Economics Pretest – Flashcards
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A recession occurs when
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real gross domestic product falls for two or more quarter-year periods.
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When the nation's workers are "fully employed," the nation's unemployment rate is equal to
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the natural rate of unemployment
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Suppose the IBM proudly announces that its earnings this year were 15% higher than earnings last year. But in response the stock market prices of IBM share may fall if
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investors had expected earnings to rise more than 15%
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Economists closely watch the important federal funds rate. This is the interest rate
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that commercial banks charge when they make short-term loans to other commercial banks.
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The gross domestic product of our nation is the
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market value of all goods and services that are not used to make other goods and services
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The widely followed Consumer Price Index is used to measure
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inflation
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If a nation has a market economy, then
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most of the things we use to produce goods and services are owned by individuals and private firms
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Examples of externalities in our economy include
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automobile exhaust fumes, fish killed by industrial pollutants
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When the value of the U.S. dollar declines in international trading, then it is likely that
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U.S. Exports will rise
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During the 2007-2009 recession in the United States the unemployment rate for the nation reached a high level of about (select the closest value)
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10%
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Which of the following statements about the function of money is wrong?
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Money holds its value well in times of inflation
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Which of the following are most likely to be helped by inflation?
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People who borrowed money at a fixed on interest
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When the federal government's expenditures for a year are greater than its revenue for that year, the difference is known as:
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A budget deficit
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A large increase in the number of fast-food restaurants in community is most likely to result in:
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Lower prices and higher quality
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A person who starts a business to produce a new product in the marketplace is known as:
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an entrepreneur
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An increase from 5% to 8% in the interest rates charged by banks would most likely encourage:
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people to save money
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For most people, the largest portion of their personal income comes from:
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wages and salaries from their jobs
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If the real gross domestic product of the United States has increased, but the production of goods has remained the same, then the production of services has:
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increased
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If the United States stopped importing automobiles from country X, who would be most likely to benefit?
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Automobile manufacturers in the United States
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Mexico grows fruits and vegetables and Argentina produces beef. If Mexico voluntarily trades fruits and vegetables in exchange for Argentinean beef,
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Both Mexico and Argentina benefit from the trade
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When the governments supply products and services, these products are services usually benefit
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More than one person at a time whether they have paid for it or not.
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When deciding which of two items to purchase, one should always:
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Choose an item after comparing the costs and benefits of both items
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When a person rents and apartment, who benefits from the transaction?
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Both the person renting the apartment and the landlord
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The stock market is an example of an institution within our economy that exists to help people achieve their economic goal. The existence of this institution:
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Helps predict stock earnings
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The resources used in the production of goods and services are limited, so society must:
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Make choices about how to use resources
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The manufacturers of XYZ winter sportswear have their manufacturing plants running day and night, but they are unable to produce enough sportswear to satisfy demand. If XYZ manufacturers cannot increase production and demand continues to increase, the price of XYZ winter sportswear will:
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Increase
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In the United States, who determines what goods and services should be produced?
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Producers, consumers, and government
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If your city government sets a maximum amount landlords can charge in rent, what is the mostly likely result?
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There will be fewer apartments available than people want to rent
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If the price of beef doubled and the price of poultry stayed the same, people would most likely buy:
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More poultry and less beef
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Which of the following would be most likely to accelerate innovation in the computer industry?
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Investing in more research and development in the computer industry.
