Texas Tech Economics Final (MC only) – Flashcards
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We are forced to make choices because a. shortages are a constant situation b. all resources are limited c. we live in a democracy d. not everything is limited
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b. all resources are limited
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The four factors of production are the resources of land, labor, capital, and a. technology b. services c. entrepreneurship d. goods
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c. entrepreneurship
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A truck used by a plumber is a type of a. raw good b. capital c. modus transportius d. labor
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b. capital
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The value of the next best alternative that had to be given up to do the action that was chosen is a. sale price b. capital c. opportunity cost d. trade-off
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c. opportunity cost
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All the combinations of goods and services that can be produced in a given time with a fixed amount of resources are called a. production possibilities b. trade-offs c. factors of production d. costs
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a. production possibilities
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When Adam Smith coined the term "invisible hand," he was referring to a. the market b. entrepreneurship c. the government d. slave labor
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a. the market
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Pure capitalism is also known as a a. laissez-faire system b. quota system c. command economy d. mixed economy
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a. laissez-faire system
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The desire to make money that motivates people to produce goods and services is called a. greed b. the profit incentive c. entrepreneurship d. laissez-faire
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b. the profit incentive
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Which country best follows the ideas of Adam Smith? a. China b. Cuba c. North Korea d. Singapore
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d. Singapore
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Productivity refers to a. using the four factors of production b. measuring scales c. creating goods and services d. producing goods and services in better and faster ways
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d. producing goods and services in better and faster ways
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Which of the following is a strength of a market economy? a. no one is allowed to live in poverty b. it offers guaranteed lifetime employment c. it gives producers and consumers a great deal of freedom d. it provides centralized planning
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c. it gives producers and consumers a great deal of freedom
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Today most economic systems are a. mixed b. traditional c. command d. capitalist
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a. mixed
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The goal of economic freedom is to a. give government a large role in the economy b. limit competition c. allow people to make choices d. ensure that businesses don't fail
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c. allow people to make choices
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Unemployment compensation helps provide economic a. freedom b. stability c. growth d. equity
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b. stability
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Since the founding of the United States, the role of government in the economy has a. had no impact on individual economic choices b. been eliminated c. increased d. decreased
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c. increased
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Zoning regulations are an example of a. the role of government in regulating economic activities b. a traditional economy c. a pure market economy d. the lack of government involvement in economic activities
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a. the role of government in regulating economic activities
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When analyzing an economic problem, economists do not consider a. values b. choices c. government regulations d. resources
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a. values
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A free enterprise system involved trade-offs between a. state and federal government b. individual gain and social equity c. customs and beliefs d. businesses in the same industry
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b. individual gain and social equity
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Which of the following is an example of a good? a. a car b. a car wash c. a tune-up d. an oil change
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a. a car
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"Bait and switch" is an example of __________ advertising. a. deceptive b. generic c. informative d. competitive
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a. deceptive
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Generic products a. are the most expensive b. are sold only in major department stores c. have no name brand d. have lifetime warranties
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c. have no name brand
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Which federal agency has the responsibility of making sure that food production is sanitary? a. U.S. Department of Agriculture b. Federal Trade Commission c. U.S. Office of Food Production d. Consumer Product Safety Commission
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a. U.S. Department of Agriculture
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The federal agency that protects consumers from unsafe drugs, foods, and cosmetics is the a. U.S. Department of Agriculture b. Federal Trade Commission c. Food and Drug Administration d. Consumer Product Safety Commission
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c. Food and Drug Administration
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On average, which of the following people can expect to earn the most money? a. someone with an advanced degree b. a high school dropout c. someone with a college degree d. someone with a high school diploma
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a. someone with an advanced degree
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When an individual saves, a. it deprives business of money to expand b. the individual benefits c. the whole economy benefits d. it deprives others of money to invest
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c. the whole economy benefits
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A promise by the manufacturer to replace or repair a faulty product is a. required by federal law b. a warranty c. bait and switch d. a liability
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b. a warranty
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A financial institution that is owned and operated by its members to provide savings and low-interest loans to those members is a a. credit union b. savings and loan association c. commercial bank d. savings bank
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a. credit union
