AnswersHSA 26-27 EconomicsCharitable Organizations

Charitable Organizations — Unit test Answers

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21
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Many classical economists such as Adam Smith believed that government should

A
intervene often in the economy.
B
intervene little in the economy.
C
always intervene in the economy.
D
totally control the economy.
22
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similardifferentallrandom

A
similar
B
different
C
all
D
random
23

producersconsumersgovernmentprices

A
producers
B
consumers
C
government
D
prices
24

What part does interest play in deficit spending?

A
Governments must pay interest on money they borrow when they take on debt.
B
Citizens must pay interest when their governments borrow money.
C
Governments may charge foreign countries interest when they borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
25

Which best describes a regressive tax?

A
a tax that charges low-income earners a lower percentage than high-income earners
B
a tax that charges an equal percentage to all
C
a tax that charges earners based on their professions
D
a tax that charges high-income earners a lower percentage than low-income earners
26

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
27

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
People are free to shop for the best price on products because there is open competition.
C
Government oversight of business gives people freedom to shop for the best deals.
D
Government regulations ensure that everyone has the freedom to shop for the best deals.
28

Which federal regulatory agency would most likely bring a civil suit against a business that broke securities laws?

A
the SEC
B
the FDA
C
OSHA
D
the FDIC
29

Which statement explains a way how the Securities and Exchange Commission upholds fair business practices?

T
The SEC makes sure that banks follow federal laws.
T
The SEC tries to limit risk in the financial system.
T
The SEC generally oversees banking practices.
T
The SEC generally oversees financial advisers.
30

To be successful, what must an entrepreneur be willing to invest? Check all that apply.moneyunemploymentpersonal safetytimeconsiderable effort

A
money
B
unemployment
C
personal safety
D
time
E
considerable effort
31

Which of these are goals of an expansionary policy? Check all that apply.increased available creditdecreased available creditincreased money supplyincreased inflationincreased interest ratesdecreased interest rates

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates
32

Two doctors who join forces in business form a.

Answer not available
33

Which best describes a difference between the views of Milton Friedman and John Maynard Keynes on the economy?

A
Friedman said that monetary policy should be used to influence aggregate demand, while Keynes believed the best approach was fiscal policy.
B
Friedman said that fiscal policy should be used to influence aggregate demand, while Keynes believed the best approach was monetary policy.
C
Keynes believed in little government intervention in the economy, while Friedman said government should play an active role.
D
Keynes believed the economy was too complicated to think of aggregates, while Friedman said higher aggregate demand could solve issues.
34

US federal income tax is progressive by law, but which best explains why wealthy individuals can often pay far less in taxes than the top tax rate?

A
High-income earners can fight in court for the right to a reduced rate.
B
High-income earners reduce their tax rates through numerous deductions.
C
High-income earners use tax laws to their advantage to reduce their tax rates.
D
High-income earners always place their assets overseas to lower their tax rates.

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