Question 1 (Multiple Choice Worth 4 points)
Which of these illustrate the divisibility of money?
Carlos uses five dollars in cash and $10.45 in credit to pay for dinner. Esperanza exchanges a one dollar bill for four quarters. Jose carries coins and bills in his wallet. The one dollar bill in Mia's pocket stayed intact in the laundry.
Question 2 (Multiple Choice Worth 4 points)
Which of these is an example of the line marked “Artificial Price”?
Farm subsidies Market price Minimum wage Rent controls
Question 3 (Multiple Choice Worth 4 points)
Sixty-five nations sign a treaty pledging caps on industrial emissions and the development of renewable resource energy production. Which of the following would be a long-term positive externality for global health?
Increased land allocation for wind farms Lower rates of childhood asthma More manufacturing of vaccines Reduction of vitamin deficiencies in children
Question 4 (Multiple Choice Worth 4 points)
Which of these keeps prices below equilibrium?
Minimum price Price floor Minimum-wage laws Rent-control laws
Question 5 (Multiple Choice Worth 4 points)
© Farcaster 2009
Creative Commons Attribution-Share Alike 3.0 Unported
Which of the following statements best describes the data shown for 2012 to 2015?
Spending and tax rates will both decrease. Spending and tax rates will remain about the same. Spending will decrease relative to tax revenue. Tax revenues will increase relative to spending.
Question 6 (Multiple Choice Worth 4 points)
Why is it in the best interest of the government to regulate natural monopolies?
To allow multiple suppliers access to the market To gain a share of the profits of the monopoly To keep costs to a minimum for consumers To prevent surplus goods and services
Question 7 (Multiple Choice Worth 4 points)
What is the main function of the Federal Open Market Committee?
Extend loans to consumers. Oversee administration of financial regulations. Set monetary policy to promote economic growth. Write laws governing finance and trade.
Question 8 (Multiple Choice Worth 4 points)
Economists warn that the nation is slipping into a recession. Which fiscal policies will the federal government most likely take to help the economy grow?
Lower taxes and decrease spending Lower taxes and increase spending Raise taxes and decrease spending Raise taxes and increase spending
Question 9 (Multiple Choice Worth 4 points)
The city council allocates funds for road repair. Which of the following circumstances would be a positive externality?
Citizens spend less money repairing punctured and torn tires. Gas stations throughout the city reduce fuel prices. Municipal taxes increase to fund added services. Traffic flow in the city improves.
Question 10 (Multiple Choice Worth 4 points)
Andrew is 17 years old and would like to establish credit history. Which of these would be a good first step for him?
Apply for as many credit cards as possible. Ask a parent or guardian to cosign for a no-fee credit card. Ask to borrow a parent's credit card. Find a low-interest, unsecured credit card.
Question 11 (Multiple Choice Worth 4 points)
Imagine the federal government has a national debt of $10.2 trillion. Congress's budget for the coming year includes spending projections of $4.2 billion. Tax revenue projects $3.8 billion. Which will be the most likely consequence?
The national debt will decrease. The national debt will increase. Personal incomes will go down. Unemployment programs will be cut.
Question 12 (Multiple Choice Worth 4 points)
A livestock ranch decides to expand its operations. Which of the following would be a negative externality for the local environment?
Higher property taxes Less land for development Less use of renewable resources More groundwater pollution
Question 13 (Multiple Choice Worth 4 points)
Tennessee Valley Authority (TVA) Sites
Red = water dams
Purple = nuclear power plants
Orange = fossil fuel power plants
Study the map above. Who would object to negative externalities related to the use of renewable and nonrenewable resources in the map?
Business owners forced to relocate when property is seized Families who lose power during a storm Local officials who collect taxes for energy usage Workers who undergo training for new high-wage positions
Question 14 (Multiple Choice Worth 4 points)
Following U.S. involvement in the Korean War and the related period of low unemployment and rising prices, the Federal Reserve intervened to curb growth and decrease inflation. At what point in the business cycle did the Federal Reserve take action?
Contraction Expansion Peak Trough
Question 15 (Multiple Choice Worth 4 points)
If the United States falls into a recession, which action would the Federal Reserve take to encourage employment?
Buy government securities Increase reserve requirements Raise federal funds and prime rates Sell government securities
Question 16 (Multiple Choice Worth 4 points)
A period of economic stability began in the 1980s. In 2001, prices began to increase. In 2007, an economic crisis caused prices to fall. Which of these dates would be considered the peak of this cycle?
1980 1990 2001 2007
Question 17 (Multiple Choice Worth 4 points)
© 2013 FLVS
After creating the 2013 budget for her hamburger restaurant, Holly realizes that she will need to spend 10 percent on training because of a change in food-handling laws. Which of these could represent the numbers in Holly's new budget?
Repairs 3%; Rent 27% Misc 10%; Payroll 10% Advertising 3%; Misc 2% Utilities 5%; Misc 5%
Question 18 (Multiple Choice Worth 4 points)
Tina has $1,500 that she will use to buy a car in four months. In the meantime, she would like to invest it to earn more money. Which of these would yield the greatest return in her time frame?
Money market account Roth IRA Savings account Savings bonds
Question 19 (Multiple Choice Worth 4 points)
Economic forecasters predict a long period of job growth and consumer spending. The Federal Reserve is most likely to do which of the following to encourage this expansion?
Increase federal funds rate Keep the discount rate low Sell government securities Maintain high reserve requirements
Question 20 (Multiple Choice Worth 4 points)
As an eighth grader, Marliss wins an art competition, and her prize is one thousand dollars. She wants to invest the money for her college fund. Which of these would be a good option?
A savings bond An IRA Futures Stocks
Question 21 (Multiple Choice Worth 4 points)
© 2013 FLVS
Cardinal Comics produces graphic historical novels and retails them through local shops throughout the United States. The publisher maintains an in-house staff of editors and illustrators but contracts out writing, printing, and distribution. Its printer uses domestically recycled paper but imports ink and much of its printing equipment from overseas. Segment B of the circular flow diagram above reflects which part of this scenario?
Consumers purchase graphic historical novels from local shops. Publisher maintains an in-house staff of editors. Cardinal Comics contracts out writing, printing, and distribution. Printer uses domestically recycled paper.
Question 22 (Essay Worth 4 points)
© 2013 FLVS
Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between product market and rest of world.