Download ECONOMICS 2301/2302

ECONOMICS PRETEST
(No grade taken- merely for your
self-assessment)
WHAT IS ECONOMICS?
DEFINITION?
Which is always present in an
economic system?
• (a) central planning
• (b) strikes
(c) scarce resources
(d) market decision-making
Which of the following taxes is
mostly based on the ability to
pay?
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A) property tax
B)sales tax
C) social security tax
D) income tax
Caveat emptor means:
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A) the public’s right to obtain land
B) let the buyer beware
C) citizen’s right to own property
D) noninterference by government
E) special concessions to business
Who controls the money in
circulation?
• A) Treasury
• B) Federal Deposit of Insurance
Corporation
• C) Federal Reserve
• D) Banks
An underdeveloped country is
basically
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A) industrial in nature
B) receiving a favorable balance of trade
C) automated
D) agrarian in nature
The total value of goods and
services produced in a given
year is called:
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A) national income
B) national wealth
C) consumer debt
D) gross domestic product
Federal government expenditures
in the market are the greatest in
which of the following areas?
• A) defense
• B) debt
• C) welfare
d) foreign aid
Supply and demand in the
market determine
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A) utility
B) cost
C)production
D) price
Name the three basic economic
systems in the world.
• A)_____________
• B)_____________
• C)_____________
The opportunity cost of a new
public high school is the:
• A) money cost of hiring teachers for the
new school
• B) cost of constructing the new school at
a later date
• C) change in the annual tax rate to pay
for the new school
• D)other goods and services that must be
given up to build the new school
Assuming little or no government
interference in the market, which of
the following is the lifeblood
(internal engine) of the market?
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A) competition
B) price
C) stock market
D) regulation
Which government agency
regulates antitrust formations?
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A) Supreme Court
B) Congress
C) Federal Trade Commission
D) State Courts
FICA which is reported in your
paycheck stands for what
deduction?
• _____________________________
• Federal Income Compensation Act.. (also called
payroll taxes)
FICA taxes are paid into the Old Age Survivors and
Disability (OASDI) and Medicare trust accounts.
For 2007, you pay 6.2% of your first $97,500
income to OASDI. Your employer also pays out of
its pocket the same percentage. This results in a
combined contribution equal to 12.4% of the
amount of your income. If you are self-employed,
you contribute 12.4% of your own income.
What is monetary policy?
• _________________________
What is fiscal policy?
• ___________________________
What does CPI measure and
what does the acronym stand
for?
• __________________________
Name the three basic factors of
production
• A________________
• B________________
• C_________________
One example of a capital good
would be:
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A) bank deposits
B) roofing machine
C) coal
D) ink
Of the following, which is the
most general cause of low
individual incomes in the U.S.?
• A) lack of valuable productive services to
sell
• B) discrimination against nonunion
workers
• C) unwillingness to work
• D) progressive tax rates
To promote economic growth, a
country must:
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A) increase investment
B) Increase consumption
C) Use the market system
D) Use central economic planning
A government budget deficit
exists when:
• A) government spending exceeds tax
revenues
• B) government spending is increased
• C) the national debt is decreasing
• D) taxes are reduced
Ceteris paribus means:
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A) who cares
B) the money is inflated
C) all other things being equal
D) the money should be equally
distributed
Who wrote the Wealth of
Nations?
• _________________________
What type of business
formation is the most common
in the U.S.?
• _________________________
What constitutes a favorable
balance of trade?
• __________________________
• Do we have one now?
Which security pays interest?
• A)stock
• B) bond
Name the four market models
in the U.S.
• A)________________
• B)________________
• C)________________
• D)________________
How does the First Amendment
begin?
• _____________________________
• Why is that important to know?
Name your Five Civil Liberties
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A)__________________
B)__________________
C)__________________
D)__________________
E)__________________
What three questions does every
economy ask?
• A)_________________
• B)_________________
• C)_________________
What is the motivating force of a
free enterprise economy?
• ____________________________
What does the acronym GDP
stand for?
What are the component parts of
GDP?
With time, a decrease in the dollar
price of foreign currency would cause
(i.e. dollar is depreciated.)
a. The nation’s imports to increase and
the exports to decrease.
b. The nation’s exports to increase and the
imports to decrease.
c. Both the imports and exports to
decrease
d. Both the imports and exports to
increase
What are the two evils of every
economy?
WELCOME TO “ECON 101”
DOES ANY OF THIS STUFF
AFFECT YOU?
“There can be no real freedom in the
presence of economic insecurity.”
Chester Bowles