)

has prices that are too low

b)

is in equilibrium

c)

has a surplus

d)

is controlled by a monopoly

50.

Supply depends on the willingness and ability of…

a)

Donors to contribute

b)

Consumers to purchase

c)

Advertisers to promote

d)

Producers to produce

51.

What can cause a change in supply?

a)

Changes in technology

b)

Changes in the number of producers

c)

Changes in government policy

d)

All of the above

52.

Why is a demand curve downward sloping?

a)

Because quantity demanded increases as price decreases

b)

Because of the natural elasticity of the market

c)

Because it shows how increasing incentives changes demand

d)

Because it reflects the desire, ability, and willingness of consumers

53.

The Law of Demand states that as price decreases…

a)

Demand increases

b)

Production increases

c)

Quality increases

d)

Wages decrease

54.

What is the income effect?

a)

A change in quantity demanded caused by a change in consumer income

b)

A change in demand caused by substitution

c)

A proportional change in quantity demanded based on income

d)

An increase in purchase of complements based on an increase in income

55.

The Law of Demand states that the quantity demanded of a product varies _______________ with its price.

a)

Inversely

b)

in a positive correlation

56.

Which of these is the best example of diminishing marginal utility?

a)

Bicycles become less useful as they get old and start to rust

b)

A shortage of bike paths make bicycles less useful

c)

People with cards have less use for bicycles than people without cars have

d)

Someone who has one bicycle will have less use for another

57.

Which of these situations best illustrates market equilibrium?

a)

The amount of soap made matches the amount of soap that people want to buy

b)

The price of soap does not vary much from week to week.

c)

Everyone who wants or needs soap can easily afford to buy it.

d)

Soap production ensures a good profit for the manufacturer.

58.

What is the usual result of setting a price ceiling on rents?

a)

Construction jobs increase with the building of new apartment buildings

b)

More people want to rent apartments than are available to rent

c)

People can find apartments but cannot afford them

d)

Houses are broken up into apartments to meet the demand.

59.

Rent control, or the government controlling  prices of rental properties is a type of …

a)

Surplus

b)

Price floor

c)

Rationing

d)

Price ceiling

60.
Supply has a ________________ relationship between price and quantity supplied
a)
direct
b)
left
c)
right
d)
supply
61.
Which two of the following goods are SUBSTITUTES?
a)
Coke & Pepsi
b)
Tacos & babies
c)
supply & demand
d)
None of em!
62.
What does this curve represent?
a)
demand
b)
supply
c)
equilibrium
d)
shortage
63.
What does this curve represent?
a)
supply
b)
equilibrium
c)
demand
d)
surplus
64.

This graph represents...?

a)

Changes in quantity demanded

b)

Changes in quantity supplied

c)

Changes in demand

d)

Changes in supply

65.

This graph represents...?

a)

Changes in quantity demanded

b)

Changes in quantity supplied

c)

Changes in demand

d)

Changes in supply

66.
Cold weather in Florida has damaged this year’s orange crop. Farmers have only half of the usual amount of oranges to sell. What will happen to the price of oranges?
a)
The price will go up.
b)
The price will go down.
67.
Farmers in California have had wonderful weather. They have produced the largest crop of watermelons in years. What will happen to the price of watermelons?
a)
The price will go up.
b)
The price will go down.
68.

New technology advances the rate at which furniture can be assembled. Why does this change the supply?

a)

There is a change in cost of production.

b)

The number of producers changes.

c)

The expectations of consumers changes.

d)

The output rate declines.

69.

Which of the following is the equilibrium price and quantity in Graph 1?

a)

$2.00, 2,500

b)

$2.00, 1,500

c)

$3.00, 2,000

d)

$3.00, 3,000

70.

Which of the following graphs shows the demand and supply curves for Table 3?

a)
b)
71.

The want or willingness a consumer has to purchase a good or a service is called?

a)
shortage
b)
supply
c)
price
d)
demand
72.

French fries and ketchup

a)

Substitutes

b)

Compliments

c)

A normal and an inferior good

d)

Neither Normal nor inferior

73.

What happens to the demand curve for computers when the price increases from $500 to $700?

a)
b)
c)
d)
74.
If the demand for used cars decreases after the price of a new car falls, used cars and new cars are
a)
inferior goods
b)
substitute goods
c)
complementary goods
d)
normal goods
75.

