N/A — Exam Answers

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21
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Savings should be treated as another type of

A
gross income.
B
expenditure.
C
tax.
D
net income.
22
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Though it is seen as a last resort, bankruptcy allows a consumer to

A
easily reestablish good credit.
B
eliminate certain types of debt.
C
temporarily stop paying debts.
D
receive credit in an emergency.
23

Most often, an insurance deductible must be fulfilled

A
after a company has paid a claim.
B
when sharing the cost of a payout.
C
when signing up for an insurance plan.
D
before insurance payouts begin.
24

Which best describes why governments enact tariffs?

A
to discourage consumers from purchasing foreign goods
B
to ensure that domestic producers make a profit
C
to limit the sale of foreign goods
D
to reduce the price of domestic products
25

Economists use changes in GDP to measure

A
the distances between cities.
B
the balance of trade with other countries.
C
any economic growth or shrinkage.
D
the causes of unemployment.
26

What is one reason why the government would provide financial assistance to an entrepreneur?

A
to stimulate the economy while decreasing unemployment
B
to encourage the invention and development of products
C
to decrease the high rate of failure of new businesses
D
to limit the amount of personal funds used to start the business
27

Public property is land or goods

A
used to gain personal wealth.
B
owned by the government.
C
used for private businesses.
D
owned by an individual.
28

Which occurs during disequilibrium? Choose two correct answers.

A
Supply and demand set prices.
B
Supply is less than demand.
C
Supply and demand set production.
D
Supply and demand meet.
E
Supply is greater than demand.
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

How do trade agreements help the countries involved?

A
by expanding tax revenues
B
by restricting imports
C
by accelerating production
D
by decreasing trade barriers
31

Embargoes, quotas, and standards are tools that countries use

A
to raise prices of domestic goods.
B
to reduce exports.
C
to punish other countries.
D
to restrict imports.
32

Businesses can use globalization to their advantage by

A
creating trade barriers to other countries.
B
finding customers in other countries.
C
reducing exports to other countries.
D
insourcing jobs in other countries.
33

What is the role of the three questions of economics?

A
to assess product profitability
B
to offset a poor economy
C
to aid in production decisions
D
to determine quality and cost
34

Economists can use new technology to

A
increase demand and consumption.
B
improve production and shipping.
C
study data and patterns.
D
create and apply automation.
35

An extended recessionary period is indicative of

A
a growing economy.
B
the end of a recession.
C
a depression.
D
the start of a recovery.
37

Which is the best definition of hyperinflation?

A
an exponential increase in the price of goods and services
B
an exponential decrease in the price of goods and services
C
a gradual increase in the price of goods and services
D
a gradual decrease in the price of goods and services
38

One common advantage of a long-term investment is

A
no risk.
B
higher liquidity.
C
higher return.
D
no liquidity.
39

Which situation is an example of comparative advantage in an international market?

A
Country A can produce 100 units of rice per acre of farmland, while Country B can only produce 70 units of rice per acre of farmland using the same resources.
B
Country A invests in a new technology while Country B chooses to invest in education.
C
Factories in Country A and Country B produce the same number of tablet computers. Country A’s factories could be used instead to build more laptops than the factories in Country B.
D
Country A decides to grow extra potatoes so they have more to export, while Country B does not grow potatoes to export.
40

A commodity in which someone invests might include a

A
natural resource.
B
certificate of deposit.
C
mutual fund.
D
thriving company.

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