AnswersFL-2102345-Economics with Financial Literacy HonorsUnit Test

Unit Test — Unit test Answers

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Which statement best describes the likely effects of an expansionary fiscal policy?

I
It can increase interest rates and unemployment, but lower inflation.
I
It can increase interest rates, unemployment and inflation.
I
It can reduce interest rates and inflation, but increase unemployment.
I
It can reduce interest rates and unemployment, but increase inflation.
2
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shareholderspartnersbankersboard members

A
shareholders
B
partners
C
bankers
D
board members
3

A regulatory agency that makes sure banks follow federal laws is

A
the FDIC.
B
the FDA.
C
the SEC.
D
the EPA.
5

Which of these effects of expansionary spending would a government most want to avoid?

h
higher employment
h
higher inflation
g
growth in production
g
growth in consumer spending
7

best

r
regressive tax
i
indirect tax
d
direct tax
p
proportional tax
9

Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?

A
Loan requirements will likely be relaxed.
B
Interest rates will likely decrease.
C
Housing prices will likely decrease.
D
Investment opportunities will likely improve.
10

Government regulation is intended to

A
encourage producers to take negative actions.
B
discourage producers from taking harmful actions.
C
encourage producers to follow the Constitution.
D
discourage producers from making a profit.
11

A pie chart titled Federal Government Spending in 2010 is shown. Education and health and human services has the largest piece, and veteran apostrophe s affairs has the smallest piece.

Question illustration
l
labor and transportation
v
veterans' affairs
e
education/health and human services
i
international assistance
12

A regulatory agency that protects workers is

O
OSHA.
E
EPA.
F
FDA.
S
SEC.
13

feestaxesinsuranceinterest

A
fees
B
taxes
C
insurance
D
interest
14

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
15

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.
16

A government might enact expansionary spending when it is trying to

A
increase aggregate demand for goods.
B
decrease aggregate demand for goods.
C
slow an economic expansion.
D
lower a budget deficit.
17

How is an excise tax different from a sales tax?

A
An excise tax is not deductible.
A
An excise tax applies to specific products.
A
An excise tax applies only to imported goods.
A
An excise tax is an indirect tax.
18

An entrepreneur is someone who

A
starts and runs a business.
B
is an employee of a business.
C
invents products for other businesses.
D
works for multiple developing businesses.
19

High government expenditures can lead to a bigger

A
revenue.
B
stimulus.
C
deficit.
D
surplus.
20

Governments collect taxes to ensure that

t
there is sufficient money to fund private businesses.
c
citizens contribute to meeting society's needs.
p
politicians get paid in a timely manner.
a
a government program exists for every need that arises.
21

What is one purpose of writing a business plan before entering the market?

A
to prove that the new company will be successful
B
to show that the enterprise is realistically based
C
to have a useful tool when applying for funding
D
to differentiate the new company from the competition
22

Which are examples of sole proprietorships? Check all that apply.lawyers working for a corporationdoctors in a partnershipindependent workersfranchise restaurants in a partnershiptax preparer working his own businessfreelance writers

l
lawyers working for a corporation
d
doctors in a partnership
i
independent workers
f
franchise restaurants in a partnership
t
tax preparer working his own business
f
freelance writers
23

Health care, business, retail, and education are examples of ________ industries.

s
service
e
entertainment
m
manufacturing
c
construction

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