A mother who buys her son two sets of school uniforms every year regardless of changes in their prices has a perfectly inelastic demand for school uniforms

a)

TRUE

b)

FALSE

76.

The definition of the law of diminishing marginal utility

a)

As more units are consumed the marginal utility falls.

b)

As more units are consumed the marginal utility increases.

c)

As price decreases quantity demanded increases.

d)

As price increases consumers are willing to pay more.

77.

The best definition for fixed costs is

a)

Costs that do not depend on the level of production

b)

Costs that do not change

c)

Costs that increase when you produce more

78.

The marginal production from 3 to 4 labors is _________.

a)

2

b)

7

c)

4

d)

8

79.

Fixed Cost + Variable Cost =

a)

Breakeven point

b)

Total costs

c)

Fixed costs

d)

Variable costs

80.

The increase in output that arises from an additional unit of input

a)

Marginal product

b)

Production function

c)

Diminishing marginal product

d)

The cost of production

81.

If the price goes up for a product, consumers buy less of that product and more of another substitute.

a)

The income effect

b)

The substitute effect

c)

Law of diminishing marginal utility

d)

Law of demand

82.

If the price goes down for a product, the purchasing power increases for consumers, allowing them to purchase more.

a)

The income effect

b)

The substitute effect

c)

Law of diminishing marginal utility

d)

Law of demand

83.

The condition in which the quantity supplied of a good is greater than the quantity demanded.

a)

Surplus

b)

Shortage

c)

Equilibrium

d)

Disequilibrium

84.

The condition in which the quantity demanded of a good is greater than the quantity supplied.

a)

Surplus

b)

Shortage

c)

Equilibrium

d)

Disequilibrium

85.

Which of the following two goods is more likely to be inelastically demanded?

a)

Demand for insulin

b)

Demand for vitamins

86.
 Total Revenue - Total Cost = _____
a)
Profit
b)
Revenue
c)
Marginal Revenue
d)
Variable Revenue
87.
Revenue generated by producing one additional unit of product.
a)
Marginal Revenue
b)
Marginal Profit
c)
Total Revenue
d)
Average Revenue
88.
What is the Equilibrium Price?
a)
1
b)
2
c)
3
d)
4
89.
What is the Equilibrium Quantity?
a)
50
b)
60
c)
70
d)
80
90.

Which of these would most likely increase the supply of soccer balls?

a)

a government tax on sporting goods

b)

a decrease in the price of raw materials

c)

an increase in the supply of tennis balls

d)

a transportation strike (truckers on strike)

91.

Which letter shows the area of a shortage?

a)

A

b)

B

c)

C

92.

Which letter shows the equilibrium?

a)

A

b)

B

c)

C

93.

Which letter shows the area of surplus?

a)

A

b)

B

c)

C

94.

A price ceiling...

a)

would be below the equilibrium

b)

would be at the equilibrium

c)

would be above the equilibrium

95.

A price floor...

a)

would be below the equilibrium

b)

would be at the equilibrium

c)

would be above the equilibrium

96.
If the government set the price at $700, would that be a price ceiling or floor?
a)
Price Ceiling
b)
Price Floor 
c)
Neither
97.
If the government set the price at $300, what would be the result?
a)
Surplus of 4,000
b)
Surplus of 2,000
c)
Shortage of 4,000
d)
Shortage of 2,000
98.

What is the goal of a firm?

a)

to make profits

b)

to maximize profits

c)

to maximize revenue

d)

none of the above

99.

Which of the following is an example of a perfectly competitive firm?

a)

Farmer's market stand

b)

Fast food restaurant

c)

Cell phone service provider

d)

Local internet service provider

100.

Which of the following is NOT a characteristic of perfectly competitive markets?

a)

Many buyers and sellers

b)

Homogeneous goods

c)

Free entry and exit

d)

Firms set their own prices

101.
Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? 
a)
In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. 
b)
In perfect competition there are many firms, but in monopolistic competition there are only a few firms. 
c)
In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. 
d)
In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 
102.

In monopolistic competition producers....

a)

have a full ability to set prices

b)

have some ability to set prices

c)

have no ability to set prices

103.

Which one of the following statements is not a characteristic of monopolistic competition?

a)

Ease of entry into the industry

b)

Product differentiation

c)

A relatively large number of sellers

d)

A homogenous product

104.

