Question 1

Which of the following is the most open economy?

Accepted Answer

A)  Germany 
B)  the Netherlands 
C)  the United States 
D)  Japan 
E)  Canada 
A)  Germany 
B)  the Netherlands 
C)  the United States 
D)  Japan 
E)  Canada

Question 2

An industry can be defined as

Accepted Answer

A)  the group of all firms that sell a product. 
B)  any company that produces and sells something. 
C)  the set of buyers of a particular good or service. 
D)  the top companies that sell something. 
A)  the group of all firms that sell a product. 
B)  any company that produces and sells something. 
C)  the set of buyers of a particular good or service. 
D)  the top companies that sell something.

Question 3

In a mixed economy

Accepted Answer

A)  all economies choose the same mix of private and public involvement in the economy. 
B)  the government is more important than the private sector in generating output. 
C)  there is some government influence over the workings of the free market. 
D)  all of the above. 
A)  all economies choose the same mix of private and public involvement in the economy. 
B)  the government is more important than the private sector in generating output. 
C)  there is some government influence over the workings of the free market. 
D)  all of the above.

Question 4

The United States economy is

Accepted Answer

A)  the third largest in the world. 
B)  larger than all other national economies combined. 
C)  second largest in the world, behind Japan. 
D)  largest in the world. 
A)  the third largest in the world. 
B)  larger than all other national economies combined. 
C)  second largest in the world, behind Japan. 
D)  largest in the world.

Question 5

Which of the following is a valid reason to consider government regulation?

Accepted Answer

A)  Seeking some social objective that markets do not achieve. 
B)  Fear that capitalism will prove too productive. 
C)  Desire on the part of government to be useful. 
D)  Requests for protection from an industry. 
E)  All of the above. 
A)  Seeking some social objective that markets do not achieve. 
B)  Fear that capitalism will prove too productive. 
C)  Desire on the part of government to be useful. 
D)  Requests for protection from an industry. 
E)  All of the above.

Question 6

The FairTax idea centers on a national sales tax to replace other taxes including federal income tax.If such a flat tax were enacted, what would happen to the role of government as redistributor?

Accepted Answer

A)  It would decrease as tax rates increased and income taxes became more progressive. 
B)  It would increase as tax rates decreased and income taxes became more representative. 
C)  It would decrease as progressive income taxes ended. 
D)  It would increase as regressive income taxes ended. 
E)  It would be largely unchanged. 
A)  It would decrease as tax rates increased and income taxes became more progressive. 
B)  It would increase as tax rates decreased and income taxes became more representative. 
C)  It would decrease as progressive income taxes ended. 
D)  It would increase as regressive income taxes ended. 
E)  It would be largely unchanged.

Question 7

In the United States, most workers

Accepted Answer

A)  work for government of some sort. 
B)  produce raw materials for manufacturing. 
C)  work in agriculture and farming. 
D)  produce services rather than goods. 
A)  work for government of some sort. 
B)  produce raw materials for manufacturing. 
C)  work in agriculture and farming. 
D)  produce services rather than goods.

Question 8

The majority of American workers are employed in the service sector of the economy.

Accepted Answer

A) True 
 B)False

Question 9

Real GDP is the dollar value of all goods and services produced in an economy.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following groups has had declining labor force participation over the last 30 years?

Accepted Answer

A)  Women 
B)  Men 
C)  Teenagers 
D)  Americans 
A)  Women 
B)  Men 
C)  Teenagers 
D)  Americans

Question 11

A recession is a period of time in which real GDP falls.

Accepted Answer

A) True 
 B)False

Question 12

Approximately half of all U.S.workers are employed by various levels of government.

Accepted Answer

A) True 
 B)False

Question 13

A central government collected taxes totaling $120 billion in the previous year.It's expenditure during the year was roughly the same.This is an example of a

Accepted Answer

A)  balanced budget. 
B)  surplus budget. 
C)  deficit budget. 
D)  zero budget. 
A)  balanced budget. 
B)  surplus budget. 
C)  deficit budget. 
D)  zero budget.

Question 14

Government in the United States spends more as a percentage of GDP than in most other industrialized nations.

Accepted Answer

A) True 
 B)False

Question 15

The United States has the largest economy in the world because

Accepted Answer

A)  it has the most land to work with. 
B)  it has a large population. 
C)  American workers are very productive. 
D)  both b and c are correct. 
A)  it has the most land to work with. 
B)  it has a large population. 
C)  American workers are very productive. 
D)  both b and c are correct.

Question 16

One of the most important changes in the composition of the labor force in the United States has been

Accepted Answer

A)  the major increase in the number of women who work outside the home. 
B)  the drop in the number of men who only work part-time. 
C)  the steady decline in the number of women who work. 
D)  the increase in the ratio of male workers to female workers. 
E)  the major increase in the number of men who work away from the home or farm. 
A)  the major increase in the number of women who work outside the home. 
B)  the drop in the number of men who only work part-time. 
C)  the steady decline in the number of women who work. 
D)  the increase in the ratio of male workers to female workers. 
E)  the major increase in the number of men who work away from the home or farm.

Question 17

Over the last several years the United States has had lower unemployment rates than most European countries.

Accepted Answer

A) True 
 B)False

Question 18

Recessions are periods of declining economic activity.

Accepted Answer

A) True 
 B)False

Question 19

Compared to people in other nations, people in the United States pay

Accepted Answer

A)  much higher taxes. 
B)  somewhat higher taxes, on average. 
C)  about the same amount taxes. 
D)  lower taxes. 
A)  much higher taxes. 
B)  somewhat higher taxes, on average. 
C)  about the same amount taxes. 
D)  lower taxes.

Question 20

How does the United States compare to other nations on a per capita scale as far as government production and taxation?

Accepted Answer

Government production as a share of GDP

Exam 2: The Economy: Myth and Reality

Which of the following is the most open economy?

An industry can be defined as

In a mixed economy

The United States economy is

Which of the following is a valid reason to consider government regulation?

The FairTax idea centers on a national sales tax to replace other taxes including federal income tax.If such a flat tax were enacted, what would happen to the role of government as redistributor?

In the United States, most workers

The majority of American workers are employed in the service sector of the economy.

Real GDP is the dollar value of all goods and services produced in an economy.

Which of the following groups has had declining labor force participation over the last 30 years?

A recession is a period of time in which real GDP falls.

Approximately half of all U.S.workers are employed by various levels of government.

A central government collected taxes totaling $120 billion in the previous year.It's expenditure during the year was roughly the same.This is an example of a

Government in the United States spends more as a percentage of GDP than in most other industrialized nations.

The United States has the largest economy in the world because

One of the most important changes in the composition of the labor force in the United States has been

Over the last several years the United States has had lower unemployment rates than most European countries.

Recessions are periods of declining economic activity.

Compared to people in other nations, people in the United States pay

How does the United States compare to other nations on a per capita scale as far as government production and taxation?

What Is Economics?

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: An Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: The Importance of Marginal Analysis

Securities: Business Finance, and the Economy: The Tail that Wags the Dog?

The Firm and the Industry under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: The Price System

The Shortcomings of Free Markets

The Market's Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation?

Bringing in the Supply Side: Unemployment and Inflation?

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder?

Exchange Rates and the Macroeconomy

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