AnswersEconomicsAggregate Economic Behavior and the Global Economy

Aggregate Economic Behavior and the Global Economy — Test Answers

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1
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Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

A
reduced incomes
B
stagnant prices
C
ambivalence about the economy
D
high levels of production
2
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Why do countries provide financial incentives?

A
Financial incentives limit imports.
B
Financial incentives set standards.
C
Financial incentives restrict all trade.
D
Financial incentives act as trade barriers.
3

Technologies that allow for instant worldwide communication include

A
airplanes and container shipping.
B
outsourcing and new trade markets.
C
mobile phones and Internet access.
D
high-speed trains and naval ships.
4

Which statement accurately describes a developing country?

A
The country's population has a high life expectancy.
B
The country's population has a high growth rate.
C
The country has a high standard of living.
D
The country has a high GDP per capita.
5

Which statement best describes how globalization is affecting the world?

A
Countries are growing less likely to trade with one another.
B
Globalization has resulted in fewer connections among countries.
C
Globalization is growing less important as time passes.
D
The world is becoming more globalized and connected.
6

What is the most common reason why countries create trade agreements?

A
to create free trade
B
to limit imports
C
to establish quotas
D
to decrease trade
7

Which statement best describes how globalization connects the world?

A
Globalization helps create new forms of transportation, communication, and technology.
B
Globalization helps share old forms of transportation, communication, and technology.
C
Globalization helps expand old forms of transportation, communication, and technology.
D
Globalization helps mandate new forms of transportation, communication, and technology.
8

"GDP per capita" means that the GDP is calculated per

A
dollar.
B
day.
C
person.
D
country.
9

Which best describes what is represented in the business cycle model?

A
macroeconomic trends
B
the change in production cost
C
supply and demand trends
D
the interactions between producers and consumers
10

Which federal agency calculates the Consumer Price Index (CPI)?

A
US Department of the Treasury
B
US Census Bureau
C
US Department of Commerce
D
US Bureau of Labor Statistics
11

An outline for an informative essay should

A
use smooth transitions.
B
state the main topics.
C
include all relevant details.
D
use effective language.
12

Who decides which currency each country in the world uses?

A
the United States
B
the United Nations
C
the European Union
D
each individual country
13

Which is the best definition of inflation?

A
a gradual increase in the price of goods and services
B
a gradual decrease in the price of goods and services
C
an exponential decrease in the price of goods and services
D
an exponential increase in the price of goods and services
14

An increase in gross domestic product (GDP) is a sign that a country’s economy is

A
depressed.
B
stagnant.
C
declining.
D
growing.
15

Which stage of the business cycle is an economy in when it reaches its low point?

A
Trough
B
Peak
C
Contraction
D
Expansion
16

Why does the US import oil?

A
because it does not produce any oil at all
B
because it is cheaper to import oil than to produce it
C
because it has exported too much oil to nearby countries
D
because it needs higher quality oil than it produces
17

The purpose of an outline for an informative essay is to

A
explain the essay’s structure.
B
use effective language.
C
cite research materials.
D
include strong paragraphs.
18

Trade agreements are helpful because they allow countries to

A
influence foreign trade.
B
help create new trade barriers.
C
increase trade tax revenue.
D
trade for necessary goods.
19

The equation calculates an annual rate in economics. final value-initial value over initial value times 100 What rate does the equation calculate?

A
supply rate
B
demand rate
C
employment rate
D
inflation rate
20

Tariffs and subsidies are both types of

A
economic benefits for the consumer.
B
economic benefits for the international producer.
C
positive and negative incentives.
D
monetary restrictions for the domestic producer.

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