Question 1

The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

Accepted Answer

A)  fiscal spending. 
B)  transfer payment. 
C)  budgetary allowance. 
D)  taxation. 
E)  internal debt. 
A)  fiscal spending. 
B)  transfer payment. 
C)  budgetary allowance. 
D)  taxation. 
E)  internal debt.

Question 2

Which among the following industrial countries has the highest per capita income as measured by the World Bank in 2009?

Accepted Answer

A)  Kuwait 
B)  Norway 
C)  The United States 
D)  Saudi Arabia 
E)  Japan 
A)  Kuwait 
B)  Norway 
C)  The United States 
D)  Saudi Arabia 
E)  Japan

Question 3

A trade deficit involves:

Accepted Answer

A)  net flows of goods from foreign countries to the home country government. 
B)  net money flows from the foreign country firms to the home country government. 
C)  net money flows from the domestic firms to the home country government. 
D)  net money flows from the foreign country firms to the home country. 
E)  net flows of goods from foreign countries to the firms of the home country. 
A)  net flows of goods from foreign countries to the home country government. 
B)  net money flows from the foreign country firms to the home country government. 
C)  net money flows from the domestic firms to the home country government. 
D)  net money flows from the foreign country firms to the home country. 
E)  net flows of goods from foreign countries to the firms of the home country.

Question 4

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones. This was only possible because:

Accepted Answer

A)  of the persuasive advertising campaigns undertaken by firms in the wireless communication industry. 
B)  consumers welcomed the changes and were willing and able to pay for them. 
C)  of the dot-com stock market bubble that lasted from 1995 to 2000. 
D)  the government tightly regulated the wireless communication industry with regulations and taxes. 
E)  businesses needed to produce these products in order to recoup their investment in research and development. 
A)  of the persuasive advertising campaigns undertaken by firms in the wireless communication industry. 
B)  consumers welcomed the changes and were willing and able to pay for them. 
C)  of the dot-com stock market bubble that lasted from 1995 to 2000. 
D)  the government tightly regulated the wireless communication industry with regulations and taxes. 
E)  businesses needed to produce these products in order to recoup their investment in research and development.

Question 5

Which of the following statements is a defining feature of a corporation?

Accepted Answer

A)  The owners of a corporation face unlimited liability on debts. 
B)  A corporation owns and operates units in foreign countries. 
C)  A corporation is created by a verbal agreement. 
D)  A corporation that is based on a verbal agreement is also recognized by State law. 
E)  A corporation has a legal identity that is separate from that of its owners. 
A)  The owners of a corporation face unlimited liability on debts. 
B)  A corporation owns and operates units in foreign countries. 
C)  A corporation is created by a verbal agreement. 
D)  A corporation that is based on a verbal agreement is also recognized by State law. 
E)  A corporation has a legal identity that is separate from that of its owners.

Question 6

The process of new products and new firms replacing existing products and firms is called:

Accepted Answer

A)  transformational innovation. 
B)  technological development. 
C)  price skimming. 
D)  consumer sovereignty. 
E)  creative destruction. 
A)  transformational innovation. 
B)  technological development. 
C)  price skimming. 
D)  consumer sovereignty. 
E)  creative destruction.

Question 7

National economic policies are usually set by the local government in the U.S., making it the focus of economic discussions.

Accepted Answer

A) True 
 B)False

Question 8

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

Accepted Answer

A) True 
 B)False

Question 9

In economics parlance, the term investment refers to:

Accepted Answer

A)  the cost of employing human capital. 
B)  expenditure on expense accounts of employees. 
C)  the expenditure incurred on salaries and rent. 
D)  business spending for acquiring capital goods. 
E)  the expenses on the purchase of stocks of a corporation. 
A)  the cost of employing human capital. 
B)  expenditure on expense accounts of employees. 
C)  the expenditure incurred on salaries and rent. 
D)  business spending for acquiring capital goods. 
E)  the expenses on the purchase of stocks of a corporation.

Question 10

A financial intermediary accepts deposits from savers and makes loans to borrowers.

Accepted Answer

A) True 
 B)False

Question 11

In a market system, who ultimately determines what is produced?

Accepted Answer

A)  Consumers 
B)  Business managers 
C)  Entrepreneurs 
D)  The government 
E)  Stockholders 
A)  Consumers 
B)  Business managers 
C)  Entrepreneurs 
D)  The government 
E)  Stockholders

Question 12

A trade deficit occurs when:

Accepted Answer

A)  a country imposes a price floor. 
B)  a country's imports exceed its exports. 
C)  a country imposes a price ceiling. 
D)  a country's exports exceed its imports. 
E)  when the domestic product market is in disequilibrium. 
A)  a country imposes a price floor. 
B)  a country's imports exceed its exports. 
C)  a country imposes a price ceiling. 
D)  a country's exports exceed its imports. 
E)  when the domestic product market is in disequilibrium.

