Bus 10 Test 3 (Chapters 2-7, 9-11)

3 January 2023
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question
When the market price of a good is below the equilibrium price, and all other determinants are unchanged: Select one: a. the quantity demanded will exceed the quantity supplied. b. the government will regulate the price of the good to ensure equilibrium is attained. c. the supply curve will be to the right of the demand curve. d. a surplus will exist in the market.
answer
the quantity demanded will exceed the quantity supplied
question
Which of the following statements provides the most accurate comparison of socialism and communism? Select one: a. Communism believes that the government should always strive to balance its budget, while socialism accepts deficit spending as the price of achieving true equality b. Socialism strives for an equal distribution of income but communism wants income to go primarily to those who own and operate private businesses. c. Both socialism and communism want to achieve a more equal distribution of income and wealth, but under communism, the government takes more control over people's lives. d. Under socialism, the government owns most businesses, while under communism the church owns most businesses.
answer
Both socialism and communism want to achieve a more equal distribution of income and wealth, but under communism, the government takes more control over people's lives.
question
Neo-Malthusians believe that the solution to poverty is: Select one: a. birth control b. Increasing taxes on the rich to support increasing social programs c. Increasing world population d. educating poor people
answer
a. birth control
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A __________ is a very severe recession that is usually accompanied by a decline in the average level of prices. Select one: a. deflation b. depression c. stagflation d. disinflation
answer
b. depression
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__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product Select one: a. monopoly b. perfect competition c. oligopoly d. monopolistic competition
answer
b. perfect competition
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Communism is an economic system in which: Select one: a. Individual consumers make all economic decisions. b. The government and private citizens own equal shares of the economic resources c. The government makes almost all of the major economic decisions. d. Almost all of the productive resources are owned by private businesses.
answer
c. The government makes almost all of the major economic decisions.
question
Which of the following would be a topic emphasized in a microeconomics class? Select one: a. Computing GDP b. Reasons for rising and falling unemployment rate c. How market conditions determine the price of a specific product d. How the government use fiscal and monetary policies to stablize the economy
answer
c. How market conditions determine the price of a specific product
question
The four basic types of unemployment arefrictional, structural, seasonal, and: Select one: a. traditional b. cyclical c. procedual d. industrial
answer
b. cyclical
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__________ unemployment refers to unemploymentcaused by the restructuring of firms or by a mismatch between the skills of jobseekers and the requirements of available jobs. Select one: a. Structural b. Cyclical c. Seasonal d. Frictional
answer
a. Structural
question
Which of the following statements about government deficit spending is most accurate? Select one: a. One reason the government has a hard time reducing deficits is that there is a great deal of pressure on the government to expand its spending each year. b. The federal government violates the law by running deficits because the U.S. Constitution requires the government to balance its budget each year. c. Although the government used to run big deficits, it has consistently run surpluses since the late 1980s d. The government has used deficit spending to lower the national debt.
answer
a. One reason the government has a hard time reducing deficits is that there is a great deal of pressure on the government to expand its spending each year.
question
In the U.S., the __________ has the role of managing the money supply and interest rates. Select one: a. Federal Reserve Bank b. Federal Deposit Insurance Corporate c. Commerce Department d. United States Treasury
answer
a. Federal Reserve Bank
question
Due to the rights and freedoms afforded under capitalism: Select one: a. people are motivated to take calculated risks. b. people don't have to choose where they will work. c. people feel safe and don't feel the need to take added risks by starting businesses. d. the prices of necessities are always very low.
answer
a. people are motivated to take calculated risks.
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____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxe sand/or government spending. Select one: a. Incomes policy b. Monetary policy c. Fiscal policy d. Cyclical policy
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c. Fiscal policy
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__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy. Select one: a. Seasonal b. Cyclical c. Structural d. Frictional
answer
b. Cyclical
question
Brain drain has occurred in many socialistic nations because: Select one: a. Tax rates on well-respected professionals such as doctors tend to be very high. b. The government does little to protect the natural environment. c. Workers tend to have to work longer hours and receive fewer benefits under socialism. d. Socialism encourages an unequal distribution of income, leaving many without medical and social services.
answer
Tax rates on well-respected professionals such as doctors tend to be very high.
