Macroeconomics Chapter 2 example #63354

If a nation restricts trade with other nations, then the most likely effect is A. expanded economic wealth of the nation. B. lower prices of goods and services in the nation. C. consumers in the nation are made worse off. D. increased specialization of production.

In a market system, employees and suppliers A. are generally subject to as much risk as firm owners but get to share in the profits. B. are usually shielded from risk, but at the cost of not sharing in the profits of the firm. C. are usually shielded from risk and share in the profits of the firm. D. bear as much risk as firm owners but don't get to share in the profits.

In a market system, which of the following will eliminate high-cost producers and allow only the low-cost producers to survive? A. competition B. specialization C. a sovereign government D. money

In the circular flow model of the market system, business firms' major role is to A. sell products and resources. B. buy products and resources. C. sell products and buy resources. D. buy products and sell resources.

The main characteristics of a modern market system include all of the following except A. entrepreneurs are free to obtain and use resources to produce goods and services. B. economic power is diffused by competition among economic units. C. government is restricted to national defense and does not intervene at all in various markets. D. consumers are free to buy goods and services that their budgets allow.

The use of money contributes to economic efficiency because A. governmental direction of the production and distribution of output can be avoided by using money. B. it is necessary for the creation of capital goods. C. roundabout production could not occur without the availability of money. D. it promotes specialization by overcoming the problems with barter.

Two major virtues of the market system are that it A. results in an equitable personal distribution of income and always maintains full employment. B. allocates resources efficiently and allows economic freedom. C. results in price-level stability and a fair personal distribution of income. D. eliminates discrimination and minimizes environmental pollution.

Which of the following characteristics is least unique to a market system? A. the widespread use of money B. freedom of enterprise and choice C. private ownership of property resources D. competition among buyers and sellers pursuing monetary returns

Which of the following is a distinguishing feature of laissez-faire capitalism? A. public ownership of all capital B. a circular flow of goods, resources, and money C. central planning D. minimal government intervention

Which of the following is not a reason why specialization and trade are beneficial to society? A. Specialization fosters learning by doing, thus lowering the unit-costs of products. B. Firms and workers become less dependent on others for producing goods and services. C. The total output of economic goods may be increased even without any increase in resources. D. Scarce resources are utilized more efficiently by exploiting differences among them.