AnswersTX-Environmental Systems A-CRPrescriptive Test

International Trade Answers

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1
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Milton Friedman led a new economic school of thought called

A
laissez faire.
B
monetarism.
C
price signaling.
D
the invisible hand.
2
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Which best describes the difference between sole proprietorships and partnerships?

S
Sole proprietors keep all profits and have unlimited liability, while partners split profits and share liabilities.
S
Sole proprietors share responsibilities, while partners are responsible for only a portion of the business.
S
Sole proprietors split profits and share liabilities, while partners keep all profits and have unlimited liability.
S
Sole proprietors pay taxes only on business profits, while partners do not have to pay taxes on profits.
3

When revenues are higher than expenditures in a budget, that budget

A
shows a deficit.
B
is in balance.
C
must be discarded.
D
shows a surplus.
4

What must an entrepreneur assume when starting a business?

A
that the correct location guarantees success
B
that every product has a customer who wants it
C
that clever market strategies may still fail to sell a product
D
that raising funds is the most difficult step in starting a business
5

The graph shows how individuals affect economic growth.

Question illustration
A
They work in their own self-interest.
B
They work as part of a unified group.
C
They work to influence the money supply.
D
They work to influence the economy.
6

How are progressive taxes and regressive taxes similar?

A
Both charge high-income individuals more.
B
Both are considered flat taxes.
C
Both generate revenue for public services.
D
Both are types of indirect taxes.
7

If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased?

A
Borrowing will decrease.
B
Investing will decrease.
C
Inflation will increase.
D
Liquidity will increase.
8

What is a potential negative effect of an expansionary policy?

A
decreased borrowing
B
increased interest rates
C
increased inflation
D
decreased available credit
9

What led to Henry Ford’s success as an entrepreneur?

A
His personal wealth.
B
His innovative production methods.
C
His commitment to improving labor laws.
D
His desire to pay high wages.
10

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.
11

How did Adam Smith’s economic ideas help the United States establish a free enterprise system? Check all that apply.

A
They led to freedom of choice for consumers and producers.
B
They led to fixed prices for consumers and producers.
C
They led to open competition for consumers.
D
They led to individual ownership of property.
E
They led to more government spending and increased demand.
F
They led to limited choice and communal ownership of property.
12

Government regulation is intended to

A
encourage producers to take negative actions.
B
discourage producers from taking harmful actions.
C
encourage producers to follow the Constitution.
D
discourage producers from making a profit.
13

A diagram shows that taxes go into the government, which then go into spending.

Question illustration
G
Government Spending
T
The National Economy
T
The Federal Debt
F
Fiscal Policy
14

How do corporations raise money and resources to expand? Select THREE answers.They request a bank loan.They raise franchise fees.They cash in dividends.They agree to sell stocks.They issue bonds.

T
They request a bank loan.
T
They raise franchise fees.
T
They cash in dividends.
T
They agree to sell stocks.
T
They issue bonds.
15

Under an expansionary taxation policy, the government tries to stimulate economic growth by

A
reducing deficits.
B
reducing taxes.
C
reducing demand.
D
reducing spending.
16

How is an excise tax different from a sales tax?

A
An excise tax is not deductible.
A
An excise tax applies to specific products.
A
An excise tax applies only to imported goods.
A
An excise tax is an indirect tax.
17

Read the graph.

Question illustration
A
A company selling telephones most likely has only a 40 percent chance of surviving for at least four years.
B
A company offering physical therapy most likely has only an 80 percent chance of surviving for at least two years.
C
A company offering cleaning services most likely has only a 50 percent chance of surviving for at least eight years.
D
A company selling diabetes supplies has only a 60 percent chance of surviving for at least three years.
18

Which statements describe how the Fed responds to high inflation? Check all that apply.

A
It charges banks more interest.
B
It pays banks less interest.
C
It sells more securities.
D
It decreases the money supply.
E
It increases the money supply.
19

best

r
regressive tax
i
indirect tax
d
direct tax
p
proportional tax
20

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

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