Question 1

Mae's Restaurant is the only establishment in town that sells cinnamon rolls. Mae therefore has a monopoly on the cinnamon roll business in town.

Accepted Answer

A) True 
 B)False

Question 2

The supply of services is not part of the study of economies because it does not involve the exchange of goods.

Accepted Answer

A) True 
 B)False

Question 3

Mae is considering raising the price of her cinnamon rolls in order to maximize her profits. Describe the factors that will help her determine the best price for her cinnamon rolls.

Accepted Answer

Mae should take into consideration the b

Question 4

A continuous decrease in the level of prices over time is called ________.

Accepted Answer

A) deflation 
B) inflation 
C) disinflation 
D) deflection 
A) deflation 
B) inflation 
C) disinflation 
D) deflection

Question 5

________ unemployment measures those out of work during the off-season, such as those employed in snow- or beach-related industries, agriculture, and/or holiday activities.

Accepted Answer

A) Seasonal 
B) Frictional 
C) Structural 
D) Cyclical 
A) Seasonal 
B) Frictional 
C) Structural 
D) Cyclical

Question 6

Socialism is similar to communism in that ________.

Accepted Answer

A) the government provides all of the social services 
B) the governments fail under economic stress 
C) the government distributes goods and services 
D) the government experiences shortages of goods and services 
A) the government provides all of the social services 
B) the governments fail under economic stress 
C) the government distributes goods and services 
D) the government experiences shortages of goods and services

Question 7

How do consumer preferences for popular goods affect the demand curve? Give an example using a specific product.

Accepted Answer

When consumers show a high rate of prefe

Question 8

A free market economy is one in which ________.

Accepted Answer

A) the government or other centralized group determines what to produce 
B) individuals determine what to produce with some level of government involvement 
C) a tightly knit social network barters and trades for goods at a market 
D) individuals and private firms make decisions based on consumer needs and wants 
A) the government or other centralized group determines what to produce 
B) individuals determine what to produce with some level of government involvement 
C) a tightly knit social network barters and trades for goods at a market 
D) individuals and private firms make decisions based on consumer needs and wants

Question 9

The reserve requirement is defined as ________.

Accepted Answer

A) the maximum amount of money banks can borrow from the Federal Reserve 
B) the maximum amount of money banks can borrow from one another 
C) the minimum amount of money banks hold in reserve to cover deposits 
D) the minimum amount of money that can be deposited by banks in the Federal Reserve 
A) the maximum amount of money banks can borrow from the Federal Reserve 
B) the maximum amount of money banks can borrow from one another 
C) the minimum amount of money banks hold in reserve to cover deposits 
D) the minimum amount of money that can be deposited by banks in the Federal Reserve

Question 10

The government determines the appropriate level of taxes and spending through its ________.

Accepted Answer

A) monetary policy 
B) domestic policy 
C) foreign policy 
D) fiscal policy 
A) monetary policy 
B) domestic policy 
C) foreign policy 
D) fiscal policy

Question 11

The ________ reviews mergers between large competitors to determine whether the combined firm would be a monopolistic corporation.

Accepted Answer

A) Federal Trade Commission 
B) Internal Revenue Service 
C) Federal Reserve Bank 
D) Federal Court system 
A) Federal Trade Commission 
B) Internal Revenue Service 
C) Federal Reserve Bank 
D) Federal Court system

Question 12

Holding all other factors constant, prices are set slightly above the point where supply equals demand.

Accepted Answer

A) True 
 B)False

Question 13

Explain the differences between how a market economy and a mixed economy decide what to produce, how to produce it, and for whom to produce it.

Accepted Answer

In a market economy, individuals and pri

Question 14

What are the possible consequences of a continual expansion in the money supply?

Accepted Answer

If the money supply continues to expand,

Question 15

Prices become higher when a unique and highly desirable item is auctioned ________.

Accepted Answer

A) because the supply and demand are equal 
B) because the demand is higher than the supply 
C) because the supply is higher than the demand 
D) because the supply and demand are kept unknown 
A) because the supply and demand are equal 
B) because the demand is higher than the supply 
C) because the supply is higher than the demand 
D) because the supply and demand are kept unknown

Question 16

What best determines the level of competition?

