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Worksheets

EPF Midterm Review

Total questions: 193

Worksheet time: 1hrs 4mins

Name
Class
Date
1.

The condition of scarcity can be described as one that

a)

afflicts only poor people and nations

b)

exists when our unlimited needs/wants exceed our limited resources

c)

exists when our limited resources exceed our unlimited needs/wants

d)

only applies to luxury items

2.

The 4 Factors of Production (FOP) are

a)

rent for land, wages for labor, profit for capital, interest for entrepreneurship

b)

land, labor, capital, entrepreneurship

c)

land, labor, physical capital, financial capital

d)

land, labor, resources, profits

3.

The crops and animals on a farm are examples of which factor of production?

a)

Land

b)

Labor

c)

Capital

d)

Entrepreneurship

4.

Opportunity cost (OC) can be described as

a)

the number 2 alternative in your list of choices

b)

the next best choice and one you didn't choose

c)

your number 1 tradeoff when making a choice

d)

your most desirable tradeoff

e)

all of these answers are examples of opportunity cost (OC)

5.

Which description is most correct about opportunity cost (OC)

a)

impacts small businesses more often than large businesses

b)

can be avoided if you have enough money

c)

is inherent in all decisions/choices

d)

can only be expressed in monetary terms

6.

__________ is the fundamental, universal, and perpetual economic problem that no one is immune to.

a)

price floors/price ceilings

b)

Scarcity

c)

Shortage

d)

the study of microeconomics

7.

The difference between scarcity and shortage is

a)

scarcity is a natural & re-occurring condition; shortage is a man-made condition

b)

shortage only happens with new products

c)

shortage is a natural & re-occurring condition; scarcity is a man-made condition

d)

shortage is the fundamental, universal economic problem

8.

George earns a $250 bonus at his job for increasing his output by an additional 50% two weeks in a row. He makes a list of what he wants to buy with his bonus: 1: the latest model of Adidas athletic shoes; 2: Air Pods; 3: a new coat. He buys Adidas. What is his opportunity cost?

a)

the Air Pods

b)

the shoes

c)

the coat

d)

the cash

9.
Sam loves science and wants to become a doctor but he is learning how to make clay bricks like his father and grandfather.
a)
Free Market
b)
Traditional
c)
Mixed
d)
Command
10.
Katia is an accountant in a government run business where she was placed after graduation.
a)
Command
b)
Traditional
c)
Free Market
d)
Mixed
11.
Mary Ann runs a car dealership selling only government produced cars.  At the end of the month Mary Ann must give all of the money she made back to the government.
a)
Traditional 
b)
Free Market
c)
Mixed
d)
Command
12.
Joe owns a shoe store.  At the end of the month Joe decides what to do with his profits.
a)
Command
b)
Free Market
c)
Traditional
13.
Nike and Under Armour sell similar products.  This leads to a decrease in price and an increase in quality.
a)
Free Market
b)
Command
c)
Traditional
14.
Sarah would like to become a doctor when she grows up.  Unfortunately, she lives in a country where her job will be decided for her by the government.
a)
Traditional
b)
Free Market
c)
Mixed
d)
Command
15.
Sally works in a private company that has to follow government rules for public safety.
a)
Free Market
b)
Command
c)
Mixed
d)
Traditional
16.

A mixed economy has characteristics of both

a)

Traditional and market

b)

Market and command

c)

Command and traditional

d)

Command and laissez-faire

17.
Which two groups of people are represented in the circular flow model?
a)
Buyers and Sellers
b)
Producers and Consumers
c)
Government and Private Individuals
d)
Households and Businesses
18.

When customers and business owners exchange products and money, because it will help them both in some way.

a)

voluntary exchange

b)

volunteering to help someone for free

c)

opportunity cost

d)

reading quizzes

19.

The amount of money a business makes after its expenses are paid

a)

profit

b)

supply

c)

demand

d)

scarcity

20.

