Download Civics- Economics Exam

Civics- Economics Exam Study Guide
1.Among the broad purposes of the United States government spelled out in the Preamble to the Constitution is the
obligation to
provide for justice and the people's general welfare.
2.Locke, Harrington, Hobbes, and Rousseau would most likely agree that
. the state exists to serve the will of the people
.
.
3.In a democracy, the will of the majority
. cannot be used to deprive rights to a member of a minority group.
.
. .
Which idea is NOT included in the Declaration of Independence?
$
God gives certain people the right to govern.
5.Which feature did the State constitutions and the Articles of Confederation have in common?
.
principle of popular sovereignty
6.Much of the Declaration of Independence consists of
complaints of the wrongs done to the colonists.
7.Much of the work of the Framers centered around the proposals that had been set out in
the Virginia Plan.
.
8.With the words, "We the People," the Constitution establishes its authority on the basis of
a. popular sovereignty.
9.Which statement about the Bill of Rights is NOT true?
The amendments were ratified at the same time as the Constitution.
10.Which of the following best describes the concept of limited government?
Government must operate within certain bounds set by the people.
11.The basic constitutional rights of the people were FIRST set out in the
.
. Bill of Rights.
. .
12.The President's power to veto an act of Congress is an example of
checks and balances.
13.The Bill of Rights guarantees all of the following EXCEPT
the right of women to vote.
14.Each of the four methods of formal amendment
demonstrates the principle of federalism.
15.States must honor the legality of one another's civil laws because of the
Full Faith and Credit Clause.
16.Citizens who commit a crime in one State and then flee to another State to escape prosecution are to be returned to the
original State under
extradition.
17.Agreements States enter into with both foreign nations and other States with the consent of Congress are
interstate compacts.
18.Which of the following is the basic characteristic of federalism?
It divides power between a National Government and State governments.
19.In the United States, a political party is made up of a group of people who
work to get candidates elected to political offices.
20.People belong to a particular political party
voluntarily, because they made a personal choice.
21.The two-party system developed in the United States mainly because
conflicts about the Constitution created opposing viewpoints.
22.Minor parties have contributed MOST to United States politics by
causing major parties to adopt their ideas.
23.The provisions of the Voting Rights Act of 1965 and its amendments of 1970, 1975, and 1982 apply to
all national, State, and local elections.
24.The term political socialization can be defined as the
process by which people formulate their political attitudes and opinions.
25.Today many States require that all voters
be citizens of the United States and residents of the State.
26.Which of the following is the earliest and one of the most significant agents in the political socialization process?
family
27.Polls are taken to
determine people's attitudes and viewpoints.
.
28.The impact of the mass media on the public agenda can best be described as its ability to
focus the public's attention on specific issues.
29.What would be your BEST advice to a person who wants to learn more about political issues?
Explore a variety of sources of political information.
30.In the family, young children are likely to acquire
some basic attitudes that will most likely affect their future opinions.
31.An interest group tries to persuade people to
respond to its members' shared attitudes.
32.All of the following are propaganda techniques EXCEPT
supporting a government policy change.
33.Most interest groups are formed on the basis of
economic interests.
34.Interest groups know that public opinion is important because
no policy will stay in place very long without public support.
35.Which of the following basic concepts of government did the Magna Carta reflect?
limited government
36.The resources used to make all goods and services are the
factors of production.
37.What is the opportunity cost of a decision?
the most desirable alternative given up for the decision
38.The lack of which of the following represents a scarcity?
enough workers to finish two jobs because there’s a limited supply of workers
39.Which of the following is an example of scarcity, rather than shortage?
A person wants an endless supply of everything but cannot have it.
40.The government's role in a mixed economy is that it is the
regulator charged with preserving competition.
41.
This cartoonist would like government to
interfere with business less.
42.
Where would the U.S. economy be located in the diagram, in W, X, Y, or Z?
.
X
43.
According to the illustration, what is the least common form of business organization in the United
States?
partnerships
____ 44.
Which letter represents the proper location on the diagram for “unlimited liability”?
W
____ 45.
Which letter represents the proper location on the diagram for “owners earn dividends”?
