Question 1

Among the nations listed, which of the following has 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

How does the U.S.economy rank in size?

Accepted Answer

A) First in economic output 
B) Second in economic output 
C) Third in economic output 
D) Fourth in economic output 
E) Fifth in economic output 
A) First in economic output 
B) Second in economic output 
C) Third in economic output 
D) Fourth in economic output 
E) Fifth in economic output

Question 3

The proportion of income which is earned in the form of wages for labor is currently about

Accepted Answer

A) 15 percent. 
B) 35 percent. 
C) 51 percent. 
D) 60 percent. 
A) 15 percent. 
B) 35 percent. 
C) 51 percent. 
D) 60 percent.

Question 4

The largest share of the typical American family budget goes to

Accepted Answer

A) goods. 
B) health care. 
C) housing. 
D) transportation 
A) goods. 
B) health care. 
C) housing. 
D) transportation

Question 5

According to polling data, Americans believe that after-tax corporate profits are

Accepted Answer

A) less than 10 percent of corporate product prices. 
B) nearly 50 percent of the corporate product price. 
C) approximately 36 percent of corporate product prices. 
D) approximately 25 percent of corporate product prices. 
A) less than 10 percent of corporate product prices. 
B) nearly 50 percent of the corporate product price. 
C) approximately 36 percent of corporate product prices. 
D) approximately 25 percent of corporate product prices.

Question 6

The U.S.economy is relatively closed in terms of economic activity related to exports and imports.

Accepted Answer

A) True 
 B)False

Question 7

Gross domestic product is a measure of

Accepted Answer

A) the size of the largest industry in an economy. 
B) the money value of all final goods and services produced in a year by the economy. 
C) the volume of goods and services, which involved in international trade. 
D) the goods and services produced strictly by corporations. 
E) the nonmarket production of goods and services. 
A) the size of the largest industry in an economy. 
B) the money value of all final goods and services produced in a year by the economy. 
C) the volume of goods and services, which involved in international trade. 
D) the goods and services produced strictly by corporations. 
E) the nonmarket production of goods and services.

Question 8

A typical American family sends about _____ percent of its budget on services.

Accepted Answer

A) 20 
B) 32 
C) 66 
D) 70 
A) 20 
B) 32 
C) 66 
D) 70

Question 9

Gross domestic product is the money value of manufacturing production in a year.

Accepted Answer

A) True 
 B)False

Question 10

The issue of inequality has become prominent because of

Accepted Answer

A) an increased sense of justice. 
B) a decrease in the strength of capitalism. 
C) the widening wage disparity. 
D) a consistent fall in incomes. 
A) an increased sense of justice. 
B) a decrease in the strength of capitalism. 
C) the widening wage disparity. 
D) a consistent fall in incomes.

Question 11

The United States has the biggest national economy in the world solely because of the U.S.population.

Accepted Answer

A) True 
 B)False

Question 12

A recession is a period of time in which the total output of the economy rises.

Accepted Answer

A) True 
 B)False

Question 13

Consumer spending accounts for about 50 percent of GDP.

Accepted Answer

A) True 
 B)False

Question 14

In the United States each year,

Accepted Answer

A) more than 50 percent of all businesses fail. 
B) less than 25 percent of all businesses fail. 
C) over 10 percent of all businesses fail. 
D) only about 5 percent of all businesses fail. 
A) more than 50 percent of all businesses fail. 
B) less than 25 percent of all businesses fail. 
C) over 10 percent of all businesses fail. 
D) only about 5 percent of all businesses fail.

Question 15

In the United States, all property is privately owned.

Accepted Answer

A) True 
 B)False

Question 16

Since the 1950s, the percentage of women working in the United States has held relatively steady.

Accepted Answer

A) True 
 B)False

Question 17

The largest single portion of the federal budget is devoted to

Accepted Answer

A) national defense. 
B) Medicare and Medicaid. 
C) Social Security and unemployment compensation. 
D) education. 
E) interest payments on the national debt. 
A) national defense. 
B) Medicare and Medicaid. 
C) Social Security and unemployment compensation. 
D) education. 
E) interest payments on the national debt.

Question 18

Why does unemployment tend to change when the level of output changes?

Accepted Answer

A) Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output. 
B) Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls. 
C) As output rises, more people are more interested in buying goods and services, and so these people work more to obtain the income needed to buy things. 
D) Persons face the option of buying or working, so that when they do more of one, the other necessarily falls. 
E) When companies replace workers with machines, output rises and people take more vacation time prior to returning to work. 
A) Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller output. 
B) Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls. 
C) As output rises, more people are more interested in buying goods and services, and so these people work more to obtain the income needed to buy things. 
D) Persons face the option of buying or working, so that when they do more of one, the other necessarily falls. 
E) When companies replace workers with machines, output rises and people take more vacation time prior to returning to work.

Question 19

The U.S.economy has become a less open economy over the past 50 years.

Accepted Answer

A) True 
 B)False

Question 20

Transfer payments are money received as grants from government.

Accepted Answer

A) True 
 B)False

Exam 2: The Economony: Myth and Reality

Among the nations listed, which of the following has the most open economy?

How does the U.S.economy rank in size?

The proportion of income which is earned in the form of wages for labor is currently about

The largest share of the typical American family budget goes to

According to polling data, Americans believe that after-tax corporate profits are

The U.S.economy is relatively closed in terms of economic activity related to exports and imports.

Gross domestic product is a measure of

A typical American family sends about _____ percent of its budget on services.

Gross domestic product is the money value of manufacturing production in a year.

The issue of inequality has become prominent because of

The United States has the biggest national economy in the world solely because of the U.S.population.

A recession is a period of time in which the total output of the economy rises.

Consumer spending accounts for about 50 percent of GDP.

In the United States each year,

In the United States, all property is privately owned.

Since the 1950s, the percentage of women working in the United States has held relatively steady.

The largest single portion of the federal budget is devoted to

Why does unemployment tend to change when the level of output changes?

The U.S.economy has become a less open economy over the past 50 years.

Transfer payments are money received as grants from government.

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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of 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

Contemporary Issues in the Useconomy

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