AnswersAcademy - Economics and Personal FinanceUnit Test

Unit Test Answers

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21
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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
22
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What is one main objective in the study of economics?

A
recognizing the types of services available to everyone
B
recognizing the relationship between producers and consumers
C
recognizing the reasons why consumers supply services
D
recognizing the difference between producers and consumers
23

Economists can use new technology to

A
study data and patterns.
B
create and apply automation.
C
improve production and shipping.
D
increase demand and consumption.
24

Which is the best definition of hyperinflation?

A
a gradual decrease in the price of goods and services
B
a gradual increase 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
25

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

A
Advertising coaxes people to buy new products.
B
Advertising alerts consumers to price reductions.
C
Advertising undermines competition.
D
Advertising informs brand knowledge.
26

Which best defines a service?

A
a task that is performed in exchange for payment
B
an object that is acquired
C
a plan that is executed
D
an image that is drawn
27

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.
28

Which best describes why a company issues stocks?

A
to increase the company’s value
B
to ensure profits
C
to increase dividends
D
to raise capital
29

Economic policy must strike a balance between ideals and

A
freedom.
B
needs.
C
supply and demand.
D
private property.
30

What is one way that technology can improve the production of goods?

A
Websites can allow consumers to purchase goods online.
B
Container ships can transport a number of goods at once.
C
Automation can create goods more cheaply and easily.
D
Airlines can send goods from one place to another.
31

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
32

The US Department of Education reaches its goals by

A
delegating responsibility to state and local leaders.
B
depending on other organizations to create new policy.
C
supporting the efforts of state and local leaders.
D
overseeing individual districts and schools directly.
33

Economists use changes in GDP to measure

A
the balance of trade with other countries.
B
any economic growth or shrinkage.
C
the causes of unemployment.
D
the distances between cities.
34

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.
35

Who was Adam Smith?

A
He was a philosopher who promoted the idea of free enterprise.
B
He was an economist who spoke against the market economy.
C
He was an official who ran an important government agency.
D
He was a producer who operated a factory in Scotland.
36

John Maynard Keynes developed new economic theories in response to the

A
stock market crash of 1929.
B
Great Depression of the 1930s.
C
first and second world wars.
D
economic boom of the 1950s.
37

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.
38

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.
39

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.
40

A certificate of deposit pays a higher interest rate than a savings account because the money is

A
guaranteed by the government.
B
kept by banks for a longer time period.
C
loaned to banks by consumers.
D
immediately available to consumers.

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