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The benefit of borrowing is a. being able to buy and enjoy the item now b. increasing your debt c. the opportunity cost d. the interest the borrower has to pay on the loan
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a. being able to buy and enjoy the item now
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Something of value that is used to secure a loan is a. collateral b. chattel c. principal d. a mortgage
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a. collateral
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The Truth in Lending Act was created to a. protect a person's credit record b. reveal all the credit terms to the borrower c. make it easier for collection agencies to collect d. reduce paperwork
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b. reveal all the credit terms to the borrower
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When deciding between two sources of credit, you should compare the a. finance charges b. monthly payments c. credit limits d. annual percentage rates
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d. annual percentage rates
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Your credit rating affects your ability to a. get a job b. get a loan c. save money d. get an education
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b. get a loan
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The passage of the Equal Credit Opportunity Act means that it is illegal to deny credit based on a. race b. gender c. all choices are correct d. religion
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c. all choices are correct
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A usury law a. awards credit based on need b. sets the maximum interest rates consumers can be charged c. regulated how borrowed money may be used d. limits the amount of credit that a bank can offer
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b. sets the maximum interest rates consumers can be charged
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Declaring bankruptcy will stay on your credit record a. for two years b. for seven years c. forever d. for ten years
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d. for ten years
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The opportunity cost for using store coupons when food shopping is a. less time b. less money c. lower quality d. less food
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a. less time
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To help consumers compare food brands, most states require stores to provide a. advertising b. unit pricing on products c. checkout scanners d. generic brands
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b. unit pricing on products
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Consumers who can store large quantities of bulk food items can save money by shopping at a. convenience stores b. discount stores c. large supermarkets d. warehouse stores
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d. warehouse stores
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The advantage of home ownership is a. higher price b. increased mobility c. lower maintenance d. creation of equity
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d. creation of equity
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The Dow Jones Industrial Average is a. a stock index b. a measure of industrial output c. a mutual fund d. the same things as the S&P 500
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a. a stock index
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The work-time cost of a pair of shoes that cost $150 is the a. number of hours a buyer must work to earn $150 b. number of payments a buyer must make c. amount of time the buyer gets to use the shoes and the value priced on them d. value of time spent comparison shopping for the shoes
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a. number of hours a buyer must work to earn $150
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Monthly mortgage payments should be no more than a. monthly rental payments b. 50 percent of monthly take-home pay c. one third of monthly take-home pay d. monthly food bills
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c. one third of monthly take-home pay
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Which group of people pays the highest automobile insurance rates? a. drivers with a good safety record b. people who live in a small town c. single males, ages 16-25 d. married women, ages 25-45
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c. single males, ages 16-25
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Service flow is a. the amount of time someone gets to use a product and the value placed on its use b. the product lasting a long time c. the speed of a checker d. how sales are routed in a store
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a. the amount of time someone gets to use a product and the value placed on its use
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A lease describes a. rights and responsibilities of the tenant b. rights and responsibilities of the landlord c. rights and responsibilities of both the landlord and tenant d. all conditions related to the mortgage
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c. rights and responsibilities of both the landlord and tenant
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The decline in value over time that occurs with vehicles is called a. appreciation b. liability c. retrovalues d. depreciation
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d. depreciation
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A savings account is insured by a. an agency of the federal government b. state agencies c. private insurance corporation and agencies d. individual banks and financial institutions
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a. an agency of the federal government
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The trade-off for the easy withdrawal of cash from savings accounts is a. penalties for early withdrawal b. a waiting period before is received c. lower interest rates d. high transaction costs
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c. lower interest rates
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A certificate issued by a government or firm in exchange for borrowed money is a/an a. IRA b. bond c. stock d. asset
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b. bond
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The money earned from shares of stock is called a. interest b. capital c. dividends d. equity
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c. dividends
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Which of the following investments has the greatest risk? a. stock market b. Treasury note c. savings bond d. mutual fund
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a. stock market
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The law of __________ states that as a person consumes additional units of good, eventually the satisfaction gained from each additional unit of the good decreases. a. diminishing marginal utility b. demand c. supply and demand d. quantity demanded
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a. diminishing marginal utility
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When the demand curve shifts to the right, it indicates that buyers are willing and able to purchase __________ of a good at the original price and at all other prices. a. more b. all c. none d. less
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a. more
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When demand is __________, the price change will not result in a substantial change in the quantity demanded. a. static b. inelastic c. elastic d. neutral