question
The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the: Select one: a. elasticity of that product or service b. supply of that product or service c. demand of that product or service d. utlity of that product or service
answer
b. supply of that product or service
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During the recession of 2008-2009, the administrations of Presidents George W. Bush and Barack Obama flooded several banking, financial services, and insurance firms with government funds in exchange (at least temporarily) for government ownership rights. The unprecedented move signaled the government's concern that the global banking system might collapse if these firms ended up in bankruptcy. The decision for active government involvement in the operations of these firms demonstrates: Select one: a. The freedoms the U.S. government has under capitalism b. The unforgiving nature of capitalism c. The trend toward mostly capitalist nations to move toward socialism d. The desire for more individuals in the U.S. to live under a socialist system
answer
c. The trend toward mostly capitalist nations to move toward socialism
question
The markets for laundry detergents, soft drinks, and automobiles are dominated by just a few sellers. Economists would classify these markets as examples of: Select one: a. Perfect competition. b. Monopolistic competition. c. Oligopolies d. Monopolies
answer
c. Oligopolies
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The foundation of the U.S. economic system is based on: Select one: a. capitalism b. The saying "from each according to ability, to each according to needs" c. the ideas of Thomas malthus d. equality
answer
a. capitalism
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Which of the following statements about capitalism is the most accurate? Select one: a. A strength of capitalism is its ability to deal with environmental problems. b. A drawback of capitalism is that people have little freedom to pursue their own goals. c. In capitalist economies, most resources are owned by the government. d. Capitalism is characterized by unequal distribution of wealth and income.
answer
d. Capitalism is characterized by unequal distribution of wealth and income.
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The _________ is a statistic used to compute thepace of inflation or deflation Select one: a. index of inflationary trends b. gross domestic product c. consumer price index d. index of leading indicators
answer
c. consumer price index
question
Which of the following is a basic right under capitalism? Select one: a. The right to vote b. Freedom of collusion c. Freedom from taxation d. The right to compete
answer
d. The right to compete
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The Federal Reserve Bank operates: Select one: a. under the direct control of the President of the U.S. b. Under the direction of Congressional Banking Oversight Committee c. as a semi-private organization not under the direct control of the government d. Under the U.S. Treasury Department
answer
c. as a semi-private organization not under the direct control of the government
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_________ is the name of a free-market economic system in which most of the factors of production and distribution - such as land, factories, railroads, and stores - are owned by individuals. Select one: a. materialism b. communism c. socialism d. capitalism
answer
d. capitalism
question
_________ is considered by some to be the father of modern economics. Select one: a. Adam Smith b. Thomas Carlyle c. Thomas Malthus d. John Keynes
answer
a. Adam Smith
question
A major trend in the world today is that: Select one: a. Free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism b. Governments in socialist economies are increasing their use of social programs and relying on higher tax rates to finance these programs c. Governments in countries with capitalist economies are paying less attention to environmental concerns and issues involving social equality d. Productivity in the service sector is increasing much more rapidly than productivity in agriculture and manufacturing
answer
a. Free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism
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__________ is a condition in which inflation isincreasing, at a decreasing rate Select one: a. depression b. deflation c. stagflation d. disinflation
answer
disinflation
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__________ unemployment refers to persons whopurposefully quit their jobs and have not yet found a new job. Select one: a. Seasonal b. Cyclical c. Frictional d. Structural
answer
c. Frictional
question
_____________ refers to a general rise in theprice level of goods and services over time Select one: a. inflation b. acceleration c. recession d. depression
answer
a. inflation
question
Which of the following is an important premise of Smith's conclusions about economic prosperity? Select one: a. Understand what motivates people lead to prospertiy b. Understanding concept of survival of the fittest will lead to prosperity c. command economies and structured markets must be in place for prosperity d. Individual freedom is necessary if a society is to prosper.
answer
d. Individual freedom is necessary if a society is to prosper.
question
Y-axis of the supply and demand curve is: Select one: a. Quantity b. Number of customers c. Quality d. Price
answer
d. Price
question
On average, what percentage of the GDP does theU.S. government collect through taxes? Select one: a. 12% b. 28% c. 33% d. 50%
answer
b. 28%
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The U.S. national debt is about: Select one: a. $25 trillion b. $17 trillion. c. $380 billion d. $560 billion
answer
b. $17 trillion.
