AnswersFL-2106310-United States GovernmentPrescriptive Test

Prescriptive Test — Cumulative exam Answers

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Who was known as the "Father of Economics,” whose ideas of free markets inspired classical economic thinkers?

A
John Keynes
B
Milton Friedman
C
Friedrich Hayek
D
Adam Smith
82
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Corporate taxes are a type of

A
income tax.
B
property tax.
C
sales tax.
D
excise tax.
83

It’s important for countries to exchange currencies so that goods from other nations can be

A
manufactured.
B
destroyed.
C
traded.
D
regulated.
84

High government expenditures can lead to a bigger

A
revenue.
B
stimulus.
C
deficit.
D
surplus.
85

Assessing opportunity cost involves

A
making choices and dealing with consequences.
B
choosing consequences over rewards.
C
reviewing past decisions and changing them.
D
minimizing profit and loss.
86

sales taxtariffexcise tax

A
sales tax
B
tariff
C
excise tax
87

John Maynard Keynes believed that governments should increase spending in order to

A
increase prices.
B
increase supply.
C
decrease demand.
D
increase demand.
88

What is the best definition of profit?

A
Profit is the possible income from producing an additional item.
B
Profit is the price of producing one additional unit of a good.
C
Profit is the additional income gained from selling an additional good.
D
Profit is the financial gain from business activity minus expenses.
89

Friedrich Hayek believed that

A
behaviors could be easily predicted.
B
individuals could not influence the economy.
C
the economy is simply explained through behaviors.
D
the economy is too complicated to apply aggregates.
90

The graph shows excess demand.Which needs to happen in order to stop disequilibrium from occurring?

Question illustration
A
Q needs to be coordinated with supply.
B
Q needs to be coordinated with demand.
C
The price of goods needs to be increased.
D
The price of goods needs to be decreased.
91

The graph shows a demand curve.What does the data shown in this graph represent?

Question illustration
a
a decrease in quantity demanded as prices decrease
a
an increase in price as quantity demanded decreases
a
a decrease in income as quantity demanded increases
a
an increase in quantity demanded as prices decrease
92

What is one example of a closed economy?

A
a barter system that does not rely on money or other currency
B
a restricted system that blocks trade with international partners
C
a trade-based system that encourages the flow of goods and services
D
an old-fashioned system that preserves traditional choices and customs
93

Property taxes are usually determined based on

t
the property owner's income.
t
the amount of money invested in the property.
t
the earnings generated by the property.
t
the value of the property.
94

How do trade agreements help the countries involved?

A
by restricting imports
B
by accelerating production
C
by expanding tax revenues
D
by decreasing trade barriers
95

Look at the equation framework.

Question illustration
r
revenue, profit, opportunity cost
p
profit, revenue, production cost
p
production cost, profit, revenue
o
opportunity cost, revenue, profit
96

A regulatory agency that attempts to limit risk in the banking system is

A
the FDA.
B
the EPA.
C
the OCC.
D
the HHS.
97

What is the full name of the US central bank, known as the Fed?

A
the Federal Reserve Bank
B
the Federal Deposit Insurance Corporation
C
the Federal Financial Institution
D
the Federal Bank
98

Which best describes what a central bank uses monetary policy to do?

A
ensure that the government has a balanced budget
B
influence financial institutions globally
C
ensure that the government is sufficiently funded
D
steer the economy away from recession and toward growth
99

Which factors influence changes in consumer demand? Check all that apply.market shareelasticityinternational tradeclearance salesincome

A
market share
B
elasticity
C
international trade
D
clearance sales
E
income
100

The graph shows excess supply.Which explains why the price indicated by p2 on the graph is higher than the equilibrium price?

Question illustration
A
As prices rise, quantity demanded goes up.
B
As prices rise, quantity demanded goes down.
C
As prices rise, quantity demanded stays the same.
D
As prices rise, quantity demanded disappears.

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