Focusing on a narrow range of products/services that can be produced most efficiently and cost-effectively.

a)

subsistence

b)

specialization

c)

scarcity

d)

bartering

21.

The development of a worldwide economy where resources flow fairly freely across borders.

a)

Globalization

b)

Economy

c)

GDP

d)

Economic Independence

22.

A share of ownership in the assets and earnings of a business

a)

dividends

b)

bond

c)

stock

d)

mutual fund

23.

Distribution of earnings paid to stockholders

a)

mutual fund

b)

stock

c)

dividends

d)

common stock

24.

When the demand curve shifts to the left, this suggests demand has

a)

increased

b)

decreased

c)

Quantity demanded has increased

d)

Quantity demanded has decreased

25.

When the demand curve has shifted to the right, this suggests demand has

a)

increased

b)

decreased

c)

quantity demanded has increased

d)

quantity demanded has increased

26.

When price increases, quantity demanded

a)

increases

b)

decreases

c)

supply would decreases, not quantity supplied

d)

supply would increase, not quantity supplied

27.

Much of the tea in the U.K. is imported from India. If wages for Indian tea workers rose, thus increasing input costs, how would this effect supply of tea in the U.K.?

a)

Supply would increase

b)

Supply would Decrease

c)

Supply would stay the same

d)

India is not a real country

28.

If a wave of Peruvian immigrants migrated to south Florida, how might this affect the demand for Peruvian goods in the region?

a)

Demand would increase

b)

Demand would decrease

c)

Demand would be unchanged

d)

Quantity Demanded would increase

29.

In Jim's household, everyone consumes and enjoys milk. Recently, the price on milk increased by two dollars, but despite this increase, Jim and his family still continue to buy the same amount of milk, for they consider it a necessity. Jim's family's demand for milk would be considered fairly

a)

elastic

b)

inelastic

30.

When the price on Dasani bottle water decreased, Brad quit buying Nestle bottled water and switched over to Dasani. Brad's demand for Nestle water is fairly

a)

inelastic

b)

elastic

31.

When price increases, quantity supplied

a)

increases

b)

decreases

32.

When price decreases, quantity supplied

a)

increases

b)

decreases

33.

Which of the following are considered fixed costs? (There are two answers)

a)

Rent

b)

Firm operators' salaries

c)

Electricity

d)

Part-time workers' wages

34.

Which of the following would be considered variable costs?

a)

Raw materials

b)

Electricity

c)

Part-time workers

d)

All of the above

35.

If input costs increase, what will a producer have to do to avoid losing revenue?

a)

Raise price

b)

Lower Price

c)

Decrease supply

d)

Increase supply

36.

If you are going to buy a new bed mattress, and the salesman tells you there will actually be a sale on mattresses in a week, what will that do to your demand for mattresses in that moment?

a)

Decrease

b)

Increase

c)

Stay the same

37.

What causes a shift in the demand curve?

a)

A decrease in price

b)

An increase in price

c)

A change in an area other than price

d)

A change in price and availability

38.

The amount of a good or service that producers are willing and able to sell at all possible prices during a given period of time.

a)

Supply

b)

Demand

c)

Factor of Production

d)

Production

39.

The market equilibrium price is the price at which

a)

surpluses depress the number of goods supplied

b)

shortages and surpluses will have no effect on the market

c)

the government will not intervene in the market

d)

the quantity demanded is the same as the quantity supplied

40.

What is the Equilibrium Price?

a)

1

b)

2

c)

3

d)

4

41.

When there is a shortage the price will usually?

a)

rise

b)

fall

c)

remain the same

d)

equilibrium

42.

The diagram represents a(n)

a)

increase in supply

b)

decrease in supply

c)

change in quantity supplied

d)

none of the above

43.

The diagram represents a

a)

increase in demand

b)

decrease in demand

c)

change in quantity demand

d)

none of the above

44.

What is a Sole Proprietorship?

a)

Business owned by president

b)

Business owned by several companies

c)

Business owned by one person

d)

Business owned by a company

45.

