WorksheetsEcon Unit 2
Total questions: 29
Worksheet time: 15mins
Economic growth would most likely result from —
decreased trade
increased productivity
increased employment
decreased sales of stock
How does the introduction of new manufacturing technologies generally affect economic growth?
It creates growth by creating safer work environments.
It creates growth by increasing the productivity of labor.
It restricts growth because workers have to learn the new technology.
It restricts growth because of the additional expense of the new technology.
Which of the following best completes the graphic?
Stock Exchange
Federal Reserve System
Treasury Department
Washington, D.C.
Which phrase BEST completes this list? Duties of the Federal Reserve System: - Provides financial services to the government - Regulates interest rates - ___________?
Oversees national banking institutions
Manages foreign exchange rates
Collects taxes from corporations
Negotiates international trade agreements
The federal government uses monetary policy to
determine tax rates on income.
guarantee access to consumer credit.
adjust interest rates based on currency supply.
expand free trade to international markets.
If policy makers are concerned about inflation, which fiscal and monetary policies would be MOST effective?
lowering taxes and buying bonds
lowering taxes and raising the reserve requirement
increasing taxes and lowering the discount rate
increasing taxes and selling bonds
How would the Federal Reserve MOST likely respond when faced with low consumer confidence?
by raising reserve requirements to increase the money supply
by purchasing bonds to increase the money supply
by raising the discount rate to decrease the money supply
by lowering the federal funds rate to decrease the money supply
During an economic recession the Federal Reserve Banks will most likely react by —
easing monetary policy making it easier to lend money
raising the discount rate to affect the monetary supply
tightening monetary policy making lending more difficult
reducing open market transactions to reduce the money supply
Which scenario is most likely to result when the Federal Reserve raises the reserve requirement?
More money is required to be kept in banks to loan out to businesses, so they can invest in their companies.
More money is required to be kept in bank reserves, and less is available to be loaned out to businesses to invest in the economy.
More money is required to be kept in the Federal Reserve banks to make it available for loans to member banks in poor economic times.
More money is required to be kept in the Federal Reserve banks, which increases the amount of money in circulation and stimulates the economy.
Which statement describes a role of government in a free enterprise system?
determining which goods should be produced
encouraging citizens to become entrepreneurs
deciding which businesses are needed
controlling career paths for citizens
The role of the United States government in the domestic economy is BEST described as
encouraging lower prices on needed goods and services.
promoting investment and economic growth.
providing equitable distribution of resources.
maintaining ownership of major utilities.
What is the primary economic benefit of government programs that provide grants and subsidized loans for college education?
protecting jobs for professors and academic researchers
improving the potential human capital of individuals
earning profit on the interest charged to students
stabilizing the job market by keeping students in school
Which example BEST describes a policy that promotes economic stability?
A city government requests bids to determine which company will build a new city hall.
A state government proposes an increase in sales taxes to finance highway improvements.
The president promotes a tax credit to benefit first-time home buyers.
Congress extends the time period during which people can receive unemployment benefits.
Which statement is an example of a cost for a government policy to achieve full employment?
The rate of inflation will increase.
Wages for workers will decrease.
Innovation in production will decrease.
The value of government bonds will increase.
What is the MOST likely result of a policy intended to stimulate economic growth?
Inflation will rise.
Unemployment will rise.
Economic equity will increase.
Economic efficiency will increase.
Which of the following type of tax is collected by state and local governments but not by the federal government?
Tariffs
Sales tax
Excise tax
Income tax
Which of the following is the MAIN source of federal government revenue?
local sales tax
corporate income tax
social security tax
personal income tax
The rate of which local tax is determined by assessing the value of land and buildings?
income tax
property tax
sales tax
use tax
The unemployment rate has risen to 9.7% and both the Gross Domestic Product (GDP) and Consumer Price Index are declining. The government could promote economic growth and address this economic situation by —
increasing government spending and lowering taxes
decreasing government spending and lowering taxes
increasing government spending and increasing taxes
decreasing government spending and increasing taxes
During an expansionary phase of the business cycle the government could implement a contractionary fiscal policy in order to —
create jobs
promote spending
encourage investment
address any inflation issues
Which title BEST describes the information?
Tools of Federal Fiscal Policy
Tools of Federal Monetary Policy
Measures of Domestic Investments
Measures of Aggregate Expenditures
Which of the following best completes the graphic organizer?
Problems of command economies
Benefits of the free enterprise system
Solutions to reducing government debt
Arguments for expanded government regulation
Based on the information on the table, which economic condition is characteristic of all three countries?
Low GDP per capita
High levels of inflation
Low inflationary levels
High levels of unemployment
Which term replaces the question mark? Consumption + Investment + Government + Net Exports = ?
Disposable Personal Income
Gross Domestic Product
National Savings
Transfer Payments
What is one factor that led to the trend shown in this table?
decrease in interest rates
expansion of government services
participation in a global economy
reduction in production levels
An expansionary period in the business cycle is distinguished by —
high inflation
declining sales
fewer excise taxes
low unemployment
Which stage of the business cycle describes the period when the real gross domestic product (GDP) stops falling?
Expansion
Peak
Recession
Trough
Which stage of the business cycle has the highest inflation rate?
Expansion
Peak
Recession
Trough
Use the graph below to answer the question. A country’s unemployment rate increased to 9.3%. Inflation grew at an average of just 0.2%. Where is this country in the business cycle?
Expansion
Peak
Recession
Trough
