Economics Unit 3 Test Answers Essay

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(Chapter 8) The Fair Labor Standards Act
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established a federal minimum wage
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(Chapter 8) The first federal legislation to exepmt unions from the antitrust laws was the
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Clayton Antitrust Act
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(Chapter 8) Workers who have the skills to operate machines and who require a minimum amount of training are
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semiskilled labor
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(Chapter 8) The theory that wages are based on the supply and demand for a worker’s skills is the
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traditional theory of wages
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(Chapter 8) All of the following can be used to establish more equal pay between men and women EXCEPT the
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Fair Labor Standards Act
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(Chapter 9) The incidence of a tax can more effectively be shifted from the supplier to the consumer if
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the demand curve in inelastic
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(Chapter 9) The authority to levy federal income tax comes from
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the Sixteenth Amendment
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(Chapter 9) Intergovernmental revenues are generally intended for
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education and public welfare
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(Chapter 9) The alternative minimum tax
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requires people to pay a minimum tax of 20 percent
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(Chapter 9) The flat tax
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simplifies the tax process
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(Chapter 10) All levels of government combined consume about
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one-third of the nations output
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(Chapter 10) An example of mandatory spending is financing for
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interest payment on the federal debt
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(Chapter 10) The largest category of spending for most local governments is
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elementary and secondary education
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(Chapter 10) The United States government accumulated huge deficits during the 1980s due to
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a doubling of spending on national defense
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(Chapter 10) The “pay-as-you-go” provision was a feature of the
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Budget Enforcement Act
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(Chapter 11) Money that has an alternative use as an economic good is
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commodity money
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(Chapter 11) Money loses its value when
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becomes too plentiful
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(Chapter 11) When a bank is about to collapse,
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the FDIC may secretly seize the bank
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(Chapter 11) The FDIC was established to
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protect the savings of the American people
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(Chapter 11) When Congress reformed the thrift industry in 1989, all of the following occurred EXCEPT
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remaining S&Ls were merged with commercial banks
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(Chapter 12) A nonbank financial intermediary that primarily makes loans to construction companies for building homes is the
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real estate investment trust
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(Chapter 12) The par value of a bond is
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the total amount borrowd
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(Chapter 12) Junk bonds
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are exceptionally risky
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(Chapter 12) The Efficient Market Hypothesis argues that
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stocks are always priced about right
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(Chapter 12) Investors who sign a contract guaranteeing them the option of selling shares of stock at a specified price in the future have agreed to a
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put option

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