Sole proprietorship business can be started by

a)

at least seven persons

b)

any one person

c)

at least two persons

d)

at least three persons

46.

Sole proprietorship business owner has

a)

Restricted Liability

b)

No Liability

c)

Unlimited Liability

d)

Limited Liability

47.

To start a partnership business, what should be the minimum number of partners?

a)

2

b)

10

c)

4

d)

20

48.

In partnership, partners liabilities are

a)

Limited

b)

Unlimited

c)

Limited to the capital invested

d)

Limited to the amount mentioned

49.

What is meant by the term 'unlimited liability'?

a)

Owners do not have to use their own money to pay the debts of their business.

b)

Some sole traders do not know how to manage a business effectively.

c)

If a partner is lazy the business cannot remove them.

d)

The owners of a business have personal responsibility for paying its debts.

50.

when a group of people form a business or organization and have rights and liabilities separate from the individuals involved

a)

Corporation

b)

Shareholder

c)

Asset

d)

Liability

51.

money or debt owed

a)

Asset

b)

Liability

c)

Shareholder

d)

Medicare Tax

52.

Walmart is an example of a:

a)

single owner

b)

partnership

c)

corporation

d)

non-profit

53.

Someone who wants to control all aspects of the business should form this type of business.

a)

non-profit

b)

partnership

c)

sole proprietorship

d)

franchise

54.

A very large business with branches all over the world.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

55.

Over 2 million people own stock in American Steel; what type of business is it?

a)

Sole Proprietorship

b)

Paartnership

c)

Corporation

56.

Which of these describes an oligopoly?

a)

A market dominated by a few sellers

b)

A market where products sold are identical

c)

A market where there is no competition

d)

A market where the buyer dictates terms

57.

A business is operating in a market of perfect competition. Which of these is a characteristic of this market?

a)

Consumers influence price

b)

There are differentiated products

c)

Suppliers influence price

d)

There are no barriers to entry

58.

A large supermarket determines the price it pays its suppliers. Which term defines this market?

a)

Monopsony

b)

Monopoly

c)

Perfect competition

d)

Imperfect competition

59.

A characteristic of an imperfect market is?

a)

a large number of buyers and sellers

b)

sellers and consumers accept the going price

c)

the seller influences the price to earn more profit

d)

no barriers to entry or exit

60.

A characteristic of perfect competition is

a)

the seller influences the price to earn more profit

b)

the seller reduces output to drive up prices and increase profits

c)

no participant is large enough to set the price of an identical product

d)

there are restrictions to market entry and exit

61.

Which is not a characteristic of an oligopoly?

a)

an industry dominated by a small number of large firms

b)

there are significant barriers to entry and exit

c)

firms often collude to increase their profits

d)

there is only one firm selling all output in the market

62.

Analyze Information Which type of business would have the lowest technological barrier to entry?

a)

dog walking

b)

medical laboratory payroll

c)

processing firm

d)

smartphone app development

63.

Businesses in the same industry coming to an agreement to determine quantities and prices is known as a/an…?

a)

Agreement

b)

Cartel

c)

Duopoly

d)

Management

64.

A market structure where only a few sellers operate is …?

a)

Perfect market

b)

Monopoly

c)

Perfect competition

d)

Oligopoly

65.

Characteristics of perfect competition include

a)

a large number of buyers and sellers

b)

one firm dominates

c)

a few firms dominate

d)

competition is missing

66.

A monopoly's prices are determined by

a)

competing firms

b)

market equilibrium

c)

perfect competition

d)

the monopoly itself

67.

The government takes part in the US economy to

a)

encourage competition and fair play

b)

reduce the effects of imperfect competition

c)

regulate industries that serve the public good

d)

all of these are correct

68.

An agreement among firms to divide the market or set prices is known as collusion.

a)

True

b)

False

69.

In 1890, the government passed the Sherman Antitrust Law to _________.

a)

prevent future monopolies

b)

break up a major monopoly

c)

regulate existing monopolies

d)

create zones for existing monopolies

70.

