Download Civics- Economics Study Guide

Civics- Economics Study Guide
1.At a given price, a surplus occurs when
a. the quantity supplied is greater than the quantity demanded.
b. the quantity demanded is more than the quantity supplied.
c. the quantity demanded is the same as the quantity supplied.
d. the quantity supplied is less than the quantity demanded.
2.
According to the illustration, what is the least common form of business organization in the United
States?
a. corporations
c. partnerships
b. proprietorships
d. joint ventures
3.
The movement shown in this graph represents a change in what?
a. quantity supplied
c. supply
b. supply elasticity
4.
d. production function
Which of the following choices could cause the movement shown in the graph?
a. inputs become cheaper
c. taxes increase
b. technology improves production
d. the number of firms increases
MAIN IDEAS
5.Each of the four methods of formal amendment
a. involves unwritten changes in the interpretation of the Constitution.
b. can proceed only with the approval of the President.
c. demonstrates the principle of federalism.
d. is undertaken jointly by the executive, legislative, and judicial branches.
6.In a democracy, the will of the majority
a. rarely leads to satisfactory policy decisions.
b. is not open to compromise.
c. cannot be changed or improved upon.
d. cannot be used to deprive rights to a member of a minority group.
7.The term political socialization can be defined as the
a. belief that one's vote does not count.
b. practice of voting for candidates of only one specific party in any given election.
c. process by which people formulate their political attitudes and opinions.
d. process in which individual initiative is abandoned in favor of party politics.
8.The Bill of Rights guarantees all of the following EXCEPT
a. the right of women to vote.
b. fair treatment before the law.
c. freedom of belief.
d. freedom of expression.
9.Among the broad purposes of the United States government spelled out in the Preamble to the Constitution is the
obligation to
a. keep the executive and legislative branches of government separate.
b. defend the country against Americans who oppose its policies.
c. create an autocratic form of government.
d. provide for justice and the people's general welfare.
10.States must honor the legality of one another's civil laws because of the
a. Full Faith and Credit Clause.
b. Necessary and Proper Clause.
c. Supremacy Clause.
d. Interstate Compacts Clause.
11.Which of the following is the basic characteristic of federalism?
a. It encourages citizen participation in government.
b. It gives most power to the National Government.
c. It gives most power to local units of government.
d. It divides power between a National Government and State governments.
12.An interest group tries to persuade people to
a. nominate certain members for public office.
b. find ways to cooperate privately.
c. join a political party.
d. respond to its members' shared attitudes.
13.The impact of the mass media on the public agenda can best be described as its ability to
a. focus the public's attention on specific issues.
b. tell people what opinions to have about those issues.
c. focus the public's attention on how to vote.
d. tell people whom to vote for.
14.People belong to a particular political party
a. according to regulations of federal law.
b. according to regulations of State law.
c. voluntarily, because they made a personal choice.
d. based on the location of the State in which they live.
15.Which idea is NOT included in the Declaration of Independence?
a. God gives certain people the right to govern.
b. People have certain natural rights.
c. Government can exist only with the people's permission.
d. The people may change or abolish the government.
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
a. extradition.
b. the Privileges and Immunities Clause.
c. the Full Faith and Credit Clause.
d. any interstate compact involving all 50 States.
17.Which statement about the Bill of Rights is NOT true?
a. The amendments were ratified at the same time as the Constitution.
b. The amendments guarantee such basic rights as freedom of expression and fair and equal
treatment before the law.
c. The amendments are the first ten of the Constitution.
d. The amendments arose from the controversy over ratification of the Constitution.
18.All of the following are propaganda techniques EXCEPT
a. using glittering generalities.
b. the bandwagon approach.
c. supporting a government policy change.
d. presenting only one side of an issue.
19.The two-party system developed in the United States mainly because
a. conflicts about the Constitution created opposing viewpoints.
b. leaders and voters agreed on the existence of two parties.
c. it was voted on and approved by both houses of Congress.
d. the Constitution established a democratic government.
20.Polls are taken to
a. guarantee the constitutional rights of all people.
b. further the political socialization of individuals.
c. provide a system of checks and balances.
d. determine people's attitudes and viewpoints.
21.Interest groups know that public opinion is important because
a. no policy will stay in place very long without public support.
b. laws cannot be passed in opposition of public opinion.
c. no group can provide enough information to alter public opinion.
d. a candidate cannot gain office without full public support.
22.Today many States require that all voters
a. meet specific literacy requirements.
b. be citizens of the United States and residents of the State.
c. be natural-born citizens of the United States.
d. be familiar with the candidates and issues before voting.
23.Agreements States enter into with both foreign nations and other States with the consent of Congress are
a. extraditions.
b. enabling acts.
c. acts of admission.
d. interstate compacts.
24.Which feature did the State constitutions and the Articles of Confederation have in common?
a. a strong executive elected by popular vote
b. principle of popular sovereignty
c. royal governors
d. bill of rights
25.With the words, "We the People," the Constitution establishes its authority on the basis of
a. the rule of law.
b. the separation of powers.
c. limited government.
d. popular sovereignty.
