Practice Exam Answers

38 verified answers
21
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Credit unions differ from retail banks because they are

A
owned by their employees.
B
owned and managed by private corporations.
C
owned by their members.
D
owned by shareholders who purchased stock.
22
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Which best describes why investing can be such a challenge?

A
There are no guaranteed investments.
B
There is never a sure way to protect investments.
C
All investments are totally unpredictable.
D
All investments involve major risks.
23

What part does interest play in deficit spending?

A
Governments may charge foreign countries interest when they borrow money.
B
Governments must pay interest on money they borrow when they take on debt.
C
Citizens must pay interest when their governments borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
24

Motherboards, Inc., manufactures computer parts. The company’s total revenue is

A
the total wages the company pays workers in its factories and stores.
B
the money the company earns after paying all of its production costs.
C
the amount of money the company earns from selling an individual part.
D
the amount the company receives from the sale of all of its computer parts.
25

How did NAFTA affect the economies of participating countries?

A
by raising employment rates and standards of living
B
by increasing the overall volume of production
C
by creating a balance of exports and imports
D
by creating unrestricted trade benefits
26

Which best describes why governments collect taxes?

A
to ensure surplus funds
B
to fund government programs
C
to keep the government running
D
to control the value of currency
28

Which is an example of how a denomination is divisible?

A
Five American dollars may be worth less next year.
B
Three American dollars may buy a small snack.
C
An American dollar may equal one-half of one Euro.
D
An American dollar is equal to four quarters.
29

Successful entrepreneurs contribute to the economy by

A
encouraging free trade.
B
becoming wealthy.
C
expanding markets.
D
creating business strategies.
30

Which group does the Fed serve?

A
financial institutions
B
bankers
C
government bodies
D
consumers
31

Which best describes the circular flow model?

A
The model represents the changing relationships between actors.
B
The model represents the interactions within sectors.
C
The model represents the flow of goods and services between sectors.
D
The model represents the movement of money throughout the economy.
33

Articles of partnership establish

A
how businesses can raise capital.
B
what business taxes are paid.
C
how profits and losses are divided.
D
what is included in a charter.
34

Which of these statements most accurately describes the use of currencies in different parts of the world?

A
Different countries use different currencies.
B
All countries are required to use the same currency.
C
Countries in Asia use the euro as their currency.
D
Most countries use the dollar as their currency.
35

Which best describes the relationship between consumers and producers?

A
They dislike each other.
B
They usually ignore each other.
C
They interact with each other.
D
They agree on prices.
36

The government has the right to own all land, buildings, and factories in a

A
pure market economy.
B
command economy.
C
mixed market economy.
D
closed economy.
37

Which describes an example of the economic system known as free enterprise?

A
People are free to shop around for products, but manufacturers dictate what is available.
B
Government regulations ensure that everyone has the freedom to shop for the best deals.
C
People are free to shop for the best price on products because there is open competition.
D
Government oversight of business gives people freedom to shop for the best deals.
38

Which detail is most likely to give consumers a false sense of security about using Edgozene?

A
no other diet pill offers
B
our proven supplement
C
two bottles for 29 point 9 5 dollars
D
for a limited time

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Practice Exam Answers — Economics