question
A typical demand curve shows that: Select one: a. people tend to buy more of a good when its price decreases b. As supply increases, the amount purchased decreases c. As supply decreases, the amount purchased increases d. As people earn more income, they buy more goods
answer
a. people tend to buy more of a good when its price decreases
question
Under a capitalistic system, decisions such as what goods and services to produce, what to charge, and how much to import or export are made by: Select one: a. A central planning board that consists of legislators and attorneys b. government agencies c. the Congress d. individuals
answer
d. individuals
question
X-axis of the supply and demand curve is: Select one: a. price b. quality c. number of customers d. quantity
answer
d. quantity
question
____________ looks at the behavior of individual people and organizations in specific markets Select one: a. Microeconomics b. Nanoeconomics c. Finite economics d. Macroeconomics
answer
a. Microeconomics
question
What does equilibrium price mean? Select one: a. customer price is zero b. profit is zero for the supplier c. cost is zero for the supplier d. market price where customers willing to pay what suppliers willing to sell
answer
d. market price where customers willing to pay what suppliers willing to sell
question
How is it that people working in their own self-interest produce goods, services, and wealth for others? Select one: a. Entrepreneurs tend to include themselves in a group of people who need charitable support. A portion of the entrepreneur's profit (as required by law) goes to the charity of one's choice to support the less fortunate b. By taking advantage of a vast supply of labor, people working in their own self-interest could hire others at very low wages. c. In order to earn money and produce goods that improve lives, self-directed gain would provide jobs, and subsequently wages for others d. . The government pays entrepreneurs in the U.S. to produce goods, services, and wealth for others.
answer
c. In order to earn money and produce goods that improve lives, self-directed gain would provide jobs, and subsequently wages for others
question
An oligopoly is a market that is characterized by: Select one: a. A few large sellers who dominate the market b. Several small firms that compete primarily by differentiating their products c. One firm that totally dominates the supply of the product. d. A large number of small firms all producing very similar products
answer
a. A few large sellers who dominate the market
question
When the supply curve and demand curve for a particular good are shown together on a single graph, the point at which the two curves intersect identifies the: Select one: a. Total profit earned by producers b. Equilibrium price of the good c. Amount of time it takes to bring together the buyers and sellers of the good d. Total amount of labor that will be employed in that market
answer
b. Equilibrium price of the good
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__________ unemployment results when the demand for labor varies during the year . Select one: a. Structural b. Seasonal c. Cyclical d. Frictional
answer
b. Seasonal
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The economic and political system in which the government owns all of the factors of productions is called: Select one: a. Communism b. Monopoly c. Socialism d. Capitalism
answer
Communism
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Economist Thomas Malthus believed that ______________ would limit economic progress Select one: a. depletion of gold reserves b. inability of developed nations to compete against cheap foreign labor c. overpopulation d. high taxes
answer
c. overpopulation
question
The price of iPhones™ is falling. In a free-market economic system where everything else is equal, the most likely explanation is: Select one: a. Suppliers are not producing enough product b. Sellers cannot keep up with market demand. c. The product has competition at the equilibrium price d. The government determined that the product was not worth the price tag that the producer was asking
answer
c. The product has competition at the equilibrium price
question
When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a: Select one: a. Balance of payments deficit b. GDP deflator c. Federal Reserve allowance d. National deficit
answer
d. National deficit
question
Under capitalism: Select one: a. The primary function of the government is to distribute wealth more evenly. b. Utilities, health care, education, and other important services are operated by the government. c. Most of the means of production and distribution are privately owned and operated for profit. d. Markets operate to carry out the decisions made by central planners.
answer
c. Most of the means of production and distribution are privately owned and operated for profit.
question
The total value of final goods and services produced within a nation's borders in a given year is known as that nation's: Select one: a. aggregate production quota b. index of aggregate economic output c. gross domestic product d. aggregate domestic output
answer
c. gross domestic product
question
Resource development is: Select one: a. The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals. b. The study of how to increase the amount of available resources and create conditions that will make better use of these resources. c. The part of economics that looks at the operation of a nation's economy as a whole. d. The part of economics that looks at particular markets.
answer
b. The study of how to increase the amount of available resources and create conditions that will make better use of these resources.
