Download CRCTEcon Review Practice

1. In the late 1700s the British
government used the colony of
Australia as:
A. a location in which to build new
factories.
B. a prison to which criminals could
be sent.
C. a military base to replace the
African colonies.
D. a source of resources like coal
and iron.
2. A market economy is very different from
a command economy. Which of the
following is found in a market economy?
A. competition
B. guaranteed yearly pay raises
C. government control of industry
D. government control of agriculture
3. Which of following best describes a
market economy?
A. A person can start any legal business
and charge any price.
B. The government provides food and
housing to all workers.
C. The government provides services,
such as telephones and television.
D. National businesses, such as airlines,
are owned by the government.
4. Use the information in the box below to answer
this question.
In order to produce a good or a service, four
factors of production are needed—natural
resources (land), human resources (labor), capital
resources (buildings and machinery), and
entrepreneurship (organization).
A sixth-grade class decides to open a popcorn
stand. The stand and the popcorn popper are
examples of which factor of production?
A. natural resources
B. human resources
C. capital resources
D. entrepreneurship
5. In which economic system are
the production and distribution of
goods owned by private individuals
or corporations?
A. traditional
B. feudalism
C. market
D. command
6. Which term best describes an economic
system in which the people—not the
government—own land, factories, and
businesses?
A. communism
B. market
C. command
D. traditional
7. Which word has the same meaning as the
economic term "tariff"?
A. tax
B. savings
C. debt
D. money
8. You need to purchase a pair of sneakers
since they are required for physical
education class. Which is an example of
effective decision making?
A. You buy the first pair of sneakers you
try on at the first store you visit.
B. You use your money to buy a pair of
jeans instead of a pair of sneakers.
C. You buy a pair of sneakers after
considering fit, appearance, and cost.
D. You buy the most stylish and expensive
pair of sneakers you find.
9. A country's parliament votes to increase
tariffs upon goods from another country.
This is an example of:
A. a monarchy encouraging free trade.
B. a representative democracy restricting
trade.
C. a socialist congress preventing free
enterprise.
D. a communist government allowing
freedom of speech.
10. In a traditional economic system people
usually exchange goods or services rather than
use money. Which of the following is an
example of this exchange process?
A. charging goods on a credit card
B. bartering with a seller
C. paying for services by check
D. using currency to pay
11. Why do items for sale have prices such
as $2.99, $5.99, and $9.99 instead of
$3.00, $6.00, and $10.00?
A. The stores are trying to help their
customers save money.
B. Such prices make the items seem less
expensive than they are.
C. Computers set the prices, and these
just happened to turn out this way.
D. Such prices are used to cut down on
the amount paid for taxes.
12. What is the purpose of a tariff, such as a
protective tariff?
A. to increase the prices of imported goods and
protect a country's own industries from foreign
competition
B. to decrease the prices of imported goods so a
country's people can buy what they need for the
lowest cost
C. to increase the prices of exported goods so a
country's own businesses are less likely to send
their products to other nations
D. to decrease the prices of exported goods so
people in other countries will buy the foreign
nation's product over one from home
13. The economic system of communist
countries is most closely related to which
of the following?
A. command
B. market
C. traditional
D. supply and demand
14. Which economic term best
describes using money to earn more
money?
A. selling
B. borrowing
C. trading
D. investing
15. The North American Free Trade
Agreement (NAFTA) was designed to
promote free trade between the United
States,
A. Canada, and Mexico.
B. the United Kingdom, and Russia.
C. Canada, and the United Kingdom.
D. Mexico, and the islands of the
Caribbean.
16. Canada and Mexico are SIMILAR in that
lowering trade barriers between these two
nations has resulted in both nations
experiencing
A. growth in their economies.
B. increases in unemployment.
C. increases in the prices of consumer
goods.
D. decreases in the quality of consumer
goods.
17. When a country has a market economy, which
of these statements correctly defines this
system?
A. Workers are guaranteed a pay raise every
year.
B. The government controls most of the
businesses in the country.
C. Basic goods in the country are provided to all
people without charge.
D. Companies produce goods of their choice and
consumers decide whether to buy the goods.
18. What is the purpose of free trade
partnerships like the North American Free
Trade Agreement (NAFTA) between the
United States, Canada, and Mexico?
A. to increase trade by doing away with
tariffs.
B. to allow countries to get needed goods
without having to pay for them
C. to keep the countries from trading with
Europe or Asia
D. to help the countries produce
everything they need for themselves