Question 1

Microeconomics focuses on:

Accepted Answer

A)   the employment rate in a country.
B)   individual businesses.
C)   the gross domestic product of a country.
D)   taxation policies.E) None of the above
F) All of the above

Question 2

Which of the following statements is true about the Fed?

Accepted Answer

A)   It regulates financial institutions.
B)   It regulates taxes.
C)   It creates jobs, such as mail carrier or park ranger, during recession.
D)   It can implement decisions only after they are approved by the Senate.E) B) and C)
F) C) and D)

Question 3

In the context of the right to private property, identify a true statement about capitalist economy.

Accepted Answer

A)   Individuals have the right to will property to family members.
B)   The government does not impose any restrictions on the right to property.
C)   Businesses are not free to buy property as they see fit.
D)   Individuals are not free to sell property according to their wishes.E) All of the above
F) B) and C)

Question 4

Which of the following is a recent advancement in the Western European countries that developed powerful socialist economies in the decades after World War II?

Accepted Answer

A)   They are experiencing phenomenal growth.
B)   They are likely to see an influx of potential entrepreneurs from other countries.
C)   They have imposed stiff austerity measures to control government spending.
D)   They have introduced new public benefit programs.E) C) and D)
F) A) and D)

Question 5

Disinflation is defined as a period of slowing average price increases across an economy.

Accepted Answer

A) True 
 B)False

Question 6

In the context of evaluating economic performance, describe productivity.

Accepted Answer

Answers will vary. Productivity refers t...

Question 7

_____ is a market structure with just a single producer completely dominating the industry.

Accepted Answer

A)   Oligopoly
B)   Monopoly
C)   Monopolistic competition
D)   Pure competitionE) A) and D)
F) A) and C)

Question 8

The United States goes through a period of recession because of the continuous decrease in the nation's gross domestic product. The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in:

Accepted Answer

A)   banks obtaining funds at a lower cost.
B)   a rise in the interest rates of bank loans.
C)   individuals getting discouraged to borrow money and spend it.
D)   a drop in the availability of loans to consumers.E) A) and D)
F) A) and C) A

Question 9

Which of the following statements is true of the Troubled Assets Relief Program (TARP) ?

Accepted Answer

A)   It ended up costing taxpayers far less than expected.
B)   It did not offer bailout to automakers.
C)   It invested heavily in green energy.
D)   It was not able to save insurance companies and banks from bankruptcy.E) B) and C)
F) None of the above

Question 10

Socialist economies tend to have very low taxes.

Accepted Answer

A) True 
 B)False

Question 11

In its role as a banker for banks, the Fed:

Accepted Answer

A)   regulates the total amount of money within the overall economy.
B)   reduces the discount rate so that banks can obtain funds at a lower cost.
C)   performs open market operations, which involve buying and selling government securities, which include treasury bonds, notes, and bills.
D)   coordinates the check-clearing process for checks on behalf of any banks that are willing to pay its fees.E) A) and D)
F) All of the above

Question 12

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

Accepted Answer

A)   credit becomes tighter
B)   banks increase the number of loans they make
C)   banks offer subprime mortgage loans
D)   the inflationary pressures in the economy heat upE) A) and D)
F) None of the above

Question 13

Which of the following is a difference between inflation and deflation?

Accepted Answer

A)   The Federal Reserve buys government securities when inflation is a concern, whereas the Federal Reserve sells government securities when deflation is a concern.
B)   Inflation increases the unemployment rate, whereas deflation decreases the unemployment rate.
C)   A high level of inflation is bad for the economy, whereas a high level of deflation signifies a healthy economy.
D)   Inflation is a period of rising average prices across an economy, whereas deflation is a period of falling average prices across the economy.E) B) and D)
F) B) and C)

Question 14

In the context of economic systems, the two key phases of a business cycle are:

Accepted Answer

A)   stagflation and hyperinflation.
B)   depression and retrieval.
C)   contraction and expansion.
D)   recession and deflation.E) C) and D)
F) All of the above C

Question 15

Ancusia, an East Asian country, was plagued by war and corruption for several years. This led to poor economic conditions, and the government was compelled to borrow funds from other nations. Because of the slow economic growth in the country, the government could repay only 15% of its debts. In this scenario, the amount that the government is yet to repay is known as _____.

Accepted Answer

A)   the federal debt
B)   a budget surplus
C)   the debt brake
D)   a revenue deficitE) B) and D)
F) All of the above

Question 16

Ronnie works on a part-time basis for a company that provides home repair and maintenance services. Ronnie is specialized in handling the central heating systems in homes and is therefore needed to be at work only during the winter. He is mostly unemployed for the rest of the year. In this scenario, the form of unemployment faced by Ronnie is _____.