Accepted Answer

A) the amount of population change 
B) the amount of substitutes for a certain product or service 
C) the amount of change in the level of income 
D) the amount of complementary products or service 
A) the amount of population change 
B) the amount of substitutes for a certain product or service 
C) the amount of change in the level of income 
D) the amount of complementary products or service

Question 17

What is the money supply?

Accepted Answer

A) the total amount of money held in the Federal Reserve Bank 
B) the combined amount of money available in privately owned accounts 
C) the combined amount of money available within the economy 
D) the amount of money the government is allowed to spend to stimulate economic growth 
A) the total amount of money held in the Federal Reserve Bank 
B) the combined amount of money available in privately owned accounts 
C) the combined amount of money available within the economy 
D) the amount of money the government is allowed to spend to stimulate economic growth

Question 18

Which transaction best describes bartering?

Accepted Answer

A) an exchange of goods for currency, in which the price of something is determined by establishing its value against an underlying commodity 
B) a transfer of goods without an exchange of currency, in which the price of something is determined by the seller, and the buyer agrees to pay him at a later time 
C) an exchange of goods without an exchange of currency, in which the price of something is determined by the needs and resources of each person involved in the exchange 
D) an exchange of goods for currency, in which the price of something is determined by what buyers are willing to pay 
A) an exchange of goods for currency, in which the price of something is determined by establishing its value against an underlying commodity 
B) a transfer of goods without an exchange of currency, in which the price of something is determined by the seller, and the buyer agrees to pay him at a later time 
C) an exchange of goods without an exchange of currency, in which the price of something is determined by the needs and resources of each person involved in the exchange 
D) an exchange of goods for currency, in which the price of something is determined by what buyers are willing to pay

Question 19

The producer price index tracks the average change in prices from the ________ perspective.

Accepted Answer

A) government's 
B) buyer's 
C) seller's 
D) economist's 
A) government's 
B) buyer's 
C) seller's 
D) economist's

Question 20

Economics is the study of how goods and services are exchanged between individuals, businesses, and governments.

Accepted Answer

A) True 
 B)False

Exam 2: Economics and Banking

Mae's Restaurant is the only establishment in town that sells cinnamon rolls. Mae therefore has a monopoly on the cinnamon roll business in town.

The supply of services is not part of the study of economies because it does not involve the exchange of goods.

Mae is considering raising the price of her cinnamon rolls in order to maximize her profits. Describe the factors that will help her determine the best price for her cinnamon rolls.

A continuous decrease in the level of prices over time is called ________.

________ unemployment measures those out of work during the off-season, such as those employed in snow- or beach-related industries, agriculture, and/or holiday activities.

Socialism is similar to communism in that ________.

How do consumer preferences for popular goods affect the demand curve? Give an example using a specific product.

A free market economy is one in which ________.

The reserve requirement is defined as ________.

The government determines the appropriate level of taxes and spending through its ________.

The ________ reviews mergers between large competitors to determine whether the combined firm would be a monopolistic corporation.

Holding all other factors constant, prices are set slightly above the point where supply equals demand.

Explain the differences between how a market economy and a mixed economy decide what to produce, how to produce it, and for whom to produce it.

What are the possible consequences of a continual expansion in the money supply?

Prices become higher when a unique and highly desirable item is auctioned ________.

What best determines the level of competition?

What is the money supply?

Which transaction best describes bartering?

The producer price index tracks the average change in prices from the ________ perspective.

Economics is the study of how goods and services are exchanged between individuals, businesses, and governments.

Business in the United States

Ethics and Social Responsibility

Business in a Global Economy

Entrepreneurs and Small Businesses

Forms of Business Ownership

Functions and Skills of Management

Motivation, Leadership, and Teamwork

Human Resources and Labor Relations

Business Technology: Management Information Systems

Production and Operations Management

Marketing and Consumer Behavior

Product Development and Pricing Strategies

Promotion and Distribution

Financing and Tracking Business Operations

Securities and Investments

Mini E-Commerce

Mini Constructing a Successful Business Plan

Mini Business Communications

Mini Finding Employment

Mini Personal Finance

Filters