Y
____ 46. An increase in the price of milk causes a decrease in the demand for cereal. The two products are
complements.
____ 47. Because a modest price increase has little or no effect, the demand for the product is
inelastic.
____ 48. Consumers' willingness to replace a costly item with a less costly item is an example of
the substitution effect.
____ 49.
Demand Schedule for CDs
Price per CD
$10
$12
$14
$16
$18
$20
Quantity Demanded
(in millions)
1,100
900
700
500
300
100
If you were to graph this demand schedule, the demand curve would
slope downward from left to right.
____ 50.
According to this demand curve, how many movie videos will be demanded at a price of $10?
1000
____ 51.
According to this demand curve, if the price of movie videos increases from $14 to $16, the quantity
demanded will
fall from 600 to 400.
____ 52.
Which of the following choices could cause the movement shown in this graph?
a decrease in income.
____ 53.
Based on this graph, how many Beanie Babies™ were demanded at a price of $6 before they became a
fad?
200
.
____ 54.
Which of the following choices could cause the movement shown in this graph?
a decrease in the price of cameras
____ 55.
On Curve A in the graph, suppose the price dropped from $10 to $7. Would quantity demanded increase
or decrease and by how much?
Quantity demanded would increase by 1 unit.
____ 56.
What does the movement shown on this graph represent?
the inverse relationship between price and quantity demanded
____ 57. All of the following can change the market supply curve EXCEPT
a change in the demand for the product.
____ 58. The level of profit-maximizing output is reached when marginal cost is
equal to marginal revenue.
____ 59.
Supply Schedule for CDs
Price per CD
$10
$12
$14
$16
$18
$20
Quantity supplied
(in millions)
100
300
500
700
900
1,100
If you were to graph this supply schedule, the supply curve would
. slope upward from left to right.
____ 60.
____ 61.
According to this supply curve, 400 movie videos will be supplied at what price?
$
$12
According to this supply curve, if the price of movie videos decreases from $18 to $16, the quantity
supplied will
fall from 1000 to 800.
____ 62.
Which of the following choices could cause the movement shown in the graph?
taxes increase
____ 63.
The movement shown in this graph represents a change in what?
a. supply
____ 64.
What does the movement shown on this graph represent?
a change in quantity supplied
____ 65.
According to the supply curves, at a price of $25, how many more soccer balls would ABC Corp.
supply than would XYZ Corp.?
3 more
____ 66.
Assume that ABC Corp. and XYZ Corp. are the only two firms that supply soccer balls. Based on the
graphs, what would be the market quantity of soccer balls supplied at a price of $20?
9
____ 67. At a given price, a surplus occurs when
the quantity supplied is greater than the quantity demanded.
____ 68. If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary
shortage will occur and the price will increase.
____ 69.
Suppose the demand curve shifts from D1 to D2, as shown on the graph. How do the quantity supplied
and quantity demanded change at the new equilibrium price?
Both quantity supplied and quantity demanded increase.
____ 70.
Market Demand and Supply Schedules
Price
$20
18
16
14
12
10
Quantity
Demanded
0
2
4
7
11
13
Quantity
Supplied
20
16
10
7
5
0
Surplus/
Shortage
20
14
6
0
?
–13
In the table, market equilibrium will occur at what price?
$14
____ 71.
On the graph, suppose that demand for gold stands at D1D1. Then the opening of a new gold mine shifts
the supply curve from S1S1 to S2S2. How does this shift affect price?
b. price declines from 400 to 280
____ 72. Under perfect competition,
no seller sells a product above the prevailing market price.
.
____ 73.
What letter on the graph represents the proper location for the market structure “oligopoly”?
Y
____ 74.
What letter on the graph represents the proper location for the market structure “monopoly”?
Z
____ 75. The invisible barrier that hinders women and minorities from advancement up the corporate ladder
is known as the glass ceiling.
____ 76.
According to the graph, union membership grew by the largest percentage in which 5-year period?
1935 to 1940
____ 77.
The union representing flight attendants at American Airlines rejected an offer of arbitration
from federal mediators yesterday, assuring the start of a 30-day cooling-off period after
which its members will be legally free to strike.