What type of products will firms produce in monopolistic competition?

a)

Firms produce significantly differentiated products

b)

Firms produce slightly differentiated products

c)

Firms produce homogenous products with one modification

d)

Firms produce a variety of different products

105.

Which of the following best describes an oligopoly?

a)

many monopolistically competitive firms

b)

a few firms sharing monopoly power

c)

a former monopoly that has been broken up by the government

d)

a government-granted franchise or monopoly

106.

One of the requirements for a monopoly is that

a)

products are high priced

b)

there are several close substitutes for the product

c)

there is a unique product with no close substitutes

d)

the product cannot be produced by small firms

107.

A monopoly is a market with

a)

many suppliers

b)

no barriers to entry

c)

many substitutes

d)

one supplier

108.

A barrier to entry is

a)

an economic term for economies of scale

b)

illegal in most markets

c)

anything that prevents new firms from entering the market

d)

a factor that increases competition

109.

Mr. Simpson is liable for all the debts of his company.  He has which type of business organization?

a)

Monopoly

b)

Sole Proprietor

c)

Partnership

d)

Corporation

110.

The fact that an owner is responsible for all losses and debts occurred by a business is known as:

a)

Limited Liability

b)

Limited Debt

c)

Unlimited Liability

d)

Unlimited Debt

111.

Jorge and Fred have a product they would like to sell. They decide to share the risks and profits by forming an unincorporated business. The business organization Jorge and Fred have MOST LIKELY formed is a(n)

a)

Entreprenuership

b)

Sole Proprietor

c)

Partnership

d)

Corporation

112.

A business recognized by law as a separate legal entity having all the rights of an individual.

a)

Sole Proprietor

b)

Partnership

c)

Corporation

d)

Entreprenuership

113.

Business will end when owner dies, quits, or sells the company.

a)

Sole Proprietor

b)

Partnership

c)

Corporation

d)

Enterprenuer

114.

The partnership and all partners are liable when any partner commits a tort while acting within the scope of the firm's business.

a)

true

b)

false

115.
What is a business owned by stockholders/investors but operated by others?
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
116.
Dan has $5,000. He wants to invest his money in the type of business that has the least amount of liability. In which type of business should he invest?
a)
corporation
b)
partnership
c)
proprietorship
117.
What is a company called that sells stock to raise money?
a)
Partnership
b)
Corporation
c)
Sole Proprietorship
d)
Limited Partnership
118.

What is the name of a person who owns part of a corporation?

a)

Stakeholder

b)

Shareholder

c)

Trust Agent

d)

Chairman

119.

What are the four major considerations when choosing a legal structure for your business?

a)

Market, Control, Ownership, Size

b)

Taxation, Liability, Cost, Control

c)

Size, Cost, Ownership, Distribution

d)

None of the Above

120.

What is a co-op?

a)

a company branded off of a franchise

b)

a legal business structure that is owned and governed by and functions for, the benefit who use its services

c)

a franchise

d)

a partnership

121.

Limited Liability means

a)

the corporation pays its own taxes

b)

the company can be sued but the owners only

c)

the company can be sued but the owners only can be sued personally if they act illegally

d)

The shareholders are the only liable party

122.

A business that uses the name, logo and trading systems of an existing successful business.

a)

Franchise

b)

Cooperatives

123.

A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights.

a)

Share

b)

Shareholder

124.

This type of business is created to provide a service, not to make a profit.

a)

non-Profit

b)

Partnership

c)

Corporation

d)

Sole Proprietorship

125.
What is the main reason people start businesses?
a)
Out of boredom
b)
To pay taxes
c)
Earn a profit
d)
To hire friends
126.

How does the government break up and prevent monopolies?

a)

Increased Taxes

b)

Antitrust legislation and regulation

c)

Deregulation

d)

Laissez-faire

127.

Under pure competition, products are

a)

always cheap

b)

differentiated

c)

accurately priced

d)

identical

128.

An organization of workers dedicated to protecting members' interests and improving wages, hours and working conditions for all.

a)

Labor Union

b)

Workers Rights

c)

Worker Strikes

d)

Collective Bargaining

129.

What was the first nationwide industrial union?

a)

the Knights of Labor

b)

the AFL

c)

the Pinkertons

d)

the Anarchists

130.
What typically happened to individual employees who complained about working conditions?
a)
They were given a pay raise
b)
They were promoted
c)
They were fired
d)
They quit their jobs
131.

