AnswersEconomics - BJackson 25-26Unit Test

Unit Test — Unit test Answers

25 verified answers1 views
1
Free Preview

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
2
Free Preview

Which statement best describes how an investor makes money off debt?

A
An investor makes money by issuing bonds.
A
An investor makes money by earning interest.
A
An investor makes money by raising capital.
A
An investor makes money by being repaid for the principal.
3

This graph shows changes in GDP and the unemployment rate in the United States in recent years.In what year would someone looking for work have had the hardest time finding a job?

Question illustration
A
2008
B
2009
C
2011
D
2012
4

Which best describes why taxes and savings are considered leakage factors?

A
They take money out of households.
B
They take money out of the economic system.
C
They take money out of the economic sectors.
D
They take money out of the financial sector.
5

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

b
by increasing unemployment benefits
b
by stopping government spending
b
by requiring firms to maintain production
b
by eliminating all tax breaks
6

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

Question illustration
T
There is no link between prices and unemployment.
R
Rising unemployment rates drive prices higher.
F
Falling prices drive unemployment rates lower.
A
As unemployment rates rise, average prices fall.
7

What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills?

A
People would be more likely to confuse the value of currencies.
B
Exchanging money between countries would be much easier.
C
People could not charge as many different prices for goods.
D
All goods would be more expensive than they currently are.
8

Hyperinflation can occur when

A
consumers begin purchasing more goods.
B
producers need more money to make and distribute goods.
C
companies raise prices to pass on costs to consumers.
D
the government prints a ton of money in order to pay off its debt.
9

Which factors can affect a stock’s price? Check all that apply.

A
market performance
B
the company’s financial health
C
the quantity products produced
D
location of the company
E
the economy
10

Economic growth takes place when a country

A
produces a steady number of automobiles.
B
has a high unemployment rate.
C
measures its gross domestic product (GDP).
D
produces more goods and services.
11

The graph shows data for the years 2010 through 2012.Which might be a better title for this graph?

Question illustration
A
Total Exports for the United States and China
B
Trade Between China and the United States
C
Unemployment in the United States and China
D
The History of International Trade
12

Which statement best describes the circular flow model?

A
The model represents the movement of money and resources throughout the economy.
B
The model represents the interactions within sectors.
C
The model represents the flow of goods and services abroad.
D
The model represents the changing relationships between actors.
13

Which scenario is an example of demand-pull inflation?

A
Consumers have more money to buy cars, and the prices of cars and car accessories 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.
14

Which example best describes how a bank injects money into the economy?

A
A bank opens a savings account for a customer.
B
A bank approves a loan for a customer.
C
A bank buys a company’s rapidly growing stock.
D
A bank buys property in a bustling business district.
15

Which best describes what a market index does?

A
An index measures market performance.
B
An index measures economic trends.
C
An index measures growth.
D
An index measures the performance of a single stock.
16

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.
17

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

r
risk
l
likelihood
p
probability
c
chance
18

Consumers having more money to purchase computers will most likely result in

A
a decrease in prices for computers and computer accessories.
B
an increase in prices for computers and computer accessories.
C
a decrease in prices for computers, but not computer accessories.
D
an increase in prices for computers, but not computer accessories.
19

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.
20

How do central banks govern the banking industry? Check all that apply.by deciding how much banks must keep in reserveby overseeing the nation’s payment systemby supervising the loan process at banksby printing money for distribution to banksby responding quickly to banking crises that occurby auditing banks based on current regulations

b
by deciding how much banks must keep in reserve
b
by overseeing the nation’s payment system
b
by supervising the loan process at banks
b
by printing money for distribution to banks
b
by responding quickly to banking crises that occur
b
by auditing banks based on current regulations

Did you find these answers helpful?

More from this Course

Quiz
25 verified answers

Unit Test

Quiz
15 verified answers

Unit Test

Quiz
15 verified answers

Unit Test