Define "incentive."

a)

The cost of producing a good or service

b)

The fact that human wants are unlimited but resources are limited

c)

Something that motivates someone to do or not do something

d)

The price charged for a good or service

71.

Which of the following is NOT an example of someone responding to an incentive?

a)

Alyza buys more candy because the price went down.

b)

Seeing that restaurants are making a lot of profit in his area, Jesse decides to open a new restaurant.

c)

When the government raises the gas tax by 50%, Jeremiah decides to drive less.

d)

Jose falls asleep because he is tired.

72.

Because of the problem of scarcity, ______________.

a)

supply equals demand

b)

prices are above equilibrium

c)

socialism is superior to capitalism

d)

people must make choices about how to use their resources

e)

the government must impose high taxes on the citizenry

73.

_____________ advantage refers to the ability of an individual or group to do something better overall than another individual or group.

a)

Absolute

b)

Comparative

c)

Competitive

d)

Superior

e)

Product

74.

______________ advantage refers to the ability of an individual or group to do something at a lower opportunity cost than another individual or group

a)

Absolute

b)

Competitive

c)

Comparative

d)

Product

e)

Opportunity Cost

75.

With the same number of labor hours, Guatemala can produce 100 bananas or 100 papayas, while Honduras can produce 50 bananas or 25 papayas. Which country has the absolute advantage in producing bananas and why?

a)

Guatemala because it can make more bananas

b)

Guatemala because its opportunity cost is lower

c)

Honduras because it can make more bananas

d)

Honduras because its opportunity cost is lower

76.

With the same number of labor hours, Guatemala can produce 100 bananas or 100 papayas, while Honduras can produce 50 bananas or 25 papayas. Which country has the comparative advantage in producing bananas and why?

a)

Guatemala because it can make more bananas

b)

Guatemala because its opportunity cost is lower

c)

Honduras because it can make more bananas

d)

Honduras because its opportunity cost is lower

77.

A country that has an absolute advantage in producing everything cannot benefit from trading with any other country.

a)

True

b)

False

78.

With the same number of labor hours, Guatemala can produce 100 bananas or 100 papayas, while Honduras can produce 50 bananas or 25 papayas. To maximize the combined number of fruits produced, _____

a)

Guatemala should produce both fruits while Honduras produces nothing

b)

Honduras should produce both fruits while Guatemala produces nothing

c)

Guatemala should produce bananas; Honduras should produce papayas

d)

Guatemala should produce papayas; Honduras should produce bananas

79.

The exchange of one benefit or advantage for another that is thought to be better

a)

Scarcity

b)

Economy

c)

Tradeoff

d)

Incentives

80.

Compare the costs of an action with the benefits of that action; if benefits exceed costs, then the action is worth it

a)

Incentives

b)

cost-benefit analysis

c)

Positive economics

d)

Normative economics

81.

Economics is often defined as the study of how people choose to…

a)

Use their limited resources to satisfy their unlimited wants.

b)

Making Policy Recommendations

c)

Analyze the benefits and consequences of their

decisions.

d)

Analyzing Everyday Enigmas

82.

A full time construction worker working 60+ hours a week at $18 per hour plus overtime pay.

a)

Employed

b)

Unemployed

c)

Not in the Labor Force

d)

Not Applicable / Not Counted

83.

A 40 year old man living at home collecting a disability check.

a)

Employed

b)

Unemployed

c)

Not in the Labor Force

d)

Not Applicable / Not Counted

84.

A 52 year old out of work coal miner who stays at home but isn’t looking for a job.

a)

Employed

b)

Unemployed

c)

Not in the Labor Force

d)

Not Applicable / Not Counted

85.

Laid off autoworker who is receiving unemployment benefits and is looking for a new job.

a)

Employed

b)

Unemployed

c)

Not in the Labor Force

d)

Not Applicable / Not Counted

86.

