AnswersOR-Grade 8 US HistoryMaking Spending Decisions

Making Spending Decisions — Cumulative exam Answers

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21
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The graph shows a point of equilibrium.What is the price at which equilibrium is achieved?

Question illustration
A
$8
B
$9
C
$10
D
$30
22
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Which best describes one of the primary aims of government fiscal policy?

A
to restrict price changes
B
to put more money into citizens’ hands
C
to generate new investment opportunities
D
to control real interest rates
23

In a mixed market economy, what is a typical way the government can reduce unemployment?

A
The government can pay for projects to create work.
B
The government can control new factories to provide jobs.
C
The government can create new farm fields to hire workers.
D
The government can raise taxes to encourage employment.
24

Which economic indicators are used to measure the global economy? Choose four answers.purchasing power paritytrade volumesspending power paritylabor market datagross domestic producttrade deficits and surpluses

A
purchasing power parity
B
trade volumes
C
spending power parity
D
labor market data
E
gross domestic product
F
trade deficits and surpluses
25

Compound interest is usually better than simple interest because it pays

A
interest on the principal and the interest earned in each period.
B
interest on the entire principal rather than the interest in each period.
C
more, as it is matched by an employer’s 401k contribution.
D
more often throughout the year rather than once a year.
26

The chart shows the marginal cost of producing apple pies.This chart demonstrates that the marginal cost

Question illustration
A
initially decreases as production increases.
B
initially increases as production increases.
C
eventually decreases as production increases.
D
eventually increases as production decreases.
27

An extended recessionary period is indicative of

A
a depression.
B
the start of a recovery.
C
a growing economy.
D
the end of a recession.
28

Read the charts.

Question illustration
A
The federal government relies heavily on payroll taxes and states do not.
B
The federal government collects excise taxes and states do not.
C
State budgets rely heavily on individual income taxes and the federal budget does not.
D
State budgets require less from other taxes than the federal budget does.
29

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.
30

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.
31

Jacob is considering buying a new car. Which nonrenewable resource should influence the decision?

A
labor
B
water
C
minerals
D
petroleum
32

Angela is considering buying stock in a popular computer software company whose price has dropped significantly in the last year. Why might this be a wise move for Angela to make?

A
because it is smart to buy when prices are high and sell when prices are low
B
because it is smart to buy when prices are low and sell when prices are high
C
because her investment will be guaranteed by the government if the company fails
D
because the company will rebound because she likes to use the products they sell
33

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
34

What is an example of scarcity

A
an abundance of resources
B
limited resources
C
renewable resources
D
a choice of resources
35

Savings should be treated as another type of

A
gross income.
B
net income.
C
tax.
D
expenditure.
36

When does government regulate producers in a mixed-market economy?

A
always
B
as needed
C
as requested
D
never
37

An income is measured as

A
all money received, including gifts, in the course of a year.
B
an amount spent in one week’s time.
C
an amount received in a specific period: weekly, biweekly, or yearly.
D
all money saved during a year’s time.
38

Which best describes why governments enact tariffs?

A
to reduce the price of domestic products
B
to discourage consumers from purchasing foreign goods
C
to limit the sale of foreign goods
D
to ensure that domestic producers make a profit
39

Insurance offers consumers

A
protection from the costs of unplanned events.
B
a guarantee that a business will succeed.
C
income to help start a new business venture.
D
full reimbursement after business setbacks.
40

A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why?

A
The price will fall to encourage consumers to continue to purchase it.
B
The price will rise to encourage the producer to make more old models.
C
The price will fall to discourage the producer from making more old models.
D
The price will rise to encourage consumers to buy both models in equal amounts.

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