question
Economics is the study of how a society _______ Select one: a. invests wisely in the stock market. b. employs statistical techniques to make predictions about the evolution of society over the long run. c. governs itself for the good of its citizens. d. employs resources to produce goods and services and distribute them among competing groups and individuals.
answer
d. employs resources to produce goods and services and distribute them among competing groups and individuals.
question
When the market price of a good is above its equilibrium value, and all other determinants are unchanged: Select one: a. a surplus will exist in the market b. quantity demanded will exceed the quantity supplied c. both supply and demand curves shift to the right d. a shortage will exist
answer
a surplus will exist in the market
question
In a free market economic system, the mechanism of __________ is the key determinant used to signal to producers what to produce and how much to produce. Select one: a. quantity b. sales tax c. price d. the market curve
answer
c. price
question
If a shortage exists for a good in a free-market economy, the: Select one: a. government will order suppliers to increase production of that good b. government will establish a rationing system to make sure fair distribution of the good c. price of the good will rise d. price of the good will fall
answer
c. price of the good will rise
question
Three important economic indicators of theUnited States are the unemployment rate, the price indices, and the: Select one: a. Gross domestic product b. debt to equity ratio (DER). c. Gross industry index d. aggregate domestic output
answer
a. Gross domestic product
question
One of the benefits of a free market is that: Select one: a. A. Businesses provide customers with quality products at fair prices b. Businesses do better with more government regulation. c. The government dictates the number of competitors there are in each industry d. Businesses all make the same amount of profit
answer
a. A. Businesses provide customers with quality products at fair prices
question
According to the invisible hand concept, the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to: Select one: a. Permit government owned industries, such as telecommunications, transportation, and energy, and operate these firms as nonprofit organizations. b. Allow private ownership of businesses, but make use of extensive regulation to force businesses to behave in a socially desirable way. c. Allow entrepreneurs personal freedom to follow their own self-interest. d. Impose high taxes on individuals, and use the revenue to subsidize businesses to encourage them to produce the maximum rate of output.
answer
c. Allow entrepreneurs personal freedom to follow their own self-interest.
question
__________ is a condition in which the average level of prices is actually falling Select one: a. stagflation b. depression c. deflation d. disinflation
answer
c. deflation
question
A major premise of a socialist system is: Select one: a. To keep tax rates extremely low so that businesses do not need to support government projects. b. To reduce the inequality in the distribution of wealth. c. To make sure that those that create wealth are allowed to keep that wealth. d. To create incentives to encourage entrepreneurs to create jobs and economic growth.
answer
b. To reduce the inequality in the distribution of wealth.
question
A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to: Select one: a. remain constant b. decrease c. increase d. fluctuate randomly around its equilibrium value
answer
c. increase
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Fiscal policy involves increases or decreases in: Select one: a. Government spending and taxes. b. Interest rates. c. Exports and imports d. The money supply
answer
a. Government spending and taxes.
question
The market price of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that: Select one: a. The equilibrium price is lower than the market price. b. The supply of money has decreased. c. The government has decided to set a higher price so that firms competing in the market make an adequate profit. d. There is a shortage in the market for apples
answer
d. There is a shortage in the market for apples
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Adam Smith wrote: Select one: a. U.S. Constitution b. Wealth of Nations c. Magna Carta d. Declaration of Independence
answer
b. Wealth of Nations
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__________ exists when the entire supply of a good is controlled by a single seller Select one: a. oligopoly b. monopoly c. perfect competition d. pure capitalism
answer
b. monopoly
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One way to lessen the U.S. government budget deficit is to: Select one: a. Increase social programs such as welfare and food stamps b. Cut spending c. Increase spending d. Issue more government bonds
answer
b. Cut spending
question
One of the greatest concerns associated with capitalism is that: Select one: a. Some businesspeople may let greed guide their behavior. b. It is not very successful at creating wealth. c. Producers are unlikely to supply the goods and services that consumers value the most. d. The amount of economic freedom enjoyed by consumers is very limited.
answer
a. Some businesspeople may let greed guide their behavior.
question
Which of the following indicators provides the clearest indication that an economy is experiencing deflation? Select one: a. A decrease in the unemployment rate b. A decrease in the CPI c. A decrease in GDP. d. An increase in the inflation rate
answer
b. A decrease in the CPI