Jada is laid off her job due to a down turn in the economy.

a)

Cyclical Unemployment

b)

Structural Unemployment

c)

Seasonal Unemployment

d)

Frictional Unemployment

87.

Tara doesn't like working at her current job anymore and decided to quit and look for work at other companies.

a)

Cyclical Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Seasonal Unemployment

88.

The Kia car maker just replaced Tyrone with a robot that can do the job 5 times as fast. Tyrone is now unemployed.

a)

Frictional Unemployment

b)

Cyclical Unemployment

c)

Structural Unemployment

d)

Seasonal Unemployment

89.

Bree just graduated from college and is looking for her 1st job.

a)

Cyclical Unemployment

b)

Seasonal Unemployment

c)

Frictional Unemployment

d)

Structural Unemployment

90.

Taylor used to be a parking attendant, but she is now out of a job because the company installed an automatic pay machine.

a)

Cyclical Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Seasonal Unemployment

91.

Reebok said their sales were down for the first quarter. Two hundred employees were laid off.

a)

Seasonal Unemployment

b)

Structural Unemployment

c)

Frictional Unemployment

d)

Cyclical Unemployment

92.

Identify the correct definition of the unemployment rate

a)

The number of those in work as a percentage of the population of working age people

b)

The number of those unemployed as a percentage of the population of working age people

c)

The number of those unemployed as a percentage of the labour force

d)

The number of those not in work and unemployed as a percentage of the population of working age people

93.

The Business Cycle measures ___ over time.

a)

wealth

b)

inflation

c)

economic growth

94.

GDP declines during a(an)

a)

peak

b)

contraction

c)

expansion

95.

Economic recovery begins-

a)

above the trend line

b)

at the end of a recession (trough)

c)

at the "boom" period

96.

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

97.

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

98.

Which of the following is a peak?

a)

A

b)

B

c)

C

d)

D

99.

Which of the following is an expansion, or recovery?

a)

A

b)

B

c)

C

d)

D

100.

Which of the following is a trough?

a)

A

b)

B

c)

C

d)

D

101.

Which of the following is a recession, or contraction?

a)

A

b)

B

c)

C

d)

D

102.

GDP divided by ______ = GDP per capita

a)

population

b)

income

c)

wealth

d)

production

103.

When the economy experiences an expansion, it is most likely the case that

a)

GDP is increasing, unemployment is increasing, and inflation is decreasing

b)

GDP is decreasing, unemployment is decreasing, and inflation is increasing.

c)

GDP is increasing, unemployment is decreasing, and inflation is increasing

d)

GDP is decreasing, unemployment is decreasing, and inflation is decreasing.

104.

"Business investment in capital goods (machinery for production) rises." The headline above affects which economic indicator the most?

a)

Unemployment

b)

Consumer Price Index

c)

Inflation

d)

Gross Domestic Product (GDP)

105.

To measure the health of an economy, people look at the symptoms or indicators used to measure the health of an economy. The 3 main indicators include all of the following except;

a)

Gross Domestic Product

b)

Imflation/ Consumer Price Index

c)

Unemployment

d)

Average Income Level

106.

Gross Domestic Product includes the market value of all FINAL goods and services produced within a country during a given period of time.

a)

True

b)

False

107.

Intermediate goods, used goods, and illegal goods are ____________ in a countries Gross Domestic Product(GDP).

a)

included

b)

excluded

108.

Chemical fertilizers used by the farmers or cloth used by a tailor are examples of ________________________.

a)

Intermediate goods

b)

Final Goods

109.

According to this graph from the powerpoint, what country has the highest per capita GDP?

a)

Canada

b)

USA

c)

Mexico

110.

what does GDP stand for:

a)

Great Domestic Products

b)

Gross Distributed Product

c)

Gross Domestic Product

d)

Great Distributed Product

111.
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)
112.

A Japanese car company makes a new sedan in Kentucky. Which country's GDP is this added to?

a)

U.S.

b)

Japan

c)

U.S. and Japan

d)

China

e)

no answer

113.