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b. inelastic
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Important factors that can affect the elasticity of demand include the availability substitutes, the percentage of income spent on a good, and a. season b. time given to adjust to price change c. competition d. the size of the good
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b. time given to adjust to price change
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According to the law of supply, the quantity supplied of a good rises when the __________ of that good rises. a. quality b. elasticity c. price d. substitute
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c. price
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A leftward shift in supply curve means that supply has a. neither decreased nor increased b. increased c. remained stable d. decreased
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d. decreased
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Important factors that can cause supply curves to shift include input prices, technology, and a. taxes b. demand c. consumer preferences d. imports
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a. taxes
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Price is determined a. by outside factors b. primarily by supply c. by supply and demand together d. primarily by demand
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c. by supply and demand together
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A surplus will cause prices to a. remain constant b. rise suddenly c. fall d. rise gradually
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c. fall
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A shortage will cause prices to a. fluctuate b. remain constant c. fall d. rise
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d. rise
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An equilibrium price a. rises with falling demand b. should remain relatively stable c. will reduce supply d. rises with rising demand
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d. rises with rising demand
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If nothing else changes, and the supply of a good rises, the price of that good will a. rise b. fluctuate c. fall d. remain constant
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c. fall
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If nothing else changes, and the supply of a good decreased, the price of that will a. remain constant b. fluctuate c. fall d. rise
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d. rise
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Demand for one particular type of automobile is probably a. elastic b. inelastic c. marginal utility d. substitutable
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a. elastic
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When the price of a product is below is equilibrium, the result is a. surplus b. demand c. shortage d. black market
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c. shortage
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Typically, a good that has no substitutes will have a. very inelastic demand b. very elastic demand c. no demand d. no value
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a. very inelastic demand
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Which of the following agencies enforces standards for air, water, and toxic waste? a. Food and Drug Administration b. Federal Trade Commission c. Environmental Protection Agency d. Occupational Safety and Health Administration
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c. Environmental Protection Agency
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All corporations must a. elect a board of governors b. all choices are correct c. sell stock d. register with the state
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b. all choices are correct
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To determine a business's profits, you would a. subtract wages from receipts b. subtract taxes from expenses c. subtract costs of equipment from income d. subtract total expenses from receipts
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d. subtract total expenses from receipts
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Risk is a part of a. any business venture b. most partnerships c. only large businesses d. joint ventures
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a. any business venture
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The most common type of business is a. corporation b. sole proprietorship c. partnership d. limited partnership
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b. sole proprietorship
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A sole proprietor has __________, which means that his or her personal assets may be used to pay off the debts of the business. a. limited liability b. unlimited life c. limited life d. unlimited liability
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d. unlimited liability
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In a partnership, you would a. share the profits or losses with your partner b. have no responsibility for the debts of the partnership c. have no say in how the business is run d. share only the profits with your partner
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a. share the profits or losses with your partner
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Which of the following is an example of a franchise business operations? a. Kmart b. Burger King c. JC Penny d. The Gap
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b. Burger King
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Which of the following agencies regulates the workplace environment? a. Environmental Protection Agency b. Federal Trade Commission c. Food and Drug Administration d. Occupational Safety and Health Administration
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d. Occupational Safety and Health Administration
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About the closest you can find to perfect competition is in a. the Cuban economy b. the computer industry c. agriculture d. the airline industry
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c. agriculture
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Of the four market structures, __________ gives sellers the most control over prices. a. perfect competition b. monopoly c. oligopoly d. monopolistic competition
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b. monopoly
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Perfectly competitive markets yield a. growth b. social discord c. equal distribution of wealth d. economic efficiency
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d. economic efficiency
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A goal of the United States has been to a. not interfere with the economy in any way b. protect monopolies c. encourage competition in the economy d. promote mergers
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c. encourage competition in the economy
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In perfectly competitive markets, all firms sell __________ goods. a. nearly identical b. perfect c. differentiated d. high-quality
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a. nearly identical
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Mergers tend to a. increase competition in the marketplace b. improve product quality c. have no effect on competitiveness in the marketplace d. reduce competition in the marketplace
