Download Economics Review Semester Exam

Economics Review Semester Exam
1. The amount of money the consumer sector of the economy has available
for spending after personal income taxes have been deducted is
Disposable personal income
2. Since 1790, when the United States' center of population was near
Baltimore, the population has moved steadily west
3. After passing through a trough, the business cycle enters a period of
Expansion
4. In a market economy, a high price is a signal for producers to offer
more and consumers to buy less
5. The unemployment rate is not a completely accurate measure of how many
people are out of work because it doesn't count dropouts
6. The Fed uses all of the following to conduct monetary policy EXCEPT
price controls
7. The total receipts test is a method for estimating demand elasticity
8. Supply-side economics attempts to stimulate output and lower
unemployment by reducing taxes to stimulate investment and consumer
spending
9. A long-range effect of the baby boom will be an increase in transfer
payments
10. Collective bargaining refers to labor-management negotiations.
11. Absolute advantage and comparative advantage are terms related to
nations engaged in trade
12. Trade barriers are enacted to protect domestic industry
13. Perfect competition is characterized by all of the following EXCEPT
product differentiation
14. One effect of NAFTA was to reduce tariffs among the United States,
Canada, and Mexico
15. In the final years of the Soviet Union, Mikhail Gorbachev instituted
a policy of perestroika, which
called for restructuring the economy and converting to a market
economy.
16. The Japanese economy is characterized by capital-intensive
industries
17. The most popular and widely publicized measure of stock market
performance on the New York
Stock Exchange is the DJIA
18. Multinational corporations have operations in several different
countries
19. The borrowing power of a developing nation is weakened if it has a
history of Expropriation.
20. A modified free enterprise economy has all of the following
advantages EXCEPT the guarantee of a job for anyone willing and able
to work
21. The fundamental problem that economics tries to solve is how to
satisfy unlimited wants with limited resources
22. Individuals earn their incomes in factor markets
23. The free enterprise economy thrives on all of the following EXCEPT
central government planning
24. The chief disadvantage of a sole proprietorship is that the owner
has unlimited liability
25. A multinational corporation has manufacturing or service facilities
in several countries
26. The study of the economic behavior of individuals and firms is called
Microeconomics
27. A demand curve shows all of the following EXCEPT the supply produced
at every price
28. A modest price increase for local cable television service has had
little or no effect on the demand, indicating that demand for the product
is Inelastic
29. In a market economy, a low price is a signal for producers to supply
less and consumers to buy more
30. At a given price, a surplus occurs when the quantity supplied is
greater than the quantity demanded
31. The concept of laissez-faire means keep government out of business
32. A market structure characterized by identical products and a large
number of reasonably well-informed buyers and sellers who act
independently describes perfect competition
33. When labor and management decide to go to arbitration, both parties
are willing to accept the decision of a third party as binding
34. The theory that states that the supply and demand for workers' skills
determines their wages is the
Traditional theory of wages
35. The single most important source of revenue for the national
government is the individual income tax.
36. If one individual earns $10,000 and pays $2000 in taxes and a second
individual earns $100,000 and
pays $20,000 in taxes, the government is using a proportional tax
37. The steps in initiating and approving a federal budget occur in this
order: president, House of Representatives, Senate, president
38. The federal deficit has all of the following effects EXCEPT lower
interest rates
39. The Federal Reserve notes used as currency today are inconvertible
fiat money
40. The most recognized measure of stock performance is the Dow-Jones
Industrial Average, which
measures 30 representative stocks on the NYSE
41. Which of the following is NOT an important characteristic of the free
enterprise economy? Government intervention
42. Economics may best be defined as a (n) study of efforts to satisfy
seemingly unlimited wants with scarce resources.
