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- 1. Multiple Choice
Which describes the type of exchange that does not use money?
financing
borrowing
bartering
purchasing
- 2. Multiple Choice
Which most accurately explains why fiat money differs from commodity money?
Fiat money an also be used as a productive input.
Fiat money only has value as a medium of exchange.
Fiat money has value because it is a precious metal such as gold.
Fiat money has value because it enables the barter system to work.
- 3. Multiple Choice
Which is the purpose of the Federal Reserve Bank?
protect bank depositors against losing their money
manage the growth of the U.S. economy
prevent stock market fraud
issue government bonds
- 4. Multiple Choice
Which is the purpose of the Securities and Exchange Commission (SEC)?
issues government bonds
manage the growth of the U.S. economy
protect bank depositors against losing their money
prevent stock market fraud
- 5. Multiple Choice
How can a government best redistribute wealth?
by enacting a progressive tax system
through the use of tariffs and duties
- 6. Multiple Choice
Which describes the most likely effect of the Fed lowering the discount rate on overnight loans?
a reduction in the inflation rate
an increase in the money supply
- 7. Multiple Choice
What purpose do price ceilings serve?
they protect the poor
increase production
Create a surplus of goods
they enable rationing
- 8. Multiple Choice
Price ceiling is the maximum price the government allows seller to charge.
True
False
- 9. Multiple Choice
The Supreme law that governs the United States is
the Constitution
House of Representatives
Senate
- 10. Multiple Choice
Counterfeiting is legal. (True or False)
True
False
- 11. Multiple Choice
Domestic Commerce
is foreign commerce
is international commerce
is within the same country
- 12. Multiple Choice
Tariffs are taxes on producers and consumers from outside the United States.
True
False
- 13. Multiple Choice
Taxes are collected at which level:
State
Federal
local
All of the above
- 14. Multiple Choice
In the United States, who first proposes the federal budget?
citizens
Congress
state governors
the president
- 15. Multiple Choice
Which agency would be most likely to make sure a new baby stroller has acceptable safety features?
The FTC
The FDA
The CPSC
The EPA
- 16. Multiple Choice
What is the purpose of freezing someone's assets?
restrict trade
pay off the national debt
reduce crime
reduce employment
- 17. Multiple Choice
What do capitol controls prevent?
Hasty movements of money into and out of a country's economic system
Large -scale exports of extremely low-priced agricultural goods
- 18. Multiple Choice
What do bank regulations prohibit?
freezing assets
selling government bonds
money laundering
lowering interest rates
- 19. Multiple Choice
What government official is required by law to deliver a budget to the U. S. Congress?
IRS director
speaker of the House
the President
Secretary of State
- 20. Multiple Choice
What does the enforcement of antitrust laws do?
speeds up the flow of capital and wages
leads to budget surpluses
curtails venture capital investment
- 21. Multiple Choice
Why is taxation necessary?
Prevent a regressive method of production
control the money supply and manage economic growth
- 22. Multiple Choice
What does a progressive taxation system do?
creates government corporations
funds social programs
increases the tax rate as income rises
- 23. Multiple Choice
The World Trade Organization was formed in order to accomplish what?
collect protective tariffs
Promote free trade
- 24. Multiple Choice
Politicians approve pork barrel spending for what purpose?
win political support
increase wages
restrict international trade
- 25. Multiple Choice
Which of these has been a trend in the twentieth century?
growing levels of government spending
the spread of censorship
decreased free trade
- 26. Multiple Choice
Government corporations can be described as which of the following?
privately funded
social services providers
independently run
public good producers
- 27. Multiple Choice
Which merit good does the U.S. government provide through a payroll tax?
health care
education
national defense
- 28. Multiple Choice
Which of these is an example of a land-use law?
regulation against pollution
residential zoning ordinance
- 29. Multiple Choice
Parental freedom is limited by laws requiring what?
educational subsidies
uncensored textbooks
compulsory education
public school funding
- 30. Multiple Choice
Government corporations can be described as which of the following
privately funded
social services providers
independently run
- 31. Multiple Choice
Why does the free-market system require government regulation?
Producers are driven by the profit motive to work against competition.
Foreign competition would wipe out domestic production.
- 32. Multiple Choice
What doe predatory pricing involve?
Government charging tariffs to make foreign products cost more
Large company charging below its production cost in order to eliminate competition
- 33. Multiple Choice
Which is provided by producers in the circular flow of the free-market system?
labor and investment
individual goods
public goods
interest-free loans
- 34. Multiple Choice
What do banking regulations prohibit?
freezing assets
selling government bonds
lowering interest rates
money laundering
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