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d. reduce competition in the marketplace
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When deciding whether to expand a business, you should a. sell stock b. make a cost-benefit analysis c. ask friends for loans d. sell bonds
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b. make a cost-benefit analysis
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A loan that is backed by collateral is called a. a secured loan b. a line of credit c. and unsecured loan d. trade credit
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a. a secured loan
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A loan that will be repaid in 1 to 10 years is a. short-term financing b. long-term financing c. intermediate-term financing d. a grant
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c. intermediate-term financing
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A business would seek long-term financing to a. lease cars b. build a new plant c. make payroll d. reinvest in the stock market
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b. build a new plant
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Before obtaining capital, financial managers should consider market climate and a. company reputation b. production history c. interest rates d. government regulations
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c. interest rates
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Economists estimate that __________ percent of the price people pay for an item is the cost of marketing. a. 50 b. 20 c. 10 d. 30
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a. 50
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Marketing aimed at creating demand, or convincing consumers that a product is a necessity, began in a. the early 1900s b. the 1950s c. the 1990s d. the 1920s
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b. the 1950s
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A gas station on a busy corner is an example of a. form utility b. place utility c. time utility d. ownership utility
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b. place utility
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Selling a new product at a low price to try to attract customers away from an established product is called a. promotional pricing b. price leadership c. penetration pricing d. direct pricing
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c. penetration pricing
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A business that buys large quantities of goods to resell to other businesses is called a/an a. e-mailer b. wholesaler c. distributor d. retailer
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b. wholesaler
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Sam's Club is an example of a/an a. wholesaler b. direct marketer c. club warehouse d. Internet marketer
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c. club warehouse
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Which of the following is an unskilled worker? a. architect b. bricklayer c. delivery person d. physician
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c. delivery person
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The minimum wage law has the most impact for a. unskilled workers b. professionals c. skilled workers d. white-collar workers
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a. unskilled workers
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Wages are determined by a. location of job b. all choices are correct c. skill d. type of job
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b. all choices are correct
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This law allows the President to delay a strike if it threatens the nation's health and safety. a. Wagner Act b. Taft-Hartley Act c. Norris Act d. Landrum-Griffin Act
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b. Taft-Hartley Act
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Which of the following is a right-to-work state? a. Texas b. California c. New Mexico d. Colorado
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a. Texas
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Workers who replace striking workers are called __________ by the strikers. a. "losers" b. "traitors" c. "scabs" d. "whiners"
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c. "scabs"
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When management prevents workers from returning to work, it is called a a. strike b. boycott c. lockout d. sick-out
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c. lockout
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Since the 1940s, union membership has a. stayed the same b. increased c. not been tracked d. decreased
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d. decreased
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When determining GDP, a. homes are counted two times for every car included b. quality of goods is considered c. both new and used goods are counted d. the dollar is used as the common measure
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d. the dollar is used as the common measure
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A tight money policy would cause a. businesses to borrow money to expand capacity b. people to borrow more money c. businesses to cut back on production d. home sales to increase
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c. businesses to cut back on production
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A car produced by General Motors in a plant in Ontario, Canada, a. would count in GDP b. would count in GNP c. would run better in the snow d. would not count in GDP or GNP
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b. would count in GNP
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Welfare payments made to individuals are called a. wages b. discretionary income c. transfer payments d. national income
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c. transfer payments
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When inflation occurs, the purchasing power of the dollar a. remains the same b. increases c. initially increases, then decreases d. decreases
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d. decreases
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Gross domestic product that has been adjusted for inflation is called a. CPI b. national income c. GDP d. real GDP
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d. real GDP
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If current GDP was $10,000 and the price deflator was 110, then real GDP would be a. $11,000 b. $9,352 c. $9,090 d. $10,000
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c. $9,090
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If the CPI was 115 in 2000 and rose to 124 in 2003. what was the total increase in prices as a percentage? a. 9% b. 7.8% c. 3% d. 21.1%
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b. 7.8%
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The interest rate that a bank charges its best business customers is called the a. business rate b. federal funds rate c. prime rate d. discount rate
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c. prime rate
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Which of the following would cause the aggregate demand curve to shift to the right? a. oil prices decrease b. an increase in taxes c. a decrease in taxes d. oil prices increase
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c. a decrease in taxes
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The Fed could reduce, or contract, the money supply by a. all choices are correct b. lowering the reserve requirement c. raising the federal funds rate d. buying bonds on the open market
