AnswersTX-Economics CRUnit Test

Fiscal Policy: Spending Answers

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22
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Which example best describes how a bank injects money into the economy?

A
A bank opens a savings account for a customer.
B
A bank approves a loan for a customer.
C
A bank buys a company’s rapidly growing stock.
D
A bank buys property in a bustling business district.
23
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Which of these scenarios involves commodity money?

A
A girl writes a check to her friend for a stack of valuable comic books.
B
A boy starts a lemonade stand and sells each drink for twenty-five cents.
C
A woman offers her neighbor a US silver dollar in exchange for a bicycle.
D
A man buys some T-shirts and pays with a US fifty-dollar bill.
24

Which best describes what injector factors bring to an economic system?

A
factors of production
B
imports
C
consumers
D
money
25

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
T
There is no link between prices and unemployment.
R
Rising unemployment rates drive prices higher.
F
Falling prices drive unemployment rates lower.
A
As unemployment rates rise, average prices fall.
26

The graph shows data for the years 2010 through 2012.Which might be a better title for this graph?

Question illustration
A
Total Exports for the United States and China
B
Trade Between China and the United States
C
Unemployment in the United States and China
D
The History of International Trade
27

Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
A
An investor makes money by earning interest.
A
An investor makes money by raising capital.
A
An investor makes money by being repaid for the principal.
28

Which is true about investments and risk?

A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.
29

What is a potential disadvantage of using debit cards when compared to barter and traditional currency?

A
collaborative
B
wide acceptance
C
ease of overspending
D
more privacy and flexibility
30

Which unemployment rate do most economists consider to be acceptable in the United States?

A
0 percent
B
5 percent
C
10 percent
D
20 percent
31

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.
32

What might cause a change in the value of fiat money?

A
a change in the value of commodities
B
a change in government regulations
C
a change in materials used to make money
D
a change in individuals’ spending habits
33

Which is an advantage of using modern currency instead of a barter system?

A
risk of a loss in value or counterfeiting
B
difficulty in determining the value of goods
C
ability to store and use a form that is accepted everywhere
D
a limited amount of goods and services available
34

Which term refers to the possibility of an investor losing some or all of an investment?

r
risk
l
likelihood
p
probability
c
chance
35

How is using money related to bartering?

A
It is a substitute for bartering.
B
It is the opposite of bartering.
C
It is a newer form of bartering.
D
It is an old form of bartering.
36

What can be traded in a commodities market?

A
stock
B
bonds
C
oil
D
debt
37

Which describes an investor’s primary goal of buying a loan?

A
to grow a business
B
to earn a profit off the interest
C
to bolster the economy
D
to provide capital to a business
38

The circular flow model examines interactions between which two groups?

A
households and firms
B
households and consumers
C
firms and producers
D
firms and government
39

Since stocks can be traded online, which purpose is best served by markets?

A
Markets regulate transactions.
B
Markets are where the trades actually occur.
C
Markets sell the assets to be traded.
D
Markets ensure that the transactions are secure.
40

Banks pay interest to customers through a

A
savings account.
B
credit card account.
C
mortgage account.
D
401k account.
41

Read a passage from a speech given by President Barack Obama.Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit . . . And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits.–President Barack Obama, February 4, 2009

A
It describes government measures to stimulate demand and bring about a recovery.
B
It describes government measures to increase production and bring about a depression.
C
It describes a shift in government policies during a trough on the business cycle.
D
It describes a shift in government policies during a peak on the business cycle.

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