AnswersOC27 Economics-2102310-Sem-MeadowsUnit Test

Unit 3A Test Answers

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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.
62
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When discussing a loan, interest rates are expressed as a percentage of the

A
investment fees.
B
the principal.
C
the profit.
D
taxes owed.
63

Which is the best definition of inflation?

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
64

In macroeconomics, the economy can best be understood through the use of

A
money.
B
models.
C
pricing.
D
debates.
65

Which scenario is an example of cost-push inflation?

A
Consumers have more money to buy cars, and the prices of cars and car parts rise as a result.
B
An increase in workers’ wages raises the production cost of cars, and car prices rise as a result.
C
The demand for cars falls as consumers have less disposable income, and car prices fall as a result.
D
A government bailout helps car manufacturers lower their costs, and car prices fall as a result.
66

Putting money into more than one kind of investment at a time is called

A
liquidity.
B
sunken cost.
C
diversification.
D
compound interest.
67

Why are imports, which bring goods into a country, considered a leakage factor?

A
Imports do not generate domestic income.
B
Domestic industry loses ground as imports increase.
C
Imports are taxed heavily, which is a secondary leakage factor.
D
The money paid to producers of imports leaves the country.
68

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
A
There is no link between prices and unemployment.
B
Rising unemployment rates drive prices higher.
C
Falling prices drive unemployment rates lower.
D
As unemployment rates rise, average prices fall.
69

Government regulations on credit aim to

A
ensure lenders are repaid.
B
help borrowers pay on time.
C
support those borrowing credit.
D
educate lenders about consumers.
70

Economic interactions involving which of the following would most likely be studied in macroeconomics?

A
a family’s finances
B
trade at a duty-free shop on the U.S.-Canadian border
C
International Monetary Fund policy
D
a small company’s supply contract for a local town
71

Which is an example of a short-term investment?

A
bonds
B
retirement funds
C
savings accounts
D
houses
72

What are the signs of high inflation? Check all that apply.Production begins to fall.Production begins to rise.Interest rates decrease.Interest rates increase.Purchasing power falls.Fewer fixed rate bank loans.

A
Production begins to fall.
B
Production begins to rise.
C
Interest rates decrease.
D
Interest rates increase.
E
Purchasing power falls.
F
Fewer fixed rate bank loans.
73

What is a potential disadvantage of using debit cards when compared to barter and traditional currency?

A
collaborative
B
wide acceptance
C
ease of overspending
D
more privacy and flexibility
74

The graph shows unemployment rates in the United States in recent years.Which statement is the most accurate explanation of the information on the graph?

Question illustration
A
Unemployment rates rise and fall in predictable patterns.
B
Unemployment will never again be as high as it was in 2010.
C
The United States suffered an economic downturn starting in 2009.
D
The United States does not have to worry about unemployment.
75

Clarissa and Carlos are homeowners who have decided to purchase a piece of land adjacent to their home. The land is for sale for $10,000.Which loan would require them to use their vehicle as collateral?

A
title loan
B
payday loan
C
merchant loan
D
peer-to-peer loan
76

These circle graphs show information about Bolivia’s workforce and GDP.Which statement summarizes the information on these graphs?

Question illustration
A
Many Bolivians are farmers, but agriculture makes a modest contribution to the GDP.
B
Industry in Bolivia has grown faster than the labor force can supply workers.
C
Bolivia has invested large sums of money into education to encourage economic growth.
D
Bolivia must depend on agriculture to have a healthy economic future.
77

During a recession, what is one way governments try to encourage growth?

A
by increasing unemployment benefits
B
by stopping government spending
C
by requiring firms to maintain production
D
by eliminating all tax breaks
78

A currency is a system of money created and used by

A
an individual or a group of people.
B
all people who live in the same era.
C
a nation or region of the world.
D
a town, city, or state within a region.
79

best

T
They both use taxes to support a country’s growth.
T
They both invest money to earn a profit.
T
They both receive capital to use for growth.
T
They both act as angel investors for start-ups.
80

Demand-pull inflation happens when the demand for goods

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

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