43. When two corporations that produce the same kind of product merge, it
is known as a (n) horizontal merger
44. A risk-taker in search of profits is known as a (n) Entrepreneur
45. A popular model used to illustrate the concept of opportunity cost is
the production possibilities frontier
46. Increased competition, higher profits, more and better-paying jobs,
and healthy tax revenues are all benefits of successful labor unions
47. Which of the following is NOT a characteristic of the market economy?
Does not provide for everyone's basic needs
48. Land, labor, capital, and entrepreneurs are the results of supply
and demand
49. When corporations involved in different steps of manufacturing or
marketing merge, it is known as a
(n) Vertical merger
50. Public utilities are businesses that are unregulated
51. Which term best describes the consumer act of replacing one item with
another less costly item? Demand elasticity
52. In a healthy market, all of the following conditions exist EXCEPT
adequate competition exists in all markets
53. The profit-maximizing quantity of output is found where total cost
equals total revenue
54. If supply and demand are inelastic, a large change in price has
only a small affect on supply
55. A negative externality resulting from building a commuter rail system
might be an opportunity cost
56. All of the following are examples of market failure EXCEPT inferior
fabrics used in manufactured costumes
57. Costs for electricity, natural gas, and labor are examples of
variable costs
58. An example of resource immobility is a dam located at the mouth of
a river that's run dry
59. Market failure can occur when resources do not move from industry
to industry
60. The Robinson-Patman Act increased consumer protection from price
discrimination
61. The theory that wages are based on the supply and demand for a
worker's skills is the traditional theory of wages
62. The flat tax closes or minimizes most tax loopholes
63. Which of the following is not an impact of a large federal debt?
Lower interest rates
64. In 1980, before the S&L crisis got under way, the United States had
4,600 S&Ls. By the early 1990s,
there were fewer than 2,000
65. The Efficient Market Hypothesis states that stocks are priced about
right and bargains are hard to
find
66. Laborers who work primarily with their hands because they lack
training and skills are called unskilled labor
67. The long-range goal of the Omnibus Act of 1993 was to balance the
federal budget
68. The annual budget of the federal government is initiated by the
President
69. Federal deposit insurance was not available during the early years
of the Great Depression.
70. An advantage of a mutual fund for a small investor is the ability to
diversify an investment
71. The foreign sector of the economy represents the difference between
the dollar value of exports and imports
72. A condition of acute shortages, high unemployment, and excess
capacity at manufacturing facilities
is a(n) Depression
73. The committee that advises the Fed on the growth of the money supply
and the level of interest
Rates is the Federal Open Market Committee
74. The hypothetical relationship between federal tax rates and tax
revenues is demonstrated by the
Laffer curve
75. Examples of automatic stabilizers are unemployment insurance and
entitlement programs
76. The market basket is a method of tracking prices of consumer items
77. The degree of income inequality among families is demonstrated by the
Lorenz curve
78. The wealthiest 20 percent of the population controls about 75
percent of the nation's wealth
79. Tools that the Fed can use to conduct monetary policy include all of
the following EXCEPT Regulation Z
80. Fiscal policy is defined as the use of government spending and
taxing to influence economic activity.
81. Protectionists cite all of the following reasons to justify high
tariffs EXCEPT helping the balance of payments
82. Efforts to bring privatization to the Soviet Union began with
Mikhail Gorbache
83. The nation once known as the “socialist state that works” is Sweden
84. When a developing country is in the stage of semi development, its
income is growing faster than its population
85. Today, the American economy is an example of modified free enterprise
86. The most favored nation clause is important to foreign countries
because favored nations can
Benefit from U.S. trade negotiations with other countries
87. All of the following are characteristics of communism EXCEPT high
consumer satisfaction
88. One of the keys to Japan's economic success has been Keiretsu
89. When a developing country is in the stage of primitive equilibrium,
it has no formal economic organization
90. Countries that try to change from a command economy to a market
economy face all of the
following problems of transition EXCEPT the need to unionize workers
91. Five-Year Plan economic plan used by some communist nations to set
economic goals
92. Trade deficit when more goods are imported than are exported
93. Developing country country that lacks significant industrial
development and whose people have very low per capita in-comes
94. Protective tariff tax designed to protect domestic industry from
imported goods
95. Pollution poisonous and noxious substances in the air, water, or
soil
96. Infrastructure public goods, such as highways, airports, and sewer
systems, that are needed by society
97. Customs union international economic situation in which member
nations have eliminated all trade barriers
98. Population density number of people who live on a square mile of
land
99. Subsistence condition in which people produce only enough to
survive
100. Exports products one country sells to another country