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c. raising the federal funds rate
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The highest point in the business cycle is the a. trough b. contraction c. peak d. expansion
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c. peak
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Any period of at least 6 months in which real GDP does not grow is a. a depression b. an expansion c. two quarters d. a recession
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d. a recession
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Which of the following is not a main force behind business fluctuations? a. external factors b. business investment c. leading indicators d. government activity
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c. leading indicators
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The number of building permits issued for private housing is a/an a. inflationary indicator b. lagging indicator c. coincident indicator d. leading indicator
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d. leading indicator
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Which of the following is a commodity money? a. paper currency b. coins c. cattle d. a negotiable bond
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c. cattle
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If you put money in a certificate of deposit, you are using it as a a. store of value b. commodity c. unit of accounting d. medium of exchange
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a. store of value
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United States currency is a. representative money b. commodity money c. gold reserve money d. fiat money
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d. fiat money
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An ATM can receive deposits, give out funds, accept payments, and a. provide credit ratings b. cash checks c. transfer funds between accounts d. make loans
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c. transfer funds between accounts
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The measure of money called M1 consists of all currency, all checkable deposits, and a. certificates of deposit b. mortgages c. traveler's checks d. savings bond
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c. traveler's checks
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The Federal Reserve bank was created in 1913 to a. manipulate the money supply b. end financial panics c. insure bank deposits d. collect taxes
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b. end financial panics
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The body of the Fed that determines monetary policy is the a. Federal Advisory Council b. Federal Open Market Committee c. Board of Governors d. Monetary Advisory Board
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b. Federal Open Market Committee
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If the economy were in a recession, the Fed would probably a. seek the advice of the President and his administration b. do nothing c. follow a tight money policy d. follow a loose money policy
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d. follow a loose money policy
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Monetarism is linked with the economist a. Milton Friedman b. John Maynard Keynes c. Adam Smith d. Karl Marx
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a. Milton Friedman
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Monetarists believe that a. fiscal policy is not effective b. the Fed should increase the supply of money 3 to 5 percent per year c. the government should not operate with deficits each year d. all choices are correct
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d. all choices are correct
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The Federal Reserve followed strict monetarist policy a. at its inception in 1913 b. in the late 1990s c. in the 1960s d. in the early 1980s
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d. in the early 1980s
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Which of the following is not a goal of the federal government? a. protect individual rights b. promote a stable, legal environment for economic activity c. promote the general well-being of all citizens d. control prices
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d. control prices
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Which of the following is a public good that only the federal government provides? a. roads b. national defense c. law enforcement d. education
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b. national defense
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A museum is an example of a a. merit good b. social insurance program c. public-assistance program d. demerit good
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a. merit good
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The theories of John Maynard Keynes were developed during, and influenced by, a. the Great Depression b. World War I c. the presidency of Ronald Reagan d. the presidency of John F. Kennedy
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a. the Great Depression
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Which program pays for health care for low-income or disabled people? a. Medicaid b. Social Security c. Supplement Medical Pay d. Medicare
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a. Medicaid
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The largest expenditure for the federal government is a. transportation b. national defense c. education d. income security, Social Security and Medicare
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d. income security, Social Security, and Medicare
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The largest expenditure for state and local governments is a. health and hospitals b. housing c. education d. public welfare
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c. education
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When the leakages and injections of the economy are balanced, it is called a. equilibrium b. circular regularity c. a balanced budget d. fiscal policy
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a. equilibrium
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The gas tax is an example of the taxation principle of a. benefits-received b. proportional taxation c. ability-to-pay d. progressive taxation
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a. benefits-received
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The cigarette tax is an example of a __________ tax. a. progressive b. proportional c. sales d. regressive
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d. regressive
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Supporters of fiscal policy believe that unemployment can be reduced by a. increasing trade b. increasing taxes or reducing government spending c. decreasing taxes or increasing government spending d. decreasing trade
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c. decreasing taxes or increasing government spending
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John Maynard Keynes believe that a. the love of money was the root of all evil b. the supply of money should not be adjusted by the government c. manipulating the economy would encourage economically weak business d. the government should intervene in the economy by adjusting the amounts that it taxes and spends
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d. the government should intervene in the economy by adjusting the amounts that it taxes and spends