26. Which of the following is the earliest and one of the most significant agents in the political socialization
process?
a. place of residence
b. group affiliation
c. family
d. gender
27.Most interest groups are formed on the basis of
a. geographic interests.
b. the interests of all citizens.
c. economic interests.
d. religious interests.
28.Which of the following best describes the concept of limited government?
a. All political power belongs to the people.
b. The people must behave according to rules set by the government.
c. Powers are divided among three independent branches of government.
d. Government must operate within certain bounds set by the people.
29.Much of the work of the Framers centered around the proposals that had been set out in
a. the Virginia Plan.
b. the New Jersey Plan.
c. the Declaration of Independence.
d. The Federalist.
30.Much of the Declaration of Independence consists of
a. complaints of the wrongs done to the colonists.
b. statements of the desire to separate from England.
c. lists of the rights of all people.
d. threats of revenge for English mistreatment.
31.The President's power to veto an act of Congress is an example of
a. checks and balances.
b. executive agreement.
c. judicial review.
d. limited government.
32.The basic constitutional rights of the people were FIRST set out in the
a. Equal Rights Amendment.
b. 10th Amendment.
c. 13th, 14th, and 15th amendments.
d. Bill of Rights.
33.Locke, Harrington, Hobbes, and Rousseau would most likely agree that
a. the state exists to serve the will of the people.
b. the state developed out of force.
c. those of royal birth should rule the state.
d. government should be eliminated.
34.
Which letter on the graph represents a recession in the business cycle?
a. Z
c. X
b. W
d. Y
35.
Which letter on the graph represents a trough in the business cycle?
a. Z
c. X
b. Y
d. W
Federal Reserve Easy Money Policy
36. Which of the following results should be included where the question mark appears in the illustration?
a. the reserve requirement
c. unemployment
b. interest rates
d. inflation
37.An increase in the price of milk causes a decrease in the demand for cereal. The two products are
a. demand elastic.
c. substitutes.
b. complements.
d. unrelated.
38.
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?
a. $14
c. $10
b. $20
d. $16
39.
What does the movement shown on this graph represent?
a. the inverse relationship between price and quantity demanded
b. a change in demand
c. the inverse relationship between price and marginal utility
d. diminishing marginal utility
40.The resources used to make all goods and services are the
a. production possibilities.
c. production trade-offs.
b. opportunity costs.
d. factors of production.
41.
a.
b.
c.
d.
42.
Which of the following choices could cause the movement shown in this graph?
a decrease in the price of a complement
a decrease in income.
an increase in the price of a substitute
an increase in population
According to this demand curve, if the price of movie videos increases from $14 to $16, the quantity demanded
will
a. rise from 400 to 600.
c. fall from 600 to 400.
b. fall from 400 to 200.
d. rise from 200 to 400.
43.
According to this demand curve, how many movie videos will be demanded at a price of $10?
a. 800
c. 600
b. 400
d. 1000
What letter on the graph represents the proper location for the market structure “oligopoly”?
a. Y
c. W
b. X
d. Z
45.What is the opportunity cost of a decision?
a. the most desirable alternative given up for the decision
b. the different ways that a different person might have made the decision
c. the series of alternative decisions that could have been made
d. the best possible way the question could have been decided
46.
Federal Reserve Tight Money Policy
44.
Which of the following results should be included where the question mark appears in the illustration?
a. production
c. inflation
b. consumer spending
d. unemployment
47.In order for money to have value, it must have all of the following characteristics EXCEPT
a. divisibility.
c. durability.
b. portability.
d. plentiful availability.
48.
What does the movement shown on this graph represent?
a. a change in supply
b. a shift in the market supply curve
c. the law of diminishing returns
d. a change in quantity supplied
49.Changes in technology and changes in consumer tastes can cause
a. cyclical unemployment.
c. frictional unemployment.
b. structural unemployment.
d. seasonal unemployment.
50.
According to the supply curves, at a price of $25, how many more soccer balls would ABC Corp. supply than
would XYZ Corp.?
a. 11 more
c. 3 more
b. 7 more
d. 2 more
51.
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?
a. 9
c. 10
b. 6
d. 3
Reserve Requirements
Bank Deposits
$2,000,000
$2,000,000
$2,000,000
52.
53.
Required Reserve
%
5%
10%
15%
$ Amount of
Required Reserve
P
R
T
What dollar amount should appear in place of the letter S in the table?
a. $200,000
c. $1,800,000
b. $180,000
d. $2,200,000
What dollar amount should appear in place of the letter P in the table?
a. $1,000,000
c. $100,000
b. $1,900,000
d. $190,000
54.The FDIC was established to
a. create a government banking monopoly.
b. help with the financing of World War II.
c. federalize the banking system.
d. protect the savings of the American people.
55.Under perfect competition,
a. numerous restrictions prevent firms from entering the market.
b. no seller sells a product above the prevailing market price.
c. a single seller can affect price.
d. products are similar but not identical.