Training and experiences is considered

a)

physical capital

b)

human capital

c)

labor

d)

necessary to obtain an unskilled job

132.

What is the price for labor

a)

value

b)

labor productivity

c)

wages

d)

human capital

133.

Wages, just like the other factors of production are governed by

a)

government regulation

b)

supply and demand

c)

labor laws

d)

glass ceiling

134.

(Click all that apply)

The civilian labor force is made up of...

a)

Men and Women at least 16 years old.

b)

Working people

c)

People looking for a job

d)

Institutionalized people

135.

The wage at which the number of workers needed equals the number of workers available.

a)

minimum wage

b)

maximum wage

c)

Fair Standards Act

d)

equilibrium wage

136.

The demand for a product or resource based on its contribution to the final product.

a)

derived demand

b)

equilibrium demand

c)

excessive demand

d)

shortage of demand

137.

Which is not a Characteristic of Money?

a)

Durability

b)

Portability

c)

Divisibility

d)

Invincibility

138.

Which of these are functions of money?

a)

medium of exchange that allows the trade of goods and services

b)

holds value over time

c)

standard of value that allows comparison of the value of goods related to one another

d)

used as the only means of trade between nations

139.

You can easily carry money in a pocket or a purse. This reflects what characteristic of money?

a)

durability

b)

legal tender

c)

divisibility

d)

portability

140.

Which of these are functions of money?

a)

medium of exchange that allows the trade of goods and services

b)

holds value over time

c)

standard of value that allows comparison of the value of goods related to one another

d)

used as the only means of trade between nations

141.

A business or financial institution that stores and manages money for individuals and other businesses:

a)

ATM

b)

Bank

c)

Credit Union

d)

Check Cashing Center

142.

anything that is used to determine value during the exchange of goods and services

a)

medium of exchange

b)

commodity money

c)

fiat money

d)

unit of account

143.

the price paid for the use of borrowed money

a)

interest

b)

principal

c)

unit of account

d)

M2

144.

Why should you diversify your investments?

a)

Investing in a diversified portfolio guarantees that you won’t lose money with your investments

b)

Diversifying your portfolio helps reduce risk

c)

If you diversify your portfolio, you will definitely earn a high return

145.

How is a bond different from stock?

a)

A bond is a loan you give to a organization, while stock is partial ownership in a company.

b)

Bonds are best for earning high returns while stocks are best for providing a stable source of income

c)

Bonds are typically riskier than stocks.

146.

How can someone make money from investing in a stock?

a)

They receive dividends or sell the stock at a higher price than what they paid for it.

b)

They sell the stock for the same price they bought it for.

c)

The stock loses value but the overall market experiences a positive return

147.

How does investing in the stock market differ from putting money in a savings account at a bank?

a)

Investing is always a less risky option than saving

b)

Investing is best for short-term situations like emergency funds; saving is best for the long-term

c)

Investing typically earns between 1-2% while saving generally earns between 5-7%

d)

Investing allows you to accumulate wealth for retirement while saving is best forshort-term purchases or emergencies

148.

Which of the statements below BEST describes the relationship between risk and return when considering an investment?

a)

Investors expect to earn a lower return when they invest in a high risk asset

b)

Investors expect to earn a higher return when they invest in a low risk asset

c)

Investors expect to earn a higher return when they invest in a high risk asset

d)

Investors expect to earn zero return when investing in a low risk asset

149.

_____________ is money by government decree, has no alternative value

a)

Gold standard

b)

Specie

c)

Barter

d)

Fiat money

150.

Coins and paper that are used as money; 'legal tender'.

a)

Money

b)

Transfer Payments

c)

Currency

d)

Liquidity

151.

When you own part of a company, this means you own ________ of that company.

a)

a dividend

b)

a bond

c)

a stock

d)

the soul

152.
What is the stock market?
a)
A type of farmers market where people buy and sell food.
b)
A place where parts of businesses are bought and sold.
c)
A special type of grocery store that sells stocks.
d)
A type of bank that gives out loans to new businesses.
153.
The DOW Jones Industrial Average is an index of 30 American companies.  Why is the DOW Jones Industrial Average important?
a)
It tells Americans how much debt the country is in.
b)
It helps economists predict when a stock market crash will happen.
c)
It tells Americans how many jobs are out there.
d)
It provides a snapshot of how the stock market and the US economy is doing.
154.
The possibility of losing some or all of a particiular investment.
a)
risk
b)
index
c)
industry
d)
profit
155.

