N/A — Exam Answers

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Why would a consumer choose to pay cash?

A
to take advantage of low interest
B
to spread payments out over time
C
to avoid saving for a down payment
D
to pay the lowest possible price
4

Businesses can use globalization to their advantage by

A
finding customers in other countries.
B
reducing exports to other countries.
C
creating trade barriers to other countries.
D
insourcing jobs in other countries.
5

If it becomes less expensive to travel overseas from the United States, American tourists will benefit from the fact that

A
tourist sites are getting crowded and dirty.
B
prices of foreign goods are rising.
C
the US dollar has declined in value.
D
the US dollar has become stronger.
6

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.
7

What is an example of scarcity

A
limited resources
B
renewable resources
C
an abundance of resources
D
a choice of resources
8

Which best describes why governments enact tariffs?

A
to limit the sale of foreign goods
B
to discourage consumers from purchasing foreign goods
C
to ensure that domestic producers make a profit
D
to reduce the price of domestic products
10

If Country A is an agricultural country and Country B has many cities and factories, it would make sense for

A
both countries to compete in growing more corn.
B
both countries to set up car manufacturing plants.
C
Country A to specialize in growing corn while Country B specializes in making cars.
D
Country A to specialize in making cars while Country B specializes in growing corn.
11

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 discourage the producer from making more old models.
B
The price will fall to encourage consumers to continue to purchase it.
C
The price will rise to encourage consumers to buy both models in equal amounts.
D
The price will rise to encourage the producer to make more old models.
15

An extended recessionary period is indicative of

A
a growing economy.
B
a depression.
C
the start of a recovery.
D
the end of a recession.
16

What is the role of the three questions of economics?

A
to assess product profitability
B
to determine quality and cost
C
to offset a poor economy
D
to aid in production decisions
17

An income is measured as

A
an amount spent in one week’s time.
B
all money saved during a year’s time.
C
an amount received in a specific period: weekly, biweekly, or yearly.
D
all money received, including gifts, in the course of a year.
18

Which are indicators that economists use to measure how an economy grows? Choose two correct answers.

A
measuring how much the economy produces
B
monitoring the popularity of different music groups
C
monitoring election results
D
tracking the unemployment rate
E
studying the economy of another country
19

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
20

Corporate taxes are a type of

A
income tax.
B
excise tax.
C
sales tax.
D
property tax.
21

Insurance offers consumers

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

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