Which of the following would NOT be counted in the US's GDP?

a)

A used car your grandfather sold you

b)

You buy a new pair of shoes online

c)

A business buys tires to resell

d)

A city government's spending on a new park

114.

Is this counted in the GDP of the US?

Cars made by a US company in South Korea.

a)

Yes

b)

No

115.

Is this counted in the GDP of the US?

The materials (lumber, cement, bricks) used to build a house.

a)

Yes

b)

No

116.

Is this counted in the 2020 GDP of the US?

A home built in 2015 which was sold to new owners.

a)

Yes

b)

No

117.

Is this counted in the GDP of the US?

A farmer's purchase of a new tractor.

a)

Yes

b)

No

118.

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

119.

The consumer price index measures 

a)

the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year

b)

the cost of buying a basket of goods and services, which changes from year to year depending on the price level

c)

the cost of buying a basket of goods and services, which changes from year to year depending on consumer tastes and preferences

d)

all of the above, depending on what the CPI is trying to measure

120.

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

121.
Who is most likely to be hurt by inflation?
a)
someone who borrowed money
b)
a retiree on a fixed income
c)
a business owner
d)
the U.S. government
122.
Property Tax is-
a)
Tax on things you buy or purchase
b)
tax on the house you own
c)
tax take out of your paycheck
d)
tax that you pay once a year on your income
123.
Payroll Tax is-
a)
the amount of money you actually get to take home
b)
FREE MONEY
c)
tax taken out of your paycheck by your employer or boss
d)
tax when you buy something
124.
Income tax is-
a)
Money your employer pays to you
b)
Money you earn and put into the bank
c)
Tax paid on the money you earn annually
d)
Money you pay to your employee
125.
Sales Tax is-
a)
tax on retail goods
b)
tax on the house you own
c)
tax taken out of your paycheck
d)
tax that you pay once a year on your income
126.

12. A tax paid when purchases are made on a specific good, such as gasoline.

a)

Ad Valorem Tax

b)

Sales and Use Tax

c)

Franchise Tax

d)

Excise Tax

127.

As your income goes up the percentage of taxes you pay goes up (what type of tax?)

a)

Progressive tax

b)

Proportional tax

c)

Regressive tax

d)

None of the aove

128.

You pay the same percentage in taxes regardless of income level

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

None of the above

129.

As your income goes up, the percentage of income spent on taxes goes down.

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

none of the above

130.

The Federal income tax is an example of which type of tax?

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

none of the above

131.

the flat tax is an example of what type of tax?

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

None of the above

132.

A sales tax is an example of what type of tax?

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

none of the above

133.

Which type of tax hurts low income earners?

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

none of the above

134.

Which type of tax is based on the ability to pay and hurts high income earners?

a)

progressive tax

b)

proportional tax

c)

regressive tax

d)

none of the above

135.

This term describes shortfalls in revenue, when the government's expenditures are greater than what it has collected. Earlier in American history, this only happened during wars.

a)

Balanced Budget

b)

Budget Surplus

c)

Federal Deficit

d)

National Debt

136.

This term describes when revenues and expenditures come out even. Some states, such as Washington, REQUIRE this.

a)

Balanced Budget

b)

Budget Surplus

c)

Federal Deficit

d)

National Debt

137.

This term describes the total amount of money that the federal government has borrowed in order to continue operating. It is currently over $31,000,000,000,000.

a)

Balanced Budget

b)

Budget Surplus

c)

Federal Deficit

d)

National Debt

138.

This term refers to programs through which individuals receive benefits based on their age, income, or some other criteria. Food stamps and social security fall under this term.

a)

Progressive Tax

b)

Regressive Tax

c)

Entitlements

d)

Earmarks

139.
A budget deficit occurs when...
a)
The government brings in more revenue than it spends for a given year
b)
The government spends more money than it brings in for a fiscal year
140.
What is it called when the government takes in more in revenue than it appropriates?
a)
surplus
b)
revenue
c)
defecit
d)
appropriations
141.
What are those items of the national budget that must be funded?
a)
Mandatory
b)
Discretionary
c)
Planned
d)
Revenue
142.
What are those areas of the National Budget that can but do not have to be funded?
a)
Mandatory
b)
Discretionary
c)
Revenue
d)
Deficit
143.