Accepted Answer

A)   seasonal unemployment
B)   structural unemployment
C)   periodical unemployment
D)   cyclical unemploymentE) C) and D)
F) A) and B)

Question 17

In the context of federal debt, if spending is lower than revenue, the government incurs a budget deficit.

Accepted Answer

A) True 
 B)False

Question 18

_____ refers to the relationship between the goods and services that an economy generates and the resources needed to generate them.

Accepted Answer

A)   Productivity
B)   Reserve requirement
C)   Equilibrium quantity
D)   Supply curveE) B) and C)
F) All of the above

Question 19

When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.

Accepted Answer

A)   risk-return relationship
B)   fiscal cliff
C)   bottom-up budgeting
D)   niche barrierE) A) and B)
F) C) and D) B

Question 20

The cosmetics industry in the district of Dunkenburg has many competing companies that sell personal care products. However, each company manufactures products that correspond to different income groups, and these products have different uses. The market structure of the cosmetics industry in Dunkenburg exemplifies _____.

Accepted Answer

A)   pure competition
B)   monopoly
C)   monopolistic competition
D)   oligopolyE) All of the above
F) A) and D)

Exam 2: Economics: The Framework of Business

Microeconomics focuses on:

Correct Answer
verified

Which of the following statements is true about the Fed?

Correct Answer
verified

In the context of the right to private property, identify a true statement about capitalist economy.

Correct Answer
verified

Which of the following is a recent advancement in the Western European countries that developed powerful socialist economies in the decades after World War II?

Correct Answer
verified

Disinflation is defined as a period of slowing average price increases across an economy.

Correct Answer
verified

In the context of evaluating economic performance, describe productivity.

Correct Answer
verified
Answers will vary. Productivity refers t...
View Answer

_____ is a market structure with just a single producer completely dominating the industry.

Correct Answer
verified

The United States goes through a period of recession because of the continuous decrease in the nation's gross domestic product. The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in:

Correct Answer
verified
A

Which of the following statements is true of the Troubled Assets Relief Program (TARP) ?

Correct Answer
verified

Socialist economies tend to have very low taxes.

Correct Answer
verified

In its role as a banker for banks, the Fed:

Correct Answer
verified

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

Correct Answer
verified

Which of the following is a difference between inflation and deflation?

Correct Answer
verified

In the context of economic systems, the two key phases of a business cycle are:

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

In the context of federal debt, if spending is lower than revenue, the government incurs a budget deficit.

Correct Answer
verified

_____ refers to the relationship between the goods and services that an economy generates and the resources needed to generate them.

Correct Answer
verified

When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.

Correct Answer
verified
B

Correct Answer
verified

Exam 2: Economics: The Framework of Business

Microeconomics focuses on:

Correct AnswerverifiedShow Answer

Which of the following statements is true about the Fed?

Correct AnswerverifiedShow Answer

In the context of the right to private property, identify a true statement about capitalist economy.

Correct AnswerverifiedShow Answer

Which of the following is a recent advancement in the Western European countries that developed powerful socialist economies in the decades after World War II?

Correct AnswerverifiedShow Answer

Disinflation is defined as a period of slowing average price increases across an economy.

Correct AnswerverifiedShow Answer

In the context of evaluating economic performance, describe productivity.

Correct AnswerverifiedAnswers will vary. Productivity refers t...View AnswerShow Answer

_____ is a market structure with just a single producer completely dominating the industry.

Correct AnswerverifiedShow Answer

The United States goes through a period of recession because of the continuous decrease in the nation's gross domestic product. The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in:

Correct AnswerverifiedA

Which of the following statements is true of the Troubled Assets Relief Program (TARP) ?

Correct AnswerverifiedShow Answer

Socialist economies tend to have very low taxes.

Correct AnswerverifiedShow Answer

In its role as a banker for banks, the Fed:

Correct AnswerverifiedShow Answer

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

Correct AnswerverifiedShow Answer

Which of the following is a difference between inflation and deflation?

Correct AnswerverifiedShow Answer

In the context of economic systems, the two key phases of a business cycle are:

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In the context of federal debt, if spending is lower than revenue, the government incurs a budget deficit.

Correct AnswerverifiedShow Answer

_____ refers to the relationship between the goods and services that an economy generates and the resources needed to generate them.

Correct AnswerverifiedShow Answer

When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Answers will vary. Productivity refers t...
View Answer

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified