Answers26-27 Ignite Economics-KY-EconomicsBanking

Banking — Unit test Answers

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Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Select two options.cyclically unemployeddomestically unemployedfrictionally unemployedstructurally unemployedstill employedunemployed

A
cyclically unemployed
B
domestically unemployed
C
frictionally unemployed
D
structurally unemployed
E
still employed
F
unemployed
2
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To barter means to

A
sell.
B
create.
C
trade.
D
earn.
3

best

t
the interactions between producers and consumers
t
the change in production cost
m
macroeconomic trends
s
supply and demand trends
4

Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?

A
Gasoline costs more to produce and purchase than tomatoes.
B
Gasoline is imported from other nations at a higher rate than tomatoes.
C
Americans purchase many more boxes of tomatoes than barrels of gasoline.
D
Americans spend more money on gasoline than tomatoes, on average.
5

Stagflation occurs when high inflation combines with

A
high unemployment and a low level of production.
B
low unemployment and a high level of production.
C
a drop in buying power and a rise in workers’ wages.
D
a rise in buying power and a drop in workers’ wages.
6

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.
7

Which of these scenarios involves commodity money?

A
A girl writes a check to her friend for a stack of valuable comic books.
B
A boy starts a lemonade stand and sells each drink for twenty-five cents.
C
A woman offers her neighbor a US silver dollar in exchange for a bicycle.
D
A man buys some T-shirts and pays with a US fifty-dollar bill.
8

Which statement best describes why it is difficult to sell a home during a recession?

M
Mortgage rates are high.
D
Demand greatly decreases.
M
Mortgages become unavailable.
H
Housing prices increase.
9

What might cause a change in the value of fiat money?

A
a change in the value of commodities
B
a change in government regulations
C
a change in materials used to make money
D
a change in individuals’ spending habits
10

What is one consequence of stagflation?

A
The economy drastically slows down as money loses its buying power.
B
Producers cannot keep up with consumer interest and raise their prices.
C
There are not enough workers to meet the rising level of production.
D
Demand is too high and people spend more money than they should.
11

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
12

Typically, high inflation is a sign of

A
a healthy economy because it results from a fall in production costs.
B
a healthy economy because it results from a rise in consumer interest.
C
a struggling economy because wages cannot keep up with the increase in prices.
D
a struggling economy because it results from a fall in consumer interest.
13

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 indicators do economists use to determine the state of the economy? Choose three answers.pricesimmigration levelsagricultural outputemployment levelsgross domestic product (GDP)

p
prices
i
immigration levels
a
agricultural output
e
employment levels
g
gross domestic product (GDP)
16

Economists use gross national product (GNP) to measure

A
economic output within a nation, regardless of ownership.
B
the output of foreign-owned businesses within a nation.
C
the output of a nation’s citizens, regardless of where they are.
D
any business activity taking place outside a country.
17

What types of investments do banks use to make a profit? Check all that apply.opening checking accountsstarting new businessesbuying stocks and bondsbuying several propertiesissuing loans to all customersbuying the rights to loans

A
opening checking accounts
B
starting new businesses
C
buying stocks and bonds
D
buying several properties
E
issuing loans to all customers
F
buying the rights to loans
18

A long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?

A
The society’s supply and demand have stagnated.
B
The society is using all of its resources efficiently.
C
The society’s needs are being fully met.
D
The society is not using all of its resources effectively.
19

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.
20

When government intervention makes currency worthless, this condition is called

A
deflation.
B
hyperinflation.
C
cost-push inflation.
D
demand-pull inflation.
21

In the United States, dollar bills, nickels, and dimes are

A
representative money.
B
commodity money.
C
various currencies.
D
different denominations.

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