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Econ Practice Questions

Terms in this set (43)

If you said that a pair of jeans and a fleece vest were both worth $35, you would be speaking of money as a
standard of value
Paper money backed by something tangible, such as silver or gold, is called:
representative money
Two types of near money are
Savings accounts and certificates of deposit
Modern banking began with
Italian merchants in the Middle Ages
Who founded the first bank of the United States?
A. Ham
What did President Franklin Roosevelt do to restore financial stability and confidence in the banking system?
proposed the banking act of 1933
Which financial assets offered by banking institutions are ensured by the federal government?
CDs and money market deposit accounts
Which is the market where short-term financial assets are sold?
Money market
Which is the first issue to consider when deciding which investments are best for reaching your financial objective?
available time
What is risk?
the possibility of losing some of the principle
Which investments offer the highest potential for rate of return over time?
stocks
GDP does not measure
the underground economy
he value of all final goods and services produced in a country minus the depreciation of capital stock
net national product
Macroeconomic equilibrium is the point where
aggregate demand equals aggregate supply
Measures of economic performance that usually change at the same time as real GDP are called
coincident indicators
The longest contraction of the US economy followed
the stock market crash of 1929
Who is included when calculating the unemployment rate?
unemployed workers who have looked for work in the previous four weeks
Full employment is a situation in which
all persons over the age of 18 who want full-time work are employed
How does persistent unemployment hurt the economy?
it damages workers' self -confidence
What does the Lorenz curve show
degree of income inequality in a nation
Which of the following factors have a strong influence on who is likely to live in poverty?
education and demographic trends
In a modified free enterprise system
government establishes protection and regulations
The government uses tax money to
purchase resources
A tax placed on a good or service
increases production cost
When the percentage of an income paid in tax decreases as income increases, a tax
is regressive
The ability of one trading nation to make a product more efficiently than others is known as
absolute advantage
When countries specialize and trade, they
improve their ratio of return
Which of the following is a result of a country beginning to export a product?
the domestic price of the product goes up
What is one effect of import tariffs?
they allow industries to operate inefficiently
What is one argument in favor of protectionist trade policies?
they protect infant industries
Which factors contribute to a low infant mortality rate?
adequate nutrition and clean drinking water
The literacy rate measures the
percentage of people over 15 who can read and write
Which is the most valuable resource of a market economy?
human capital
Businesses are attracted to nations
that follow the rule of law
An example of corruption
funneling government contracts to political allies
The two most basic types of accounts offered by banks are
checking and savings
Effectively setting up a budget includes the following steps
determining your income, tracking your expenses, categorizing expenses, determining fixed and flexible expenses, and setting up a spending plan
Credit cards are the recommended finance method for large purchases such as college tuition, buying a car, or purchasing a house
true
Lenders use the three Cs to determine if you are creditworthy and can be trusted to repay your loan.
the criteria include character, capacity, and capital
What is an advantage of going to a public four-year college in your own state?
In-state tuition is generally lower than out-of-state tuition
To get financial aid for school, you must fill out the
FAFSA
Which source of employment information lets you meet many employers in person all in one place?
Job fairs
Who is required to file a tax return?
people who earn above a certain amount of income
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