Which is considered discretionary spending (select all which may apply)

a)

national parks

b)

Medicare

c)

nuclear energy

d)

Interest on the debt

e)

education

144.

Which of the following NOT considered mandatory spending?

a)

national parks

b)

Medicare

c)

medical assistance for low-income families

d)

Social Security

145.

related to government revenue (taxes), spending, or debt

a)

fiscal

b)

proportional

c)

monetary

d)

discretionary

146.

related to the money supply

a)

monetary

b)

contractionary

c)

expansionary

d)

fiscal

147.

expanding/increasing/loosening

a)

deficit

b)

contractionary

c)

expansionary

d)

monetary

148.

Fiscal Policy is controlled by...

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of Commerce

149.

The two "tools" of Fiscal Policy are:

a)

the power to tax

b)

the power to spend

c)

the power to borrow money

d)

the power to print money

150.
Taxing & spending to help the economy grow is referred to as
a)
expansionary policy
b)
monetary policy
c)
contractionary policy
d)
budget deficit
151.
Taxing & spending to slow the economy is referred to as 
a)
budget surplus 
b)
monetary policy
c)
contractionary policy
d)
budget deficit
152.
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.
153.
If the unemployment rate is rising and GDP is falling, the fiscal policy action that the federal government should MOST likely follow is 
a)
decreasing taxes.
b)
decreasing spending.
c)
decreasing the money supply.
d)
decreasing the reserve requirement.
154.
When the government raises taxes, what does it take out of circulation?
a)
Money
b)
Credit
c)
People
d)
Jobs
155.

Which of the following statements is true?

a)

Contractionary monetary policy would increase government revenue & slow down the economy.

b)

Contractionary fiscal policy would decrease the reserve requirement & slow down the economy.

c)

Contractionary fiscal policy would lead to an increase in the national debt.

d)

Contractionary monetary never works

156.
Which of the following is an example of expansionary policy?
a)
The Fed sells bonds
b)
the Fed raises reserve requirements
c)
the Fed buys bonds
d)
the Fed raises the Fed funds rate
157.

Which of the following are roles that money plays (check all the ones that apply)

a)

Unit of Account

b)

Hedge for Inflation

c)

Store of Value

d)

Medium of Exchange

e)

Automatic Stabilizer

158.

Cow milk is not an effective form of money because it is not:

a)

Divisible

b)

Portable

c)

Consistent

d)

Durable

159.

When the Fed sells bonds to financial institutions it is likely to ____________ the supply of money

a)

Increase

b)

Decrease

160.

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.

161.

Who is in charge of Monetary Policy

a)

The Government

b)

The Federal Reserve System

c)

The states

d)

The Department of the Treasury

162.
Which of these is NOT a monetary policy tool?
a)
Discount rate
b)
Balance Accounts
c)
Open Market Operation
d)
Reserved Requirements
163.

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

164.

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

165.

Which policy would help fight inflation?

a)

Expansionary

b)

Contractionary

166.
Buying bonds
a)
increases money supply
b)
decreases money supply
167.
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
168.
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
169.

A saving account in a bank represents the function of money:

a)

Store of value

b)

A medium of exchange

c)

A standard for deferred payments

d)

A measure of value

170.

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

a)

Fireworks display

b)

National Defense

c)

Public transportation

d)

Lighthouse

171.

What is the free rider problem?

a)

scarcity even when you pay for a good

b)

Reaping all the benefits without contributing

c)

Common goods that don't have a price

d)

none of the above

172.

