AnswersOC27 Economics-2102310-Sem-MeadowsUnit Test

Unit 3A Test Answers

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1
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How does demand-pull inflation differ from cost-push inflation?

A
Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.
B
Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.
C
Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.
D
Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.
2
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An increase in gross domestic product (GDP) is a sign that a country’s economy is

A
declining.
B
stagnant.
C
growing.
D
depressed.
3

Which is an effect of stagflation?

A
Trade with other economies increases.
B
The value of a country’s currency drops.
C
Prices for goods fall sharply and suddenly.
D
The GDP rises along with production levels.
4

This circle graph shows historical information about Bolivia’s workforce. What does the graph indicate about Bolivia’s labor force in 2010?

Question illustration
A
Industry contributed to one-third of the country's total GDP.
B
Industry workers made up the smallest share of the workforce.
C
The majority of people at this time worked in agriculture.
D
The services sector provided the highest salary.
5

The equation calculates an annual rate in economics.What rate does the equation calculate?

Question illustration
A
employment rate
B
inflation rate
C
demand rate
D
supply rate
6

Demand-pull inflation happens when the demand for goods

A
remains very low.
B
shifts up and down.
C
matches the supply.
D
increases.
7

Exchange rates can indicate economic health by

A
showing exactly how much of each nation’s currency is liquid.
B
revealing how much of each nation’s income goes to savings.
C
showing the relative strength of different nations’ currencies.
D
examining spending patterns across nations and continents.
8

Which term refers to the possibility of an investor losing some or all of an investment?

r
risk
l
likelihood
p
probability
c
chance
9

A currency’s exchange rate is

A
how many denominations the currency has.
B
its stable rate as established by the government.
C
how easily it can be divided into other currencies.
D
its changing value relative to other currencies.
10

The graph shows changes in GDP in the United States from 2009 to 2011.How did the contribution of the services sector to GDP change between 2009 and 2011?

Question illustration
A
It rose by less than 1 percent.
B
It fell significantly.
C
It rose significantly.
D
It stayed exactly the same.
11

What area of economics focuses on the interactions between individual consumers and producers?

A
aggregates
B
macroeconomics
C
microeconomics
D
markets
12

Are the buying and selling of stocks centralized activities? Why or why not?

A
Yes, the New York Stock Exchange is the primary exchange for all the world’s most important trades.
B
No, people can buy stocks anywhere, and they do not need to go through a market.
C
Yes, the world’s stock markets are coordinated exchanges, and they are dependent on one another.
D
No, there are many stock markets around the world, and they are independent of one another.
13

Which describes an investor’s primary goal of buying a loan?

A
to grow a business
B
to earn a profit off the interest
C
to bolster the economy
D
to provide capital to a business
14

Read a passage from a speech given by President Barack Obama.Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit . . . And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits.–President Barack Obama, February 4, 2009

A
It describes government measures to stimulate demand and bring about a recovery.
B
It describes government measures to increase production and bring about a depression.
C
It describes a shift in government policies during a trough on the business cycle.
D
It describes a shift in government policies during a peak on the business cycle.
15

What is the relationship between aggregate demand and the price level?

A
They are inversely related.
B
They are directly related.
C
They are unrelated.
D
They fluctuate randomly.
16

This graph shows merchandise export data for the years 2010 through 2012.Which statement most accurately describes the information presented on the graph?

Question illustration
A
The United States exported more merchandise than any other nation.
B
The United States exported more than $2 trillion worth of goods in 2012.
C
China exported more goods than the United States from 2010 to 2012.
D
China exported more than $2 trillion in goods for each year on the graph.
17

Which best describes what generally occurs in financial markets?

A
Debt and loans are traded.
B
Assets are traded.
C
Commodities are traded.
D
Shares are traded.
18

Which of these scenarios involves commodity money?

A
A girl writes a check to her friend for a stack of valuable comic books.
B
A boy starts a lemonade stand and sells each drink for twenty-five cents.
C
A woman offers her neighbor a US silver dollar in exchange for a bicycle.
D
A man buys some T-shirts and pays with a US fifty-dollar bill.
19

When economists determine that a nation’s GDP has declined, they can point to this as a sign of

A
economic shrinkage.
B
economic growth.
C
low unemployment.
D
poor leadership.
20

Which indicators do economists use to determine the state of the economy? Choose three answers.pricesimmigration levelsagricultural outputemployment levelsgross domestic product (GDP)

p
prices
i
immigration levels
a
agricultural output
e
employment levels
g
gross domestic product (GDP)

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