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The percentage of civilian labor force that is without jobs but actively looking for work is called a. the full employment rate b. the unemployment rate c. the frictionally unemployed d. underground employees
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b. the unemployment rate
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A person between jobs because of a firing, layoff, or voluntary search for a new job is __________ unemployed. a. seasonally b. frictionally c. structurally d. cyclically
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b. frictionally
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When prices rise due to excessive business and consumer demand, it is called a. deflation b. stagflation c. demand-pull inflation d. cost-push inflation
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c. demand-pull inflation
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When prices rise due to wage demands and excessive profit motives, it is called a. cost-push inflation b. deflation c. demand-pull inflation d. stagflation
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a. cost-push inflation
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When rising prices occur simultaneously with high unemployment, it is called a. stagflation b. inflated unemployment c. hyper-inflation d. demand-pull inflation
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a. stagflation
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Money that is removed from the circular flow of income through either savings or taxation is referred to as a a. loss of flow b. injection c. leakage d. transfer
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c. leakage
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Supporters of fiscal policy believe that inflation can be reduced by a. decreasing taxes or increasing government spending b. increasing trade c. decreasing trade d. increasing taxes or reducing government spending
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d. increasing taxes or reducing government spending
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International trade occurs because nations differ in the a. all choices are correct b. availability of natural resources c. amount and type of labor that is available d. amount of capital available
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a. all choices are correct
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When a country can produce a product at less cost than another country with the same amount of resources, we say it has a. a comparative advantage b. better technology c. smarter labor force d. an absolute advantage
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d. an absolute advantage
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When a country can produce a product at a lower opportunity cost than another country, we say it has a. a comparative advantage b. better technology c. a smarter labor force d. an absolute advantage
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a. a comparative advantage
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Which of the following is a product that Guatemala has a comparative advantage at producing when compared with the United States? a. nuclear power plants b. bananas c. airplanes d. computers
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b. bananas
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International trade affects a. only people that export goods b. only people that import goods c. only non-skilled workers d. everyone
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d. everyone
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The price of a currency in terms of another currency is called the a. exchange rate b. balance of trade c. balance of exchange d. dollar valuation
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a. exchange rate
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The difficulty with a fixed rate of exchange is that a. it caused depreciation b. no one knew the value of their currency c. it caused a gold shortage d. the economic climate was constantly changing
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d. the economic climate was constantly changing
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If a country's imports exceed its exports, it has a. an exchange rate problem b. good importers c. a trade deficit d. a trade surplus
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c. a trade deficit
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For several decades, the United States has had a. a trade deficit b. a trade surplus c. balanced trade d. very little trade
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a. a trade deficit
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If the value of the dollar drops versus the British pound, a. Americans will import more British good and export more to Britain b. Americans will import fewer British goods and export less to Britain c. Americans will import more British goods and export less to Britain d. Americans will import fewer British goods and export more to Britain
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d. Americans will import fewer British goods and export more to Britain
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If American exporters want more British pounds than the supply of pounds provided by British who want American goods, a. the American dollar will become less expensive in relation to the British pound b. it will have no bearing on the value of the American dollar but will increase the value of the British pound c. it will have no bearing on the value of the British pound but will increase the value of the American dollar d. the American dollar will become more expensive in relation to the British pound
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a. the American dollar will become less expensive in relation to the British pound
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Completely restricting the trade of a particular item is a/an a. GATT b. quota c. tariff d. embargo
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d. embargo
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Which of the follow is not an argument for free trade? a. more goods at lower prices b. increasing exports c. improved products d. protecting national security
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d. protecting national security
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Someone who is in the proletariat is a a. banker b. worker c. business owner d. government official
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b. worker
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In Karl Marx's vision of communism a. there would be no need for government b. government would make all decisions c. the free market would reign d. the world would have already ended by now
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a. there would be no need for government
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Which of the following is a characteristic of pure capitalism? a. the state owns the means of production b. the basic economic questions are answered by individuals in a decentralized way c. economic questions are answered by centralized planners d. prices are set by the state
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b. the basic economic questions are answered by individuals in a decentralized way
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Which of the following is a characteristic of pure socialism? a. the basic economic questions are answered by individuals in a decentralized way b. private property rights exist and are enforced by law c. taxation is used to redistribute income d. prices seek their own level as determined by supply and demand