$ Amount Bank
May Loan
Q
S
U
56.
According to this supply curve, if the price of movie videos decreases from $18 to $16, the quantity supplied will
a. fall from 1000 to 800.
c. rise from 800 to 1000.
b. fall from 800 to 600.
d. rise from 600 to 800.
57.
According to this supply curve, 400 movie videos will be supplied at what price?
a. $10
c. $12
b. $14
d. $16
Per Capita GDP
Luxembourg
United States
Switzerland
Japan
Iceland
58.
59.
$33,609
$33,586
$27,126
$23,311
$23,230
The numbers in this table were calculated by
a. dividing GDP by total population.
b. multiplying GDP by total population.
c. subtracting net exports from GDP.
d. adding the dollar value of all final goods and services produced in the nation.
Economists use numbers such as those in the table as a measure of
a. net exports.
b. national income.
c. standard of living.
d. total dollar value of all final goods and services.
60.The largest sector of the macroeconomy is the
a. government sector.
c. foreign sector.
b. consumer sector.
d. investment sector.
61.
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?
a. Both quantity supplied and quantity demanded increase.
b. Quantity supplied increases and quantity demanded decreases.
c. Quantity supplied decreases and quantity demanded increases.
d. Both quantity supplied and quantity demanded decrease.
This table shows the balance in an account if monthly deposits of $10 were compounded monthly.
Annual
Interest
0%
2%
4%
6%
62.
Value at end of:
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 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?
a. $698
c. $600
b. $439
d. $98
63.
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?
a. government sector
c. investment sector
b. net exports
d. consumer sector
64.
Based on this graph, how many Beanie Babies™ were demanded at a price of $6 before they became a
fad?
a. 100
c. 200
b. 400
d. 300
65.Consumers' willingness to replace a costly item with a less costly item is an example of
a. complements.
c. the income effect.
b. demand elasticity.
d. the substitution effect.
66.
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?
a. price declines from 850 to 400
c. price declines from 400 to 280
b. price rises from 280 to 400
d. price rises from 400 to 850
67.
On Curve A in the graph, suppose the price dropped from $10 to $7. Would quantity demanded increase
or decrease and by how much?
a.
b.
c.
d.
Quantity demanded would decrease by 1 unit.
Quantity demanded would increase by 5 units.
Quantity demanded would decrease by 5 units.
Quantity demanded would increase by 1 unit.
68.
Why is the father ant in the cartoon having more trouble than others in the colony buying what he
wants?
a. Skate keys are not useful to others.
b. He is pricing his skate keys too high.
c. He does not have a loaf of bread.
d. The colony has no monetary system.
69.If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary
a. surplus will occur and the price will fall.
b. surplus will occur and the price will increase.
c. shortage will occur and the price will fall.
d. shortage will occur and the price will increase.
70.
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
a. be horizontal.
b. slope upward from left to right.
c. slope downward from left to right.
d. be vertical.
71.According to the demand-pull theory, inflation is caused by
a. producers.
c. workers.
b. consumers.
d. government.
72.Unemployment that is directly related to swings in the business cycle is
a. cyclical unemployment.
c. structural unemployment.
b. frictional unemployment.
d. seasonal unemployment.
73.Which of the following basic concepts of government did the Magna Carta reflect?
a. worth of the individual
b. representative government
c. ordered government
d. limited government
74.The lack of which of the following represents a scarcity?
a. grapefruit juice because very few people want to buy it
b. orange juice because the trucks carrying it are on strike
c. enough workers to work at night because the pay is too low
d. enough workers to finish two jobs because there’s a limited supply of workers
75.All of the following can change the market supply curve EXCEPT
a. the numbers of sellers offering the product.
b. the expectation that prices are about to increase.
c. a change in the demand for the product.
d. the cost of labor.
76.In the short run, an increase in the money supply results in
a. economic expansion.
c. lower interest rates.
b. higher interest rates.
d. increased consumer spending.
77.
Which of the following choices could cause the movement shown in this graph?
a. a decrease in the price of cameras
c. an increase in the price of cameras
b. a decrease in the price of film
d. an increase in the price of film
78.According to the cost-push theory, inflation is caused by
a. government.
c. consumers.
b. producers.
d. workers.
79.Because a modest price increase has little or no effect, the demand for the product is
a. unit elastic.
c. inelastic.
b. complementary.
d. elastic.
80.
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
a. be vertical.
c. be horizontal.
b. slope upward from left to right.
d. slope downward from left to right.
Essay Questions ( Each worth 10 pts )
1. In a 3 paragraph essay answer the following:
a. Explain the relationship or roles between consumers and producers in a capitalistic economy. ( how do they
set prices, determine which goods to produce, etc)
b. Explain the role of the government in a capitalistic economy.
c. Explain how the consumer and producer benefit from government in a capitalistic economy.
2. In a 3 paragraph essay answer the following: Winston Churchill once said “ democracy is the worst form of
government, except for all others that have been tried”. Evaluate what he meant and describe the strengths and
weaknesses of our form of government. What would you change to make it better and why?