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- 1. Multiple ChoiceThe dollar value of all final goods, services, and structures produced in a country in a year is known as __________.Gross Domestic ProductProfit MotiveGross National ProductFranchise
- 2. Multiple ChoiceThe three synonymous terms to describe the U.S. economic system are ___________, ___________, and ______________.fascist, totalitarian, commandcapitalism, free enterprise, free marketsocialist, collectivism, sharedcommunist, marxist, limited
- 3. Multiple ChoiceHow does the government operate in a free enterprise economy?J It establishes laws and rules to maintain competition.It tells businesses what to produce and what to sell.It takes a "hands-off" approach to business.It interferes with business only when it is profitable
- 4. Multiple ChoiceConsumers can influence
the production and
sale of goods by ________saving their money"voting" with their dollarspaying off their debtpaying off their debt - 5. Multiple ChoiceA general rise in the level
of prices over time
is known as ___________.a catalystvoluntary exchangeinflationprofit - 6. Multiple ChoiceA demand schedule is best described as ______________time linepie chartincentivegraph
- 7. Multiple ChoicePure competition and
monopoly are ______________.the samealmost the sameoppositesshould not be compared - 8. Multiple ChoiceNo person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. —Fifth Amendment of the U.S. Constitution
The Fifth Amendment reinforces the fundamentals of an economy based on the principles of free enterprise bypromoting ownership of property for business purposesprotecting the rights of individual property ownersB prohibiting the government from owning propertyrequiring a trial in order for the government to seize property - 9. Multiple ChoiceWhat is one way the U.S. economy can be adversely affected when interest rates are lowered?Prices may inflateLess capital may availableTaxes rates may decreaseUnemployment may increases
- 10. Multiple ChoiceThe U.S. government was given the authority to collect income taxes with the passage of theDodd-Frank Act14th amendment16th amendmentSherman Anti-Trust Act
- 11. Multiple ChoiceIn the U.S. free enterprise system one of the primary roles of the government is to —employee a majority of the workforceguarantee that investors profits are secureensure the safety of products through regulationprovide new sources of funding for technology start ups
- 12. Multiple ChoiceWhich of the following is a non-price determinant of demand?ProductivityPrice CeilingSubsidyConsumer preferences
- 13. Multiple ChoiceThe grocery store is which sector of the circular-flow model?householdsbusiness firmsproductionfactor
- 14. Multiple ChoiceThe government of Xanadu decides what to produce in its only factory. The government sets quotas on how much product the workers must produce. The government sets the price at the government store and decides who may purchase these goods. The government controls all property.
Which type of economy does Xanadu have?free enterpriseefficientsocialistcommunist - 15. Multiple ChoiceAndrew values where he lives. He likes to make decisions about his job and his ability to acquire wealth. He also wants to be the one to decide what producers should produce and what he is able to purchase.
In which type of economy does Andrew live?socialistcommunistsubsistencefree enterprise - 16. Multiple ChoiceGovernment can affect the circular flow model in all of the following ways EXCEPTincreasing interest ratescontracting to buildpassing anti-trust legislationappointing new judges
- 17. Multiple ChoiceMichelle is beginning her own small
tailoring business. She begins by making a list
of all the capital goods she will need.
Which of the following does NOT belong on her list?threadsewing machinebuilding spaceassistants - 18. Multiple ChoiceWhich characteristic of the U.S. free enterprise system creates the incentive to work, save, and invest?voluntary exchangeprivate property ownershipconsumer sovereigntySocial Security system
- 19. Multiple ChoiceIndividual freedom of producer and consumer
Variety of goods
Responsive prices
Investment opportunities
Creation of wealthSolutions to reducing government debtProblems of command economiesBenefits of the free enterprise systemArguments for expanded government regulation - 20. Multiple ChoiceHow does competition influence markets in the free enterprise system?It leads to lower wages and income.It leads to improved safety conditionsIt leads to the best product at the lowest price.It leads to a variety of products available to the consumer.
- 21. Multiple ChoiceProgressive tax istax rate decreases as income increasesa tax levied on a person's earningsthe tax rate or percentage of income decreases as income increasestax rate increases as the income increases
- 22. Multiple ChoiceDeflation isrise in the general level of prices in an economydollar value of all final goods produced within the U.S. bordersdecline in the level of prices in an economymajor slowdown of economic activity during which many people are out of work
- 23. Multiple ChoiceRevenue istotal income from sales of outputthe dollar value of all final goods produced within the U.S. borders during one yearmeaning average per personright of the government to impose mandatory payments from individuals and businesses
- 24. Multiple ChoiceAn example of a Progressive taxSocial Security TaxFlat TaxSales TaxFederal Income Tax
- 25. Multiple ChoiceSchool tax is an example of--progressive taxstate taxlocal taxproportional tax
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