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c. taxation is used to redistribute income
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The lack of property right protections and the rule of law have a. helped China's transition to capitalism b. hindered China's transition to capitalism c. encouraged foreign investment d. had little effect on China's economy
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b. hindered China's transition to capitalism
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China's slow move toward a capitalist system began a. with the government leasing land to farmers b. when the government declared that communism had failed c. with democratic elections d. when the government sold off all its state-owned enterprises
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a. with the government leasing land to farmers
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China made a big step toward capitalism when in 1999 they joined the a. World Trade Organization b. United Nations c. General Agreement on Trade and Tariffs d. North American Free Trade Agreement
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a. World Trade Organization
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One of the problems of privatization of businesses in Russia was that a. no one wanted any of the business b. they were sold at bargain-basement prices to insiders c. there were not enough workers to fill the demand for labor d. western countries took them over and retained the profits
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b. they were sold at bargain-basement prices to insiders
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Recently Sweden has drifted toward being more a. fascist b. socialist c. capitalist d. authoritarian socialist
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c. capitalist
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The trend in Latin America in the last two decades has been a. the rise of more authoritarian governments b. more privatization c. more government acquisition of private business d. more centralized planning
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b. more privatization
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Of all the over 135 nations of the world, how many are considered developed? a. 25 b. 74 c. 35 d. 125
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c. 35
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About what percentage of the world's population lives at a subsistence level? a. 25% b. 50% c. 60% d. 5%
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b. 50%
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According to the graph on page 519 of your textbook, which developing country has the lowest per capita GDP? a. Pakistan b. Malaysia c. Haiti d. Italy
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c. Haiti
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Which of the following is not a characteristic of a developing nation? a. rapid population growth b. high literacy rate c. poor health conditions d. an agricultural economy
answer
b. high literacy rate
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The three stages of economic development occur in what order? a. agricultural stage, manufacturing stage, service stage b. manufacturing stage, service stage, agricultural stage c. agricultural stage, manufacturing stage, computer stage d. agricultural stage, service stage, manufacturing stage
answer
a. agricultural stage, manufacturing stage, service stage
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When a nation takes over an industry and forces the firm's owners out of the country, it is called a. nationalization b. privatization c. foreign aid d. economic exile
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a. nationalization
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Aid given to developing nations that comes in the form of engineers, teachers, and technicians to teach skills is a. military assistance b. technical assistance c. economic assistance d. educational assistance
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b. technical assistance
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The United States has given developing nations monetary assistance a. to enhance the appeal of democracy and prevent Communism from coming to power b. all choices are correct c. to increase our own national security d. to expand our markets for exports
answer
b. all choices are correct
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When trade restrictions are used by a developing nation, it a. lowers taxes b. increases growth c. retards growth d. increases trade
answer
c. retards growth
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A vicious cycle of poverty is a a. theory that poverty exists because people are greedy b. theory that poverty can only be overcome by state planning c. theory that poor nations are poor because they don't invest and save, and that they can't invest and save because they are poor d. country that has a high crime rate because it is poor
answer
c. theory that poor nations are poor because they don't invest and save, and that they can't invest and save because they are poor
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Globalization began when a. the World Trade Organization was created b. corporations began to enter foreign countries c. U.S. banks developed worldwide branch networks for loans and foreign exchange trading d. NAFTA was enacted
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c. U.S. banks developed worldwide branch networks for loans and foreign exchange trading
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When the U.S. stock market falters, other nation's stock markets a. are closed as a precaution b. are unaffected c. also falter d. benefit
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c. also falter
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The total share of foreign ownership of American industries is about a. 25% b. 10% c. 6% d. 2%
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c. 6%
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The United States' share of worldwide direct investment is about a. 10% b. 25% c. 60% d. 40%
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d. 40%
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When firms from different countries work together in a joint venture, it is referred to as a/an a. alliance b. multinational firm c. global venture d. blended deal
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a. alliance
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What invention brought about the digital age? a. computers b. the microchip c. television d. the World Wide Web
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b. the microchip
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E-commerce shifts the balance of power to a. the government b. Internet providers c. the business d. the customer
answer
d. the customer
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The economist Joseph Schumpeter suggested that business cycles are triggered by a. government policy b. innovations c. capital accumulation d. labor strikes
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b. innovations
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An example of the difficulty of protecting intellectual property on the Internet would be a. day trading b. web cams c. the copying of music from file-sharing services d. the proliferation of plagiarized papers
answer
c. the copying of music from file-sharing services
