Economic 2 Test Review

Economic 2 Test Review

The headline above best describes

A. a public service.B. an individual initiative.C. a state program.D. a public good.

**NEWS**President Eisenhower Signs Interstate Highway Bill

a public good.

Governments produce public goods and services because

A. individuals acting alone could not produce them efficiently.B. U.S. businesses refuse to produce them.C. individual businesses are forbidden by law from delivering public commodities.D. the Constitution of the United States requires it.

individuals acting alone could not produce them efficiently

Public goods and services are provided by:

A. State GovernmentB. Local GovernmentsC. Federal GovernmentD. All of the Above

All of the Above

Supporting new business start-ups describes which role of the government in regulating the economy?

A. Support CompetitionB. Provide Public Goods and ServicesC. Regulating BusinessD. Protecting Consumer and Property Rights

A. Support Competition

Overseeing the way that agencies and companies do business describes which role of the government in regulating the economy?

A. Support CompetitionB. Provide Public Goods and ServicesC. Regulating BusinessD. Protecting Consumer and Property Rights

C. Regulating Business

A severe recession can result in a(n)

A. InflationB. PeakC. ExpansionD. Depression

D. Depression

The changing in the performance of the economy is called the

A. InflationB. Fiscal PolicyC. Business CycleD. recession

C. Business Cycle

Soon after President George W. Bush assumed office the economy began to slow and show signs of a(n):

A. InflationB. RecessionC. DepressionD. Peak

B. Recession

A general rise in the price of goods and services is:

A. InflationB. RecessionC. DepressionD. Peak

A. Inflation

Which of the following is NOT a cause of inflation?

A. Surplus of GoodsB. Shortage of GoodsC. Supply lower than demandD. None of the above

A. Surplus of Goods

This amendment gave Congress the power to tax incomes:

A. 13thB. 14thC. 15thD. 16th

D. 16th

If the government decides to decrease its spending, what happens to the money supply?

A. IncreasesB. DecreasesC. Stays the sameD. None of the above

B. Decreases

If the government decides to increase our taxes, what happens to the money supply?

A. IncreasesB. DecreasesC. Stays the sameD. None of the above

B. Decreases

The government taxes, borrows and spends to:

A. influence economic activityB. Provide public goods and servicesC. Both A and BD. None of the above

C. Both A and B

What policies might the government implement to combat inflation?

Increase taxesIncrease government spendingBoth A and BNone of the above

Both A and B

What policies might the government implement to combat a recession?

Reduce taxesIncrease taxesDecrease government spendingIncrease government borrowing

Reduce taxes

Increase in DemandIncrease in EmploymentIncrease in Production

What government action will most likely cause the reaction shown in the box?

More spendingHigher taxesMore borrowingHigher revenues

More spending

A financial institution that is owned by its members is a:

A. Savings and LoanB. Credit UnionC. BankD. Security Brokerage

B. Credit Union

A financial institution that buys and sells stocks for clients is a

A. Savings and LoanB. Credit UnionC. BankD. Security Brokerage

D. Security Brokerage

What is the likely reaction if the Federal Reserve increases the money supply?

Interest rates rise and the economy slows downTaxes decreaseInterest rates decline and this stimulates the economyNone of the above

Interest rates decline and this stimulates the economy

The Federal Reserve System acts as the central bank for the United States by:

Issuing money to banksLending money to banksClearing checksAll of the above

Self Assessment is an important step in career planning because .

It is a government requirementEmployers consider this responsible behaviorAspirations should be guided by talent and interestIt shows you where the demand is for a particular job

Aspirations should be guided by talents and interests

In order to produce goods, a business needs all of the following EXCEPT?

Natural ResourcesHuman ResourcesCapital ResourcesIncentive Resources

Incentive Resources

The real total cost of taking out a loan is equal to the amount borrowed plus the..

InterestRevenueEntrepreneurResource

Interest

Essential factors of the economy of the United States include all of the following except..Private propertyCompetitionProfitsCentral Planning

Central Planning.

A new mall with 80 stores open up in Chesapeake. Which of the following situations is most likely to occur.The unemployment rate will go down and spending will go upThe unemployment rate will go up and spending will go downThe unemployment rate will go down and spending will go downThe unemployment rate will go up and spending will go down

The unemployment rate will go down and spending will go up

All of the following are basic economic questions all societies must answer EXCEPT..What will be produced?What will be the profit margin?Who will produce it?For whom will it be produced?

What will be the profit margin?What economic role is illustrated when someone buys a gallon of milk?ConsumerEntrepreneurInvestorProducer

Consumer

The United States government regulates business by

A. Controlling and owning natural resourcesB. Ensuring competitionC. Allowing monopoliesD. All of the above

Ensuring competition

One important reason that Virginia and the United States trade with other nations is to:

A. sell goods outlawed by U.S. consumer lawsB. buy goods and services at a lower opportunity costC. decrease the number of jobsD. control the worldwide cost of a good

buy goods and services at a lower opportunity cost

One important influence of new technology in the workplace is the

A. increase of the cost of productionB. the reduction of the flow of capitalC. decrease of supply and demandD. the creation of new jobs

the creation of new jobs

To protect consumers, federal agenciesA. Write contracts for consumers. B. Establish guidelines for public health and safety.C. Ask the Supreme Court to research businesses.D. Approve all consumer contracts before they take effect.

Establish guidelines for public health and safety.

The right of private property is protected by

The First Amendment.The Federal Reserve System.Government securities.Negotiated contracts.If business or individuals violate consumer rights,Consumers may take legal actionBusinesses may take legal actionConsumers can take matters into their own handsConsumers do not have any rights of protection