The use of assets to create income or profit

a)

investing

b)

trading

c)

saving

d)

loaning

156.

When stock prices in general steadily rise, this kind of market exists

a)

steady market

b)

bear market

c)

strong market

d)

bull market

157.

When stock prices steadily fall or stagnate for a period of time, it is called a

a)

weak market

b)

bear market

c)

flat market

d)

bull market

158.
Buying stocks is a sure way to make money.
a)
True
b)
False
159.
What is a dividend?
a)
Typically paid out each quarter, dividends are basically your share of the company’s profits
b)
A grandchild.
c)
A symbol that looks like a dot on either side of a dash.
d)
Something you use to hold books up on a shelf.
160.
What is a Company Symbol?
a)
A mascot to be recognized at a sport game
b)
A 2-4 letter code used to identify a company stock is random and 
c)
The musical instrument that creates a crash
d)
Someone wg=ho does their job really well and becomes the person everyone looks up to.
161.
A company owned by families or a small number of investors and do not issue stock to the public.
a)
public company
b)
industry
c)
private company
d)
portfolio
162.
Why does a company issue stock?
a)
to brag about their profits
b)
to attract money
c)
to gain publicity
d)
because it is required by law
163.

What is a savings certificate with a fixed maturity date and specified fixed interest rate?

a)

Credit

b)

Savings Tools

c)

Certificate of Deposit

d)

Money

164.

What is a non profit financial cooperative owned by its members that provides credit and other financial services?

a)

Schools

b)

Credit Unions

c)

Banks

d)

Insurance

165.

There are 4 common types of savings tools, ordered from lowest to highest by interest rates. A. checking accounts, savings accounts, money market deposit accounts, and certificates of deposit

a)

Checking,Savings,Money Market,CD

b)

Checking,Savings,CD,Money Market

c)

Savings,Checking,Money Market,CD

d)

Savings,Money Market,Checking,CD

166.

The inflation rate is

a)

the ability to buy goods or services

b)

measured in fixed dollars

c)

not an important measure to economists

d)

the percentage change in prices over time

167.

Inflation reduced people's purchasing power because

a)

the same amount of money buys ore goods and services

b)

the same amount of money buys fewer goods and services

c)

the market basket has to be changed every year

d)

there is not enough money in the economy

168.

Is this counted in the GDP of the US?

The federal government purchases a new submarine for the US Navy.

a)

Yes

b)

No

169.

In which part of the GDP calculation does this fit?

You spend $15 at AMC to see the latest Avengers movie.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

170.

In which part of the GDP calculation does this fit?

The US military spends $5 billion on five new helicopters.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

171.

In which part of the GDP calculation does this fit?

The local taxi service purchases new vehicles for the

company.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

172.

In which part of the GDP calculation does this fit?

Australia exported $6 billion worth of goods in 2018, but imported $10 billion in goods.

a)

Consumer spending

b)

Government spending

c)

Investment spending

d)

Net exports

173.

Which of the following would be included in the calculation of GDP?

a)

Final goods

b)

Intermediate goods

c)

Second hand goods

d)

Black market activity

174.

The _______ is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

a)

Consumer Price Index

b)

Aggregate supply

c)

Producer Price Index

d)

Aggregate demand

175.

According to the wage-price spiral, if a company gives a worker a raise in pay, what must they also do?

a)

Raise the price of their products

b)

go out of business

c)

lower the price of their products

d)

merge with a competitor

176.
What type of GDP is calculated with the current year's prices?
a)
Nominal GDP
b)
Real GDP
c)
GDP per capita
177.
GDP is calculated by
a)
adding up the cost of goods used in producing the item
b)
subtracting all costs from total revenue
c)
adding consumption + investment +government spending+ (exports sold - imports bought)
178.
What does Per Capita Mean?
a)
Per Household
b)
Per Object
c)
Per Worker
d)
Per Person
179.

The Business Cycle measures ___ over time.

a)

wealth

b)

inflation

c)

economic growth

180.

The business cycle rises above the trendline during-

a)

rescessions

b)

expansions

c)

troughs

181.

