Answers EAP-Economics and Personal Finance BUnit Test

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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

cyclically unemployed

domestically unemployed

frictionally unemployed

structurally unemployed

still employed

unemployed

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The circle graph shows the GDP in Germany for 2012.Which sector of Germany’s economy had the highest GDP?

agriculture

industry

services

technology

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

Mortgage rates are high.

Demand greatly decreases.

Mortgages become unavailable.

Housing prices increase.

Which describes a factor that limits economic growth?

making investments

developing technology

engaging in trade

having low internal demand

Which best describes how a recession develops as demand and production decrease?

The recession enters a recovery period.

The recession slows.

The recession accelerates.

The recession starts and stops.

Which best describes the purpose served by economic models within an economic system?

Models identify patterns.

Models determine the business cycle.

Models control change.

Models define global demand.

Which best describes what occurs in the product market?

the exchange of labor for capital

the exchange of goods and services for factors of production

the exchange of goods and services for money

the exchange of money for factors of production

Why are imports, which bring goods into a country, considered a leakage factor?

Imports do not generate domestic income.

Domestic industry loses ground as imports increase.

Imports are taxed heavily, which is a secondary leakage factor.

The money paid to producers of imports leaves the country.

Which scenario is an example of cost-push inflation?

Consumers have more money to buy cars, and the prices of cars and car parts rise as a result.

An increase in workers’ wages raises the production cost of cars, and car prices rise as a result.

The demand for cars falls as consumers have less disposable income, and car prices fall as a result.

A government bailout helps car manufacturers lower their costs, and car prices fall as a result.

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

Total Exports for the United States and China

Trade Between China and the United States

Unemployment in the United States and China

The History of International Trade

Which unemployment rate do most economists consider to be acceptable in the United States?

0 percent

5 percent

10 percent

20 percent

How does demand-pull inflation differ from cost-push inflation?

Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.

Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.

Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.

Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.

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?

2008

2009

2011

2012

An increase in gross domestic product (GDP) is a sign that a country’s economy is

declining.

stagnant.

growing.

depressed.

Which is the best definition of inflation?

a gradual decrease in the price of goods and services

a gradual increase in the price of goods and services

an exponential decrease in the price of goods and services

an exponential increase in the price of goods and services

Stagflation occurs when high inflation combines with

high unemployment and a low level of production.

low unemployment and a high level of production.

a drop in buying power and a rise in workers’ wages.

a rise in buying power and a drop in workers’ wages.

There are four stages in an economic recovery. 1. increased production2. rising demand (occurs twice)3. increased hiring In which order do these stages occur?

2, 1, 2, 3

3, 2, 1, 2

2, 3, 1, 2

2, 1, 3, 2

This graph shows merchandise export data for the years 2010 through 2012.Which statement most accurately describes the information presented on the graph?

The United States exported more merchandise than any other nation.

The United States exported more than $2 trillion worth of goods in 2012.

China exported more goods than the United States from 2010 to 2012.

China exported more than $2 trillion in goods for each year on the graph.

When economists determine that a nation’s GDP has declined, they can point to this as a sign of

economic shrinkage.

economic growth.

low unemployment.

poor leadership.

Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

stagnant prices

high levels of production

ambivalence about the economy

reduced incomes

Typically, low inflation is a sign of

a healthy economy because it results from a steady rise in demand.

a healthy economy because it results from a steady rise in supply.

a struggling economy because it results from a steady fall in demand.

a struggling economy because it results from a steady fall in supply.

The circle graph shows information about Germany’s labor force in 2011.Which statement most accurately describes Germany’s labor force?

Most Germans are farmers.

Most Germans work in services.

Most Germans work in factories.

Most Germans fish for a living.

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

a decrease in prices for computers and computer accessories.

an increase in prices for computers and computer accessories.

a decrease in prices for computers, but not computer accessories.

an increase in prices for computers, but not computer accessories.

These circle graphs show information about Bolivia’s workforce and GDP.Which statement summarizes the information on these graphs?

Many Bolivians are farmers, but agriculture makes a modest contribution to the GDP.

Industry in Bolivia has grown faster than the labor force can supply workers.

Bolivia has invested large sums of money into education to encourage economic growth.

Bolivia must depend on agriculture to have a healthy economic future.

Which best describes what injector factors bring to an economic system?

factors of production

imports

consumers

money

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