Download ECONOMICS PRE-TEST Matching: 1. Products where the use of

ECONOMICS PRE-TEST
Matching:
1.
2.
3.
4.
5.
Products where the use of one will increase the use of another
Effect that an economic activity has on a third party
Land, labor and capital
Goods shipped to other countries
Allows consumers to buy now for a good and pay later
6. Amount of money originally borrowed
7. Fee paid to use someone else’s money
8. Portion of corporation’s profit paid to stockholders
9. Retirement plan
10. Certificate issued by a corporation/government in exchange
for borrowed money
11. Must be paid before insurance pays any money
12. This paid for the cost of insurance
13. Individual insurance agreement
14. Decline in value or time
15. Period of time when certificates of deposits end
A.
B.
C.
D.
E.
Externality
Exports
Factors of Production
Complements
Credit
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
Policy
Bond
Maturity
Principal
Dividend
Premium
Depreciation
Deductibles
Interest
Pension
16. Tax that takes larger percentage of lower incomes
A. Progressive
17. Tax that takes the same percentage of all incomes
B. Regressive
18. Tax that takes larger percentage of higher incomes
C. Proportional
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19. All the activity in a nation that together affects the
production, distribution, and use of goods and services
A. Surplus
20. How consumers response to price change
B. Floor
21. Condition in which people do not have enough resources
C. Scarcity
to satisfy every desire
D. Opportunity Cost
22. Sacrificing one good or service to purchase or produce another
E Market
23. Maximum price that can be charged
F Elasticity
24. Greater amount supplied than demanded
G. Ceiling
25. Amount of goods and services produced for the marketplace
H. Supply
26. Place where a buyer and seller meet
I. Economy
27. Lowest legal price
MULTIPLE CHOICE:
28. Money that is left after taxes have been paid and necessities purchased is called A) gross wages
B) disposable income C) consumable income D) taxable income E) discretionary income
29. Owners of preferred stock receive A) fixed dividend B) variable dividend
D) interest payments E) a lump sum payment at the maturity date
C) market-based dividend
30. Which of the following products would most likely be inelastic A) blouses B) CD’s C) snack food
D) telephone service E) romantic novels
31. The point at which the quantity demanded equals the quantity supplied is called the A) elasticity
measure B) equilibrium price C) surplus D) shortage E) price floor
32. Economists keep track of inflation by calculating the A) lagging indicators B) net domestic product
C) gross domestic product D) consumer price index E) reserve requirements
33. When the Federal Reserve wants to increase the money supply it A) buys government securities
B) sells government securities C) raises the Federal funds rate D) prints money E) none of these
34. Under a fractional reserve banking system, A) all banks must keep their deposits with the FED
B) national banks must keep their deposits with the FED C) banks that belong to the Federal Reserve
System must keep some of their deposits on hand at the bank D) banks must pay a fraction of their
profits as interest to depositors E) all banks must keep at least half of the deposits with the FDIC to
insure against bankruptcy
35. Gross domestic product constitutes A) the current market value of all goods and services produced in a
given year B) the total spending in an economy C) the current market value of all final goods and
services produced in a given year within a country’s borders D) the total quantitative output in an
economy. E) the total monetary transactions in an economy
36. After passing through a trough, the business cycle enters a period of A) recession B) expansion
C) depression D) peak E) none of these
37. Economics is primarily concerned with A) the ways people use resources B) consumer prices
C) the future cost of goods D) elasticity of prices E) trade-offs
38. The economy of the United States is an example of a market system called A) democracy
B) import based C) command D) communism E) capitalism
39. If the reserve requirement is 25 percent A) banks can lend 25 percent of their deposits B) The FED
has set a tax rate of 25 percent C) banks must change 25 percent interest on overnight funds lent to
other financial institutions D) banks must keep 25 percent of their deposits on hand E) the FED takes
25 percent of the banks funds and the bank keeps bank 25 percent for withdraws
40. The production possibilities curve describes A) all of the combination goods and services that can be
produced by an economy B) the costs of various goods and services that the economy can produce
C) the benefits of various goods and services that the economy can produce D) most efficient
way to produce all goods and service E) which good has an advantage over another
41. Compared to stocks, bonds are a safer investment because A) they offer a higher rate of return
B) dividends are calculated on the mature value C) interest on stocks must always be paid D) they
get paid more than stockholders E) interest on bonds must always be paid
42. Which of the following correctly describes the reason why banks are able to create new
money? A) the federal government requires banks to hold all deposits on reserve as vault cash
in case depositors ask for their money back B) banks keep all their deposits in special interestbearing accounts at the Federal Reserve Bank C) banks can loan out all but a small fraction of
its own assets, but most hold all money deposited at the bank on reserve in bank vault D) banks
can loan out all but a fraction of the money deposited at the bank, with the remainder held as
reserve in case some depositors come to get their money
43. Interest rates on certificates of deposit depend on A) the number of checks written off the account
B) the minimum balance C) the previous interest rates D) the length of time it takes to mature
E) the amount set by the federal governmenT
44. Which of the following is NOT a transfer payment A) Medicare B) social security C) spending on
free school lunch program D) spending on stocks and bonds E) unemployment
45. A laissez-faire system is one in which A) government interference in the economy is minimal B) the
government controls the factors of production C) the government make decisions for businesses
D) government purchases goods and services from consumers E) the government is involved with
every aspect of the economy
46. If the price of an item is too low, the market will show a(n) A) surplus B) shortage C) equilibrium
D) supply curve E) ceiling
47. At higher prices, A) suppliers will increase what they produce B) demand will increase
C) suppliers will decrease what they are producing D) suppliers will maintain current production
48. The amount of return on investments are usually related to what A) amount of money have to invest
B) time money is left on deposit C) degree of risk one takes D) the amount you invest E) how old you
are at the time of the investment
49. Most depositors have accounts insured up to A) 2,000,000
B) 250,000
C) 150,000
D) 10,5,00
50. Using resources wisely so that people are better off economically is referred to as A) economic
growth B) opportunity cost C) economic efficiency D) standard of living E) trade-off