GDP declines during a(an)

a)

peak

b)

contraction

c)

expansion

182.

Economic recovery begins-

a)

above the trend line

b)

at the end of a recession (trough)

c)

at the "boom" period

183.

When GDP rises faster than the long-run trend then the economy is experiencing-

a)

a recession

b)

an expansion

c)

a recovery

184.

GDP will begin to decline at-

a)

the peak.

b)

the trough.

c)

the contractionary phase.

185.

Inflation measures...

a)

the value of all final goods and services produced

b)

an increase in the general price level

c)

the percentage of people looking for work that can't find it

d)

the economic freedom an economy offers

186.

Which of the following is a peak?

a)

A

b)

B

c)

C

d)

D

187.

Which of the following is a recession, or contraction?

a)

A

b)

B

c)

C

d)

D

188.

Which of the following is a trough?

a)

A

b)

B

c)

C

d)

D

189.

Which of the following is an expansion, or recovery?

a)

A

b)

B

c)

C

d)

D

190.

Nominal GDP - _____ = Real GDP

a)

Inflation

b)

Unemployment

c)

Imports

d)

Exports

191.

The Business Cycle charts...

a)

the ups and downs of an economy

b)

series of stages in the economy as it expands and contracts.

c)

the periodic growth and decline of a nation’s economy, measured mainly by its GDP (Gross Domestic Product).

d)

All of the above

192.

The rate of inflation is most commonly measured by use of

a)

a price deflator

b)

the GDP deflator

c)

the consumer price index

d)

all of the above

193.

What causes inflation?

a)

inflation occurs when there's an increase in production costs OR when demand for products and services increases faster than supply

b)

inflation occurs when there's an increase in production costs OR when demand for products and services increases slower than supply

c)

inflation occurs when there's a slower increase in production costs OR when demand for products and services increases faster than supply

194.

What are the three main causes of inflation?

(a)  

195.
When inflation is high the _______________of the dollar decreases
a)
cost value
b)
purchasing power
c)
importance
d)
validity
196.
What causes demand pull inflation?
a)
rise in price due to a decrease in supply
b)
a rise in price level due to an increase in consumption
c)
a rise in price due to an increase in the cost of production
d)
a decrease in price due to a decrease in supply
197.
According to the wage-price spiral, if a company gives a worker a raise in pay, what must they also do?
a)
 Raise the price of their products
b)
go out of business
c)
lower the price of their products
198.
Fiscal policy is
a)
decisions the government makes to fight inflation
b)
actions the the Federal Reservice takes to control money supply
c)
does not help with inflation
199.
Tax that is flat or fixed for individuals
a)
regressive tax
b)
proportional tax
c)
lending tax
d)
income tax
200.
What causes cost push inflation
a)
An increase in demand for goods and services
b)
An increase in supply
c)
A rise in production costs passed on to consumers
d)
A fall in the price of imports
201.

Who is in charge of Monetary Policy

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of the Treasury

202.

Monetary Policy is the Federal Reserve Systems attempt to...

a)

control the amount of money in circulation

b)

control the Federal Government's debt

c)

control state governments' spending

d)

none of these answers are correct.

203.
Which of these is NOT a monetary policy tool?
a)
Discount rate
b)
Balance Accounts
c)
Open Market Operation
d)
Reserved Requirements
204.

If the Fed wants to reduce the amount of loans a bank can make, then it should adjust...

a)

Open Market Operations

b)

The Reserve Ratio

c)

The Discount Rate

205.

If the Fed wants to increase the cost of loans, then it should adjust...

a)

Open Market Operations

b)

The Reserve Ratio

c)

The Discount Rate

206.

An expansionary policy means that the Fed is attempting to

a)

increase the size of the nation's money supply

b)

decrease the size of the nation's money supply

207.

A contractionary policy means that the Fed is attempting to

a)

increase the size of the nation's money supply

b)

decrease the size of the nation's money supply

208.
Selling bonds
a)
increases money supply
b)
decreases money supply
209.
Buying bonds
a)
increases money supply
b)
decreases money supply
210.
Which of the following scenarios would cause the nation’s money supply to increase?
a)
Decreasing government spending
b)
Lowering interest rates
c)
Raising interest rates
d)
Selling bonds to investors
211.
What action would the Federal Reserve take to control inflation?
a)
Buy government securities
b)
Decrease the required reserve ratio
c)
Increase taxes
d)
Increase the discount rate
212.
The Fed keeps a certain amount of money out of circulation. This is referred to as....
a)
Reserve requirement
b)
Emergency Fund
c)
Stockpile
d)
Hoard
213.

