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In this type of economic system, the government controls all aspects of the economy and makes all decisions about what goods will be produced, who will produce them, and how they will be produced.

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Command

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What is the ability to repay a loan.

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Capacity

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A left shift of the aggregate supply line causes an increase in

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Inflation and unemployment

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For a market economy to function well, it is MOST important that laws be passed to protect the right to

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Property

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What are tariffs?

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Taxes on the import of goods from a country

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In a mixed market economy, what MIGHT be considered a basic function of government?

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to correct markets failures and redistribute income

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In the business cycle, what always follows immediately after a peak?

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contraction

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Demand for a product is measured not only by consumer desire for a product, but also by

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ability and willingness to buy the product

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Monetary policy is BEST described as

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actions by the Federal Reserve System to expand or contract the money supply.

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Who would be MOST critical of these statements about Free Trade Agreements?

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a US factory worker whose job has been outsourced to a foreign country

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Inflation is defined as a rise in the general level of prices. When inflation occurs, the buying power of the dollar would

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decrease.

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The process by which the Federal Reserve controls the supply, availability, and cost of money in order to keep the economy stable is

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monetary policy.

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Which market(s) has no competition

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monopoly

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The single most important measure of the economy's overall economic performance, or the measure of national output, is called

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Gross Domestic Product (GDP).

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When NAFTA went into effect in 1994, what was the concern of labor leaders and environmentalists in the United States?

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They believed companies would move to Mexico where wages were lower and enviromental controls were less therefore leading an increase in the US unemployment rate and more pollution.

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Which loan(s) would cost the borrower the most amount for the length of the loan?

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Loan for Vehicle Loan APR Payment #3 $30,000 for 84 months 4.35% $415

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Of the terms listed below, which is the BEST synonym for the word "profit"?

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"earnings"

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In the business cycle, what always follows immediately after a contraction?

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trough

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What should happen to the equilibrium price of whoopee cushions when the price of the rubber necessary to make the cushions declines?

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The equilibrium price will fall.

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Which scenario is LEAST LIKELY to occur in a market economy?

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The government allows only two competitors to offer goods for sale on the country's highways.

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How might a minimum wage law impact the supply and demand of workers?

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It might result in a surplus of supply.

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Why are regressive taxes considered heaviest on low income taxpayers?

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The tax is levied on something other than income but ends up being a higher percentage of their income than it would be for a higher earner.

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Morgan is deciding between two loan offers. To determine which loan to choose, she should compare each loan's

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annual percentage rate.

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An import quota is a

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legal limit on the amount of a good that can be imported into a country

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Freedom to own the factors of production, subsidized transportation services, and involuntary spending and investments are all examples of

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mixed economies.

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Countries around the world specialize production, and trade with other countries based upon

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the comparative advantage in production.

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The price of one nation's currency in terms of another nation's currency is called

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the exchange rate.

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The difference between money paid to, and received from, other nations in trade is the

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balance of payments.

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The job that would MOST LIKELY require strong written communication skills is

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a secretary.

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These facts provide evidence that Canada has a

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mixed economy.

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In which market type are firms considered "price takers" because they take the price in the market and have no control over setting a price?

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Perfect Competition

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Sean decided he no longer needs his smartphone, but would really like a small camera. Sarah, on the other hand, has a small camera she is not using and desperately needs a smartphone. The agree to trade each other their unwanted goods for those that they want and need. Sean and Sarah's situation is an example of

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voluntary exchange.

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Which statement is a PRIMARY characteristic of a capitalist system?

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private ownership of property

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Inflation is most harmful to

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creditors.

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Which statement BEST describes a benefit of natural monopolies, like utilities?

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Natural monopolies can provide services in areas not served by other firms.

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An increase in the market demand for gasoline in the present, all else equal, could be caused by

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a rise in peoples' income.

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In 2007, Apple, Inc., released the first iPhone which served as a combination mobile phone, digital camera, and music player, and offered some basic computer technology. The iPhone is similar to some other recent computer and communications products because it is an example of

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US research and design with mostly Asian production.

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Why would banks offer lower interest rates for loans?

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To encourage people to borrow money.

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Which choice BEST expresses why widespread pirating of goods would be damaging to a market economy?

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Producers would be unwilling to produce new goods.

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In 2003, the Social Security component of the Federal Insurance Contributions Act (FICA) was 6.2 percent of wages and salaries up to $87,000. After that amount, Social Security taxes were not collected, regardless of income. Because Social Security tax was capped in 2003, it was

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proportional up to $87,000.

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This graph shows that there was an increase in the unemployment rate in the U.S. in the years between 1990 and 1993. This increase most likely corresponds to

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an economic recession in the U.S.

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ditch digger · computer programmer · international financier ALL of these are examples of

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human resources.

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Business cycles in the United States

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always follow the same basic pattern.

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In the graph, what might explain the movement of the demand curve from D1 to D3?

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a decrease in the price of a complementary product

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When a country experiences a depreciation of its currency, it can expect which of these to happen?

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balance of trade to improve

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Which statement reflects an accurate argument in favor of a command economy?

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It ensures continuous use of all available resources.

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How do supply and demand influence market price?

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The market clearing price is where quantity demanded is equal to quantity supplied.

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Of the following groups, the one hurt MOST by unanticipated inflation is

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banks who have made short-term adjustable rate mortgages.

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What is a main goal of the Federal Reserve in its monetary policy?

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to curb recessions

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This illustrates that one function of money is to be a

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store of value.

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