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1
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How does a high unemployment rate affect the economy?

A
A high unemployment rate has little effect.
B
A high unemployment rate has a very negative effect.
C
A high unemployment rate has no effect.
D
A high unemployment rate has a very positive effect.
2
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Ivan works for an automobile factory that exports cars around the world. The government manages the factory, and he lives in housing provided by the city. Ivan most likely lives in

A
a pure market economy with no government regulation.
B
a closed economy with limited government regulation.
C
a mixed market economy with some government regulation.
D
a command economy with heavy government regulation.
3

In a mixed market economy, a fire breaks out in a sneaker factory. The repair work most likely will be paid by

A
the state agency that operates the factory.
B
the government group that runs the factory.
C
the city official who manages the factory.
D
the private citizen who owns the factory.
4

A wealth gap is an economic difference between

A
businesses.
B
governments.
C
economic classes.
D
nations.
5

What is one possible effect of high unemployment in a mixed market economy?

A
A lack of income will weaken the buying power for many people.
B
New government-run farms and factories will open to provide work.
C
The government will intervene to appoint new jobs to workers.
D
The wealth gap between the upper and lower classes will decrease.
6

Critics of the wealth gap might argue that

A
economic growth will likely decline over time.
B
the upper classes cannot help create new jobs.
C
the wealthy become unable to make investments.
D
buying power exceeds the supply from producers.
7

In a mixed market economy, property owned by an individual

A
can help promote personal wealth.
B
can be used by all citizens.
C
can be run by a city or state.
D
can be used by government workers.
8

In a mixed market economy, property owned by the government

A
can be used by many citizens.
B
can be used for private businesses.
C
can cause economic inequality.
D
can help promote personal wealth.
9

What is one counter-argument to the premise that the wealth gap is a serious problem which needs to be addressed?

A
Poor people can easily move into the middle class.
B
Investments by the upper class create lower-class jobs.
C
Buying power sharply increases for the working class.
D
The lower classes have the opportunity to invest.
10

Gabriela owns a company that makes silk scarves. She buys the silk from an overseas supplier and is subject to a tax on imported goods. Gabriela most likely lives in

A
a command economy with heavy government regulation.
B
a pure market economy with no government regulation.
C
a closed economy with limited government regulation.
D
a mixed market economy with some government regulation.

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Pretest Answers — Economics