AnswersAcademy - Economics and Personal FinanceUnit Test

Unit Test Answers

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1
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Which of the following statements most accurately describes the federal government and its employees?

M
Millions of Americans work for the federal government.
T
The federal government is not allowed to hire employees.
T
The majority of Americans are employed by the federal government.
T
The number of federal employees is too small to affect government spending.
2
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The General Theory of Employment, Interest and Money was written by

A
John Maynard Keynes.
B
Adam Smith.
C
Milton Friedman.
D
Friedrich August von Hayek.
3

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.
4

Who was known as the "Father of Economics,” whose ideas of free markets inspired classical economic thinkers?

A
John Keynes
B
Milton Friedman
C
Friedrich Hayek
D
Adam Smith
5

Which statement explains how regulations on prices affect business practices?

R
Regulations keep prices fair and prevent businesses from establishing monopolies.
R
Regulations keep prices low and help businesses to establish monopolies.
R
Regulations keep prices fair and help businesses to establish monopolies.
R
Regulations keep prices low and prevent businesses from establishing monopolies.
6

best

l
limiting inflation and reducing unemployment
r
reducing unemployment and maintaining cash flow
c
controlling stagflation and reducing unemployment
m
managing credit and ensuring the money supply's liquidity
7

risklawsmonopoliessafety

A
risk
B
laws
C
monopolies
D
safety
8

20264046

A
20
B
26
C
40
D
46
9

What are economic challenges that governments must face? Check all that apply.threats of warunemploymentlow productioninflationlow voter turnout

A
threats of war
B
unemployment
C
low production
D
inflation
E
low voter turnout
10

When governments inject money into the economy, which of the following are their goals? Check all that apply.reducing unemploymentimproving economic stabilityencouraging competitionlaying off striking workersimproving production

A
reducing unemployment
B
improving economic stability
C
encouraging competition
D
laying off striking workers
E
improving production
11

How did Adam Smith’s economic ideas help the United States establish a free enterprise system? Check all that apply.

A
They led to freedom of choice for consumers and producers.
B
They led to fixed prices for consumers and producers.
C
They led to open competition for consumers.
D
They led to individual ownership of property.
E
They led to more government spending and increased demand.
F
They led to limited choice and communal ownership of property.
12

Which of these is a banking activity of the Fed?

p
printing money
r
regulating securities markets
s
storing money for banks
f
funding government programs
13

What is the full name of the US central bank, known as the Fed?

t
the Federal Reserve Bank
t
the Federal Deposit Insurance Corporation
t
the Federal Financial Institution
t
the Federal Bank
14

A mixed-market economy is best defined as an economy

A
with some government intervention.
B
without government intervention.
C
with some externalities.
D
without corporate compliance.
15

The diagram shows a challenge for government policy-makers.

Question illustration
A
A country’s needs are more important than its ideals.
T
The most important aspect of economic policy is citizens' safety.
E
Economic policy must reach a balance between needs and ideals.
P
Private property is somewhat less important than fairness.
16

lowstablehigh

A
low
B
stable
C
high
17

If the domino effect occurs as a result of changes in the money supply, what will most likely happen as an immediate result of interest rates being increased?

A
Borrowing will decrease.
B
Investing will decrease.
C
Inflation will increase.
D
Liquidity will increase.
18

What is the main goal in creating the federal budget?

A
managing businesses and increasing spending on all programs
B
deciding how to manage the government’s tax revenue and expenditures
C
finding a way to allow the economy to run on its own
D
finding a way to slow down rapid economic growth
19

Why does the Fed pay interest to banks?

A
It is interest on money held in reserve.
B
It is interest on credit available to the Fed.
C
It is interest on loans taken by the Fed.
D
It is interest on government investments.
20

A plan for spending money that balances income with spending and shows how money will be spent is

a
a surplus.
a
an expenditure.
a
a budget.
a
a deficit.

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