AnswersEconomics - PathwaysInflation and Stagflation

Inflation and Stagflation — Unit test Answers

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1
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A goal of financial regulatory agencies is to

A
prevent monopolies.
B
enforce workplace safety.
C
protect the environment.
D
enforce food safety.
2
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The most efficient way to ensure that producers are responsible for products is through

a
advertising.
l
legislation.
l
labeling.
c
compliance.
3

Which of these is most likely the US government’s aim in taxing imported goods?

A
to protect domestic businesses
B
to decrease international trade
C
to end reliance on foreign goods
D
to make US markets less desirable
4

Which is a function of regulatory agencies?

e
encouraging business compliance
c
creating legislation for businesses
e
encouraging negative externalities
c
creating new business opportunities
5

The Food and Drug Administration sets standards for

A
advertising.
B
product labeling.
C
the environment.
D
traffic safety.
6

The chart shows taxable income.

Question illustration
A
Income is what a person earns, while taxable income reflects deductions subtracted for relevant expenses.
B
Income is what a person earns, while taxable income reflects what is left after paying federal taxes.
C
Income is what a person earns, while taxable income reflects what is left after paying local and state taxes.
D
Income is what a person earns, while taxable income reflects what is received from the IRS in a tax refund.
7

The inflationary spiral explains the causes and effects of high inflation. The spiral usually begins with an increase in demand. What is the direct effect of this increase?

A
Producers raise prices to continue to make a profit.
B
The government prints more money, lowering the value of money.
C
Workers negotiate with employers to receive more money.
D
Consumers need higher wages to keep up with rising prices.
8

withholding amountincome taxtax rate

A
withholding amount
B
income tax
C
tax rate
9

Federal Reserve interest federal fundsloan interest

A
Federal Reserve interest
B
federal funds
C
loan interest
10

The Fed’s use of open market operations affects banks’

i
interest rates.
m
money available to lend.
l
lending practices.
s
stability.
11

Which of these responsibilities is performed by the US Department of Education?

e
enforcing laws for SNAP program
o
operating public schools daily
d
determining what must be taught in all schools
p
providing federal funding to states for education
12

Which statement about Medicare is most accurate?

A
Medicare’s only requirement is being an adult who has paid taxes.
B
Medicare is administered by state governments.
C
Medicare provides free medical care for all enrollees.
D
Medicare provides medical assistance to senior citizens.
13

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.
14

most

I
It is controlled only by the federal government.
A
All funding comes from the state.
I
It is set by multiple levels of the government.
A
All policies are determined by local school boards.
15

Which best describe the Supplemental Nutrition Assistance Program? Select 3 options. It is funded by state governments.It is primarily based on need. It is a public assistance program. It used to be known as “food stamps.”It is not really affected by economic ups and downs.It is designed for people over the age of 65.

A
It is funded by state governments.
B
It is primarily based on need.
C
It is a public assistance program.
D
It used to be known as “food stamps.”
E
It is not really affected by economic ups and downs.
F
It is designed for people over the age of 65.
16

Which best explains how contractionary policies can hamper economic growth?

A
They increase consumer demand.
B
They can increase inflation.
C
They reduce taxes which raises deficits.
D
They reduce disposable income.
17

best

I
It sells more securities.
I
It charges banks more interest.
I
It increases reserve requirements.
I
It increases the money supply.
18

A purpose of government regulation in a mixed-market economy is to protect

A
property rights.
B
corporate rights.
C
monetary rights.
D
states' rights.
19

Sales tax is calculated

A
based on the number of items purchased.
B
using a percentage of the price of an item.
C
before a sale discount is applied.
D
as a percentage based on federal law.
20

best

r
regressive tax
i
indirect tax
d
direct tax
p
proportional tax

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