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WorksheetsPraxis 5911 Economics
Total questions: 9
Worksheet time: 5mins
If the price elasticity of demand for a good is greater than 1, it is classified as:
perfectly elastic
elastic
inelastic
unit elastic
Which factor is a determinant of long-run aggregate supply?
current price level
current exchange rate
technology level
level of consumer confidence
What is the primary function of money in an economy?
providing employment
facilitating trade
reducing poverty
controlling inflation
When the marginal cost of producing an additional unit of a good is equal to the marginal benefit derived from consuming that unit, the rational decision would be to:
increase production
reevaluate production models
decrease production
maintain current production
When a country has less favorable terms of trade, it means that the country:
trades additional exports to maintain its imports
imports additional goods for the value of its exports
reduces its exports and increases its imports
reduces its imports and increases its exports
In a command economy, resource allocation is managed primarily by
large corporations
labor unions
competitive markets
central planning
The view that specialization leads to gains from trade is based on which of the following principles?
Comparative advantage
Absolute advantage
Price elasticity
Market equilibrium
In the circular flow model of a market economy, which of the following describes the roles of firms and households in the product markets and in the factor markets?
PRODUCT MARKETS: Firms sell goods to households. FACTOR MARKET: Firms sell resources to to households.
PRODUCT MARKETS: Firms sell goods to households. FACTOR MARKET: Firms buy resources from households.
PRODUCT MARKETS: Firms buy goods from households. FACTOR MARKET: Firms buy resources from households.
PRODUCT MARKETS: Firms buy goods from households. FACTOR MARKET: Firms sell resources to households.
Assume that the marginal propensity to consume increased from 0 7.5 in year 1 to 0 8.0 in year 2. Based on this information, which of the following is a correct conclusion?
In year 1, a $100 billion increase in government spending would have increased real output by a maximum of $75 billion.
From year 1 to year 2, the spending multiplier increased from 4 to 5.
A given change in government spending would have had a more powerful effect in year 1 than in year 2.
The marginal propensity to save
increased from year 1 to year 2.
