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- 1. Multiple Choice
The main benefit of a technical school certification is
more limited choices for careers
more time spent perfecting skills compared to college
reduced costs compared to other degree options
reduced earning potential compared to college
- 2. Multiple Choice
Jared's friends invite him to dinner at an expensive restaurant. Jared examines his budget and determines he cannot afford an expensive dinner, so he declines the invitation. Which of the following best represents the reason for Jared's decision?
His dislike of the selected cuisine
His limited income and budget
Lower price of an alternative option
Preference for another style of food
- 3. Multiple Choice
One bank offers a 4% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. Assuming no other differences between the loans, a customer should choose the fixed rate loan because
the interest rate is higher and guaranteed to increase
the interest rate is higher but will not increase
the interest rate is lower and will not increase
the interest rate is lower but is likely to increase
- 4. Multiple Choice
One bank offers a 2% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. It is likely better to choose the fixed rate loan, even though the interest rate is higher, because the rate on the
fixed loan is open to fluctuation
variable loan appears less attractive
variable loan can increase dramatically
variable loan will never increase
- 5. Multiple Choice
Roger always purchased insurance for the 10 years he owned an expensive speedboat. Since he never had an accident, the premiums he paid were
beneficial because Roger was protected from financial loss
fruitless because Roger received nothing in return
unnecessary because Roger values long term security
wasted because Roger preferred protection to present cash
- 6. Multiple Choice
In the event no property damage or loss occurs during an insurance contract period, the premium payments were wasted only if the policyholder
derived more benefit than the premium cost
paid a minimal cost compared to received benefit
would have preferred added risk over security
would have preferred added security over risk
- 7. Multiple Choice
If private investors put a lot of money into the U.S. economy, the gross domestic product will increase. What else will likely occur?
A decrease in inflation and in the unemployment rate
An increase in inflation and in the unemployment rate
An increase in the unemployment rate and a decrease in inflation
An increase in inflation and a decrease in the unemployment rate
- 8. Multiple Choice
A period of economic stability began in the 1980s. In 2001, prices began to increase. In 2007, an economic crisis caused prices to fall. Which of these dates would be considered the peak of this cycle?
1980
1990
2001
2007
- 9. Multiple Choice
In 2008, Federal Reserve Chairman Ben Bernanke made credit more available within the U.S. financial system by loaning money to banks. This action was to encourage a(n)
contraction
expansion
peak
trough
- 10. Multiple Choice
If a series of events results in a decrease in investments in U.S. businesses, what is the result on the U.S. economy?
Contraction
Expansion
Peak
Trough
- 11. Multiple Choice
Which of the following industries benefits from government subsidies?
Agriculture
Electronics
Fast food
Medicine
- 12. Multiple Choice
Which of the following is a government price control?
Farm subsidies
Minimum wage
Research funding
Union actions
- 13. Multiple Choice
What can result from the line marked "Artificial Price"?
Artificial monopoly
Natural monopoly
Shortage
Surplus
- 14. Multiple Choice
Which of these is an example of the line marked "Artificial Price"?
Farm subsidies
Market price
Minimum wage
Rent controls
- 15. Multiple Choice
Which of these is a natural monopoly?
Cell phone service
Computer repair
Package delivery service
Sewage treatment
- 16. Multiple Choice
Why is it in the best interest of the government to regulate natural monopolies?
To allow multiple suppliers access to the market
To gain a share of the profits of the monopoly
To keep costs to a minimum for consumers
To prevent surplus goods and services
- 17. Multiple Choice
Which best describes the function of the Federal Reserve System?
Administration of taxes
Control of the money supply
Oversight of international trade
Regulation of commerce
- 18. Multiple Choice
If inflation begins to rise rapidly, which step is the Federal Reserve likely to take?
Decrease the federal funds rate.
Increase the reserve requirement.
Buy government securities.
Decrease the discount rate.