The major issue dividing the two sides is pay. The flight attendants now earn $15,000 to
$35,000 a year, the union said. American said that the union’s last proposal would cost the
airline $570 million more over six years than its final offer. The union said that the gap was
closer to $200 million.
Source: The New York Times, May 31, 2001.
If the union in the passage had accepted the offer of arbitration, how would this affect the outcome of
negotiations?
Both sides would have to accept the arbitrator’s decision.
____ 78. The FDIC was established to
protect the savings of the American people.
____ 79. In order for money to have value, it must have all of the following characteristics EXCEPT
Plenty availability.
.
____ 80.
Why is the father ant in the cartoon having more trouble than others in the colony buying what he
wants?
The colony has no monetary system.
____ 81.
Money is burning a hole in consumers’ pockets. Again last month, U.S. wage earners spent
nearly as much as they made, contributing to record low savings. But consumers have good
reason to be out there spending. They’ve got jobs, their incomes are rising, confidence is
high, and the stock market is booming. This trend dragged down the savings rate—savings as
a percentage of after-tax income—to a record low.
Source: The Columbus Dispatch, May 29, 1999.
This passage suggests that the low savings rate is due to
the booming economy.
This table shows the balance in an account if monthly deposits of $10 were compounded monthly.
Annual
Value at end of:
Interest
0%
2%
4%
6%
____ 82.
5 years
$600
$630
$663
$698
10 years
$1,200
$1,327
$1,472
$1,639
15 years
$1,800
$2,097
$2,461
$2,908
20 years
$2,000
$2,948
$3,668
$4,620
Suppose you deposited $10 into your savings account each month, as indicated in the table. Your
account pays 4%, compounded monthly. How much will you have in your account at the end of 15 years?
$2,461
____ 83.
Suppose you plan to save $10 each month, as indicated in the table. You can either deposit it into a
savings account at 6% interest or you can put it under your mattress for safekeeping. How much more money
will you have at the end of 5 years if you choose the savings account instead of your mattress?
.
$98
.
____ 84. An index that reports on price changes for about 90,000 goods and services is the
consumer price index.
____ 85. The largest sector of the macroeconomy is the
consumer sector.
____ 86.
A U.S. business buys new computers for its office workers from a U.S. computer manufacturer. The
value of transaction would be included in which category in the graph?
investment sector
Per Capita GDP
Luxembourg
United States
Switzerland
Japan
Iceland
____ 87.
____ 88.
$33,609
$33,586
$27,126
$23,311
$23,230
Economists use numbers such as those in the table as a measure of
standard of living.
The numbers in this table were calculated by
dividing GDP by total population.
____ 89.
For the time span shown on the graph, how many years did the world’s real GDP grow at 2% or less?
4 years
____ 90. Unemployment that is directly related to swings in the business cycle is
cyclical unemployment.
____ 91. According to the cost-push theory, inflation is caused by
workers.
____ 92. Changes in technology and changes in consumer tastes can cause
structural unemployment.
____ 93. According to the demand-pull theory, inflation is caused by
consumers.
____ 94.
Which letter on the graph represents a recession in the business cycle?
.
X
.
____ 95.
Which letter on the graph represents a trough in the business cycle?
Y
____ 96. In the short run, an increase in the money supply results in
lower interest rates.
Reserve Requirements
Bank Deposits
$2,000,000
$2,000,000
$2,000,000
____ 97.
Required Reserve
%
5%
10%
15%
$ Amount of
Required Reserve
P
R
T
$ Amount Bank
May Loan
Q
S
U
What dollar amount should appear in place of the letter P in the table?
$100,000
____ 98.
What dollar amount should appear in place of the letter S in the table?
$1,800,000
Federal Reserve Easy Money Policy
____ 99. Which of the following results should be included where the question mark appears in the illustration?
inflation
____ 100.
Federal Reserve Tight Money Policy
Which of the following results should be included where the question mark appears in the illustration?
unemployment
Short Answer Questions:
1. Use the concept of supply and demand to explain why professional athletes and actors make more
money than teachers, police, or firemen.
2. Explain the role of the government in American capitalism. What things are provided by our
government that a totally free market system would not provide for?