Download Government and the Economy

NAME __________________________________ Date _____________________ Class _______________
Government and the Economy
DIRECTIONS: Matching Match each item in Column A with an item in Column B. Write
the correct letters in the blanks. (3 points each)
Column A
Column B
____ 1. consumption by one person prevents consumption by others
A. business cycle
____ 2. can be consumed by one person without preventing
consumption by others
B. merger
____ 3. unintended consequence affecting uninvolved parties
C. public goods
____ 4. forming a single business by combining two or more
companies
D. recession
E. unemployment rate
____ 5. popular measure of the price level
F. externality
____ 6. alternating periods of economic growth and decline
G. WIC
____ 7. when real GDP decreases for six consecutive months
H. consumer price index
____ 8. provides help with nutrition and health care to lowincome
women, infants, and children
I.
____ 9. tax rate that increases according to income level
J. progressive income tax
____ 10. percentage of civilian labor force who are not working but
are looking for jobs
private goods
DIRECTIONS: Multiple Choice Choose the item that best completes each sentence or
answers each question. Write the letter of the item in the blank to the left of the
sentence. (4 points each)
____ 11. The __________ principle means that a person is prevented from consuming private goods
unless he or she pays for them.
A. nonexclusion
C. exclusion
B. private goods
D. consumption
____ 12. According to the __________ principle, no one is excluded from consuming the benefits of a
public good whether or not he or she pays.
A. public goods
C. consumption
B. exclusion
D. nonexclusion
____ 13. __________ laws are designed to control monopoly power and to preserve and promote
competition.
A. Externality
C. Natural monopoly
B. Antitrust
D. Merger
____ 14. A __________ occurs when the costs of production are minimized by having one firm
produce the product.
A. merger
C. recession
B. peak
D. natural monopoly
____ 15. The __________ shows an economy's production after the distortions of price increases
have been removed.
A. real GDP
C. peak
B. business cycle
D. consumer price index
____ 16. An economic __________ occurs when real GDP goes up.
A. recession
C. expansion
B. peak
D. business cycle
____ 17. What is a sustained increase in the general level of prices?
A. inflation
C. expansion
B. recession
D. consumer price index
____ 18. __________ requires welfare recipients to exchange some of their labor to get benefits.
A. TANF
C. WIC
B. Workfare
D. SSI
____ 19. Which program gives payments to blind or disabled people and to persons age 65 and
older?
A. TANF
B. WIC
C. EITC
D. SSI
____ 20. Which term describes the highest point in an economic expansion?
A. real GDP
C. inflation
B. peak
D. CPI
DIRECTIONS: Graphics and Document-Based Questions Choose the item that best
completes each sentence or answers each question. Write the letter of the item in the
blank to the left of the sentence. (5 points each)
____ 23. Due to a power failure, a paint company mistakenly releases large amounts of a toxic
substance into a nearby river. Which of the government agencies listed below would be called in to
investigate?
A. Consumer Product Safety Commission
B. Environmental Protection Agency.
C. Federal Communications Commission
D. Occupational Health and Safety Administration
____ 24. The first frame of the cartoon suggests that the recording industry believes it has eliminated
Internet sharing of songs. What does the second frame suggest?
A. that keyboards have been changed by Napster
B. that computers are being destroyed
C. that alternate song-sharing sites are opening
D. that Napster has a new name
____ 25. During the year 2002, an annual income of $10,000.00 would be above the poverty level for
a family of
A. 1.
B. 2.
C. 3.
D. 4.