- 19. Multiple Choice
The country has entered a period of economic growth, but prices are rising too rapidly. To stabilize prices, the Federal Reserve decides to
decrease the federal funds rate
decrease the reserve requirement
raise the discount rate
buy more government securities
- 20. Multiple Choice
Economists warn that the nation is slipping into a recession. Which fiscal policies will the federal government most likely take to help the economy grow?
Lower taxes and decrease spending
Lower taxes and increase spending
Raise taxes and decrease spending
Raise taxes and increase spending
- 21. Multiple Choice
Imagine the federal government has a national debt of $10.2 trillion. Congress's budget for the coming year includes a spending projection of $4.2 billion. Tax revenue projects $3.8 billion. Which fiscal policy should Congress adopt to avoid increasing the national debt?
Cut interest rates
Decrease spending
Lower taxes
Raise reserve requirements
- 22. Multiple Choice
Which of the following statements best accounts for the data shown in the graph above?
Spending relative to tax revenue drastically increased in 2009.
Spending relative to tax revenue steadily decreased before 2009.
Spending relative to tax revenue steadily increased after 2009.
Spending relative to tax revenue has been stable for the last decade.
- 23. Multiple Choice
Which of the following statements best describes the data shown for 2012 to 2015?
Spending and tax rates will both decrease.
Spending and tax rates will remain about the same.
Spending will decrease relative to tax revenue.
Tax revenues will increase relative to spending.
- 24. Multiple Choice
Cardinal Comics produces graphic historical novels and retails them through local shops throughout the United States. The publisher maintains an in-house staff of editors and illustrators but contracts out writing, printing, and distribution. Its printer uses domestically recycled paper but imports ink and much of its printing equipment from overseas. Segment D of the circular flow diagram above reflects which part of this scenario?
Cardinal Comics retails novels through local shops.
Publisher maintains an in-house staff of editors.
Printer imports ink and printing equipment.
Consumers pay sales tax on purchase of novels.
- 25. Multiple Choice
Cardinal Comics produces graphic historical novels and retails them through local shops throughout the United States. The publisher maintains an in-house staff of editors and illustrators but contracts out writing, printing, and distribution. Its printer uses domestically recycled paper but imports ink and much of its printing equipment from overseas. Segment B of the circular flow diagram above reflects which part of this scenario?
Consumers purchase graphic historical novels from local shops.
Publisher maintains an in-house staff of editors.
Cardinal Comics contracts out writing, printing, and distribution.
Printer uses domestically recycled paper.
- 26. Multiple Choice
The city council allocates funds for road repair. Which of the following circumstances would be a positive externality?
Citizens spend less money repairing punctured and torn tires.
Gas stations throughout the city reduce fuel prices.
Municipal taxes increase to fund added services.
Traffic flow in the city improves
- 27. Multiple Choice
A new bakery opens downtown. Which circumstance would most likely be a negative externality?
Customers of the old bakery see a drop in prices.
Neighboring stores get more foot traffic.
The city government collects added tax revenue.
The old bakery down the street loses some customers
- 28. Multiple Choice
Tennessee Valley Authority (TVA) Sites
Red = water dams, Purple = nuclear power plants, Orange = fossil fuel power plants
Study the map above. The TVA believes that the positive externalities outweigh the negative externalities of which renewable resource?
Coal
Uranium
Water
Lumber
- 29. Multiple Choice
Tennessee Valley Authority (TVA) Sites
Red = water dams, Purple = nuclear power plants, Orange = fossil fuel power plantsStudy the map above.
Who would object to negative externalities related to the use of renewable and nonrenewable resources in the map?
Business owners forced to relocate when property is seized
Families who lose power during a storm
Local officials who collect taxes for energy usage
Workers who undergo training for new high-wage positions
- 30. Multiple Choice
A free-trade agreement lowers restrictions on trucking across international borders. Which of the following would be a negative externality for the local environment?
Higher costs for domestic goods
Fewer imports of renewable resources
More water consumption
An increase in air pollution
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