Prescriptive Test — Cumulative exam

Question 1

The chart below shows an exchange rate table.

Revolt · Accepted Answer

The value of each currency is shown in relation to the US dollar.

Question 2

Supply and demand coordinate to determine prices by working

Revolt · Accepted Answer

together.

Question 3

What is a potential negative effect of an expansionary policy?

Revolt · Accepted Answer

increased inflation

Question 4

Disequilibrium occurs when

Revolt · Accepted Answer

quantity supplied does not equal quantity demanded.

Question 5

Governments collect taxes to ensure that

Revolt · Accepted Answer

citizens contribute to meeting society's needs.

Question 6

Monetarism plays a role in economic growth by

Revolt · Accepted Answer

influencing the supply of money.

Question 7

Which best describes how advertising influences consumer choice in an oligopoly?

Revolt · Accepted Answer

Advertising informs brand knowledge.

Question 8

Why did Friedrich Hayek call expansionary spending dangerous?

Revolt · Accepted Answer

He felt it could lead to inflation and poor decisions by consumers.

Question 9

Compound interest is usually better than simple interest because it pays

Revolt · Accepted Answer

interest on the principal and the interest earned in each period.

Question 10

If investors can earn 10 percent interest in an account in Mexico but just 3 percent in the United States, those investors will most likely

Revolt · Accepted Answer

want to invest in Mexico, which will cause the peso to appreciate.

Prescriptive Test — Cumulative exam Answers