What statement best explains why the government provides goods and services to its citizens?

a)

To provide benefits to small groups of people in certain areas of the country.

b)

To provide goods and services that would not be available if individuals had to provide them.

c)

To compete with businesses in the private sector.

d)

To make a large profit by providing certain goods and services to it's citizens.

173.

The United States government provides the following services EXCEPT —

a)

interstate highways

b)

satellite radio

c)

postal service

d)

national defense

174.

What is one reason that local law enforcement is considered a public good?

a)

Everyone in the community benefits from it.

b)

Nobody in the community has to pay for it.

c)

Private firms make a profit from producing it.

d)

Individual citizens pay directly for it.

175.

Which of the following is an example of a positive externality resulting from an outdoor band concert?

a)

An elderly woman in her apartment hears a song that she liked as a child.

b)

A pair of endangered birds leave their nest in a nearby tree when the concert starts.

c)

A pizza parlor closes early, because all of its customers are at the concert.

d)

A traffic jam occurs as drivers hunt for parking spots near the concert.

176.

Which of the following explains why a city fireworks display on the Fourth of July is provided as a public good?

a)

Fireworks displays usually take place in a public area.

b)

Fireworks are a scarce resource.

c)

Nonpayers cannot be prevented from seeing the fireworks.

d)

Each consumer pays a fee to see the fireworks.

177.

What is the market-based response by government to correct a market failure caused by a negative externality?

a)

Pigouvian sibsidy

b)

Quota

c)

Pigouvian tax

d)

All of the above

178.

Driving a car on crowded highway produces

a)

a negative externality.

b)

a positive externality.

179.

Apartment dwellers who buy fire alarms or fire extinguishers generate a

a)

negative externality.

b)

positive externality.

180.

Goods and services produced in other countries and sold domestically.

a)

import

b)

export

181.

The characteristic of a society in which people rely on others for most of the goods and services they want.

a)

Economic Interdependence

b)

Economic Self-Sufficiency

182.

The condition that exists when someone can produce a good or service using fewer resources than someone else.

a)

Absolute Advantage

b)

Comparative Advantage

183.

The condition that exists when someone can produce a good or service at a lower opportunity cost than someone else.

a)

Absolute Advantage

b)

Comparative Advantage

184.

The policy of eliminating barriers to international trade; free trade allows goods and services to move more freely across borders.

a)

Free Trade

b)

Protectionism

c)

Trade Embargo

185.

The policy of erecting trade barriers to shield domestic markets from foreign competition.

a)

Free Trade

b)

Protectionism

c)

Trade Barriers

186.

A limit on the quantity of a good that can be imported during a specific period of time; a type of trade barrier.

a)

Protective Tariff

b)

Import Quota

c)

Trade Embargo

d)

VER

187.

A ban on trade with a country or group of countries, usually for political reasons; a type of trade barrier.

a)

Protective Tariff

b)

Import Quota

c)

Trade Embargo

d)

VER

188.

The process by which people and economies around the world are becoming increasingly interconnected; the integration of national economies into the global economy.

a)

Trade Barrier

b)

Globalization

c)

Macroeconomics

d)

Microeconomics

189.

An international organization based in Geneva that monitors and enforces rules governing global trade.

a)

World Trade Organization

b)

United Nations

c)

World Bank

d)

NAFTA-USMCA

190.

An international organization formed after WWII to promote international peace, security, and cooperation.

a)

World Trade Organization

b)

United Nations

c)

World Bank

d)

NAFTA-USMCA

191.

An international bank that offers low-interest loans, advice, and information to developing nations; an agency of the United Nations.

a)

World Trade Organization

b)

United Nations

c)

World Bank

d)

NAFTA-USMCA

192.

A North American agreement formed to promote trade between Canada, the United States, and Mexico. Just renamed recently.

a)

World Trade Organization

b)

United Nations

c)

World Bank

d)

NAFTA-USMCA

193.
To focus on producing one thing to improve productivity is known as:
a)
Specialization
b)
International trade
c)
Absolute Advantage
d)
Supply and Demand

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