The tools of fiscal policy are...

a)

Interest rates

b)

Taxes and Government spending

c)

Checks and balances

d)

Open market operations

214.

Fiscal policy is actions taken by ______________ to stabilize the economy.

a)

The federal Reserve

b)

The Air force

c)

the government

d)

Wall street

215.

Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use expansionary fiscal policy?

a)

Decrease the discount rate

b)

Increase taxes

c)

Decrease government spending

d)

Increase government spending and decrease taxes

216.

Contractionary fiscal policy are law aimed at reducing inflation. How might Congress use contractionary fiscal policy?

a)

Decrease government spending and increase taxes

b)

Decrease taxes

c)

Send stimulus checks to every person in the economy

d)

Increase government spending

217.

When would Congress most likely use contractionary fiscal policy?

a)

During periods of high unemployment

b)

During periods of high inflation

c)

During periods of low economic production

d)

During periods of peace

218.

Which is an example of expansionary fiscal policy?

a)

The Federal reserve lowers the discount rate

b)

The government raises taxes on all citizens by 5%

c)

The government increases spending by building more infrastructure

d)

The federal reserve increases the reserve requirement

219.

Which is an example of contractionary fiscal policy?

a)

The government increasing taxes on all goods and services by 5%

b)

The president issues an executive order

c)

The federal reserve purchases bonds

d)

Government spending increasing

220.
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
221.

The federal government's overall approach to spending and taxes is called

a)

Physical Policy

b)

Fiscal Policy

c)

вежба

d)

Monetary Policy

222.

"The Fed refers to the Federal Reserve System, the Central Bank of the United States. The FOMC is the Federal Open Market Committee, the group responsible for implementing monetary policy."

a)

Fiscal policy

b)

Monetary policy

223.

"In February, lawmakers set themselves up to reach a more permanent spending agreement by the end of March. Congress agreed to increases to domestic and defense spending over the next two years, raising funding for domestic programs by $128 billion and hiking defense budgets by $160 billion. But they didn’t actually decide where the money would go."

a)

Fiscal policy

b)

Monetary policy

224.

"The U.S. Federal Reserve is almost certain to hike interest rates Wednesday to the highest level in a decade: 1.5 to 1.75 percent. "

a)

Fiscal policy

b)

Monetary policy

225.
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.
226.
Taxing & spending to help the economy grow is referred to as
a)
expansionary policy
b)
monetary policy
c)
contractionary policy
d)
budget deficit
227.
Taxing & spending to slow the economy is referred to as 
a)
budget surplus 
b)
monetary policy
c)
contractionary policy
d)
budget deficit
228.
When the government raises taxes, what does it take out of circulation?
a)
Money
b)
Credit
c)
People
d)
Jobs
229.

A system that imposes a greater percentage of taxation on higher income levels, operating on the theory that high-income earners can afford to pay more.

a)

Regressive tax system

b)

Proportional tax system

c)

Progressive tax system

d)

Tax reform

230.

A tax system that applies the same tax rate to all individuals regardless of income.

a)

Progressive tax system

b)

Regressive tax system

c)

Proportional tax system

d)

Efficient tax system

231.

A tax system that levies the same percentage on products or goods purchased regardless of the buyer's income and is thought to be disproportionately difficult on low earners.

a)

Progressive tax system

b)

Regressive tax system

c)

Proportional tax system

d)

Efficient tax system

232.

A form of demand-side economics that encourages government action to increase or decrease demand and output.

a)

Fiscal policy

b)

Keynesian economics

c)

Monetary policy

d)

Supply-side economics

233.

A form of economics focusing on tax cuts to help the economy by raising supply.

a)

Fiscal policy

b)

Keynesian economics

c)

Monetary policy

d)

Supply-side economics

234.

an income level below that which is needed to support families

a)

standard of living

b)

command economy

c)

externality

d)

poverty threshold

235.

The number of unemployed people as a percentage of the labor force

a)

Unemployment rate

b)

GDP

c)

GDP per capita

d)

Inflation