AnswersTX-Environmental Systems A-CRPrescriptive Test

Prescriptive Test — Cumulative exam Answers

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1
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Why do most nations use fiat money today?

A
Governments are able to exert control over the value of fiat money.
B
Fiat money is stable and will not lose value during economic downturns.
C
Fiat money will maintain its value despite fluctuating exchange rates.
D
Governments know that fiat money derives its value from gold and silver.
2
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Which best describes what happens to a corporation after its founders retire?

A
It shuts down operations.
B
It transfers to new owners.
C
It continues in business.
D
It sells out to shareholders.
3

In which situation would a savings account be the best investment to earn interest?

A
when you need to make frequent payments for bills
B
when you have to pay monthly installments for a loan
C
when you need immediate access to cash
D
when you want to buy a new car in 3 years
4

How does a socialist government with a command economy manage its economy?

A
The government lets producers set wages for workers.
B
The government owns all homes and other forms of housing.
C
The government allows consumers to make their own choices.
D
The government controls factories and other forms of production.
5

Besides the actual mortgage payment, which also factors into the monthly payment on a home?

A
repair costs
B
renters' insurance
C
property taxes
D
down payment
6

Which statement best explains a scholarship?

A
A scholarship is federal money awarded to a student.
B
A scholarship is aid given to a student by an institution.
C
A scholarship is money borrowed to pay for an education.
D
A scholarship is the price of attending classes at a school.
7

Gross domestic product (GDP) is the value of goods and services produced in a country annually. It can best be described as measuring an economy’s

A
total product.
B
total demand.
C
total input.
D
total output.
8

When the government injects money into the economy, consumers may have more disposable income, which may lead to

A
higher unemployment.
B
higher production.
C
lower production.
D
increases in taxes.
9

In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new or better product.
10

An interest in supervising other workers would be useful for someone who wanted to become

A
an office manager or warehouse manager.
B
a freelance writer or graphic designer.
C
a grocery clerk or supermarket cashier.
D
a letter carrier or delivery person.
11

Which of these is not a main advantage for a business joining a cooperative?

A
Lower costs for purchasing supplies
B
Pooling products for better selling prices
C
Sharing costs for needed services
D
Having a larger vote than smaller companies
12

Businesses can use globalization to their advantage by

A
creating trade barriers to other countries.
B
reducing exports to other countries.
C
finding customers in other countries.
D
insourcing jobs in other countries.
13

Which are indicators that economists use to measure how an economy grows? Select two options.monitoring election resultsmeasuring how much the economy producesmonitoring the popularity of different music groupsstudying the economy of another countrytracking the unemployment rate

A
monitoring election results
B
measuring how much the economy produces
C
monitoring the popularity of different music groups
D
studying the economy of another country
E
tracking the unemployment rate
14

Why is the slow growth that can result from a contractionary policy a positive effect?

A
It can increase loan interest rates.
B
It can decrease available credit.
C
It can increase the money supply.
D
It can decrease inflation.
15

worthlessplentifulelasticinelastic

A
worthless
B
plentiful
C
elastic
D
inelastic
16

The Fed may respond to a recession by

A
discouraging consumer borrowing.
B
decreasing interest rates.
C
decreasing government spending.
D
decreasing available credit.
17

When it spends money on education, a government is trying to

A
find a way to meet a social need.
B
encourage immediate economic growth.
C
meet a social need and improve the economy.
D
find a way to spend budget surpluses.
18

Which situation is an example of comparative advantage in an international market?

A
Country A decides to grow extra potatoes so they have more to export, while Country B does not grow potatoes to export.
B
Factories in Country A and Country B produce the same number of tablet computers. Country A’s factories could be used instead to build more laptops than the factories in Country B.
C
Country A invests in a new technology while Country B chooses to invest in education.
D
Country A can produce 100 units of rice per acre of farmland, while Country B can only produce 70 units of rice per acre of farmland using the same resources.
19

If expansionary taxation policies are left unchecked, which is the most likely result?

A
reduced profits
B
high inflation
C
reduced production
D
reduced disposable income
20

The graph below shows the value of the US dollar versus the Canadian dollar.

Question illustration
A
October 2012.
B
November 2012.
C
February 2013.
D
March 2013.

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