Question 13

The circular flow of income model shows:

Accepted Answer

A)  the flow of output and income within one sector of the economy. 
B)  how different sectors of the economy are linked together. 
C)  that income is rarely equal to output. 
D)  how business firms interact with one another. 
E)  how businesses sell their resource services to households. 
A)  the flow of output and income within one sector of the economy. 
B)  how different sectors of the economy are linked together. 
C)  that income is rarely equal to output. 
D)  how business firms interact with one another. 
E)  how businesses sell their resource services to households.

Question 14

Which of the following observations is true of the federal budget between 1960 and 2010?

Accepted Answer

A)  The federal budget was in deficit in the early 1960s. 
B)  Between 1960 and 1970 the federal budget deficit reflected a sharp increase. 
C)  The federal budget was in surplus between 1970 and 1980. 
D)  The federal budget deficit was the highest in the late 1990s. 
E)  The federal budget deficit was lower than 600 billion dollars in 2010. 
A)  The federal budget was in deficit in the early 1960s. 
B)  Between 1960 and 1970 the federal budget deficit reflected a sharp increase. 
C)  The federal budget was in surplus between 1970 and 1980. 
D)  The federal budget deficit was the highest in the late 1990s. 
E)  The federal budget deficit was lower than 600 billion dollars in 2010.

Question 15

In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-According to Scenario 4-1, country B is running a: ____ with country A and a ____ with country C.

Accepted Answer

A)  trade deficit with country A and a trade surplus with country C. 
B)  trade surplus with both countries A and C. 
C)  trade surplus with country A and a trade deficit with country C. 
D)  trade deficit with voth countries A and C. 
E)  balanced trade with country A and a trade deficit with country C. 
A)  trade deficit with country A and a trade surplus with country C. 
B)  trade surplus with both countries A and C. 
C)  trade surplus with country A and a trade deficit with country C. 
D)  trade deficit with voth countries A and C. 
E)  balanced trade with country A and a trade deficit with country C.

Question 16

In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-According to Scenario 4-1, country C has net exports of:

Accepted Answer

A)  zero. 
B)  $13 million. 
C)  $6 million. 
D)  F1F1F1S1F1F1F10$13 million. 
E)  F1F1F1S1F1F1F10$6 million. 
A)  zero. 
B)  $13 million. 
C)  $6 million. 
D)  F1F1F1S1F1F1F10$13 million. 
E)  F1F1F1S1F1F1F10$6 million.

Question 17

In a market system, the distribution of income is determined by the ownership of resources.

Accepted Answer

A) True 
 B)False

Question 18

Consumption or household spending of an economy comprises of both consumer spending and business spending.

Accepted Answer

A) True 
 B)False

Question 19

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals.
Figure 4.1
  
-Refer to Figure 4.1. The demand for Restaurant Meals shift in one direction while the demand for Delivery meals shift in another direction. This implies:

Accepted Answer

A)  the demand for Restaurant Meals increased while that for Delivery Meals decreased. 
B)  the demand for Restaurant Meals decreased while that for Delivery Meals increased. 
C)  the demand for Restaurant Meals increased while that for Delivery Meals increased. 
D)  the demand for Restaurant Meals decreased while that for Delivery Meals decreased. 
E)  the demand for Restaurant Meals and the demand for Delivery Meals adds up to 1. 
A)  the demand for Restaurant Meals increased while that for Delivery Meals decreased. 
B)  the demand for Restaurant Meals decreased while that for Delivery Meals increased. 
C)  the demand for Restaurant Meals increased while that for Delivery Meals increased. 
D)  the demand for Restaurant Meals decreased while that for Delivery Meals decreased. 
E)  the demand for Restaurant Meals and the demand for Delivery Meals adds up to 1.

Question 20

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Accepted Answer

A)  $1,000. 
B)  $100. 
C)  $10,000 
D)  $50. 
E)  $5,000. 
A)  $1,000. 
B)  $100. 
C)  $10,000 
D)  $50. 
E)  $5,000.

The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

Which among the following industrial countries has the highest per capita income as measured by the World Bank in 2009?

A trade deficit involves:

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones. This was only possible because:

Which of the following statements is a defining feature of a corporation?

The process of new products and new firms replacing existing products and firms is called:

National economic policies are usually set by the local government in the U.S., making it the focus of economic discussions.

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

In economics parlance, the term investment refers to:

A financial intermediary accepts deposits from savers and makes loans to borrowers.

In a market system, who ultimately determines what is produced?

A trade deficit occurs when:

The circular flow of income model shows:

Which of the following observations is true of the federal budget between 1960 and 2010?

In a market system, the distribution of income is determined by the ownership of resources.

Consumption or household spending of an economy comprises of both consumer spending and business spending.

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 -Refer to Figure 4.1. The demand for Restaurant Meals shift in one direction while the demand for Delivery meals shift in another direction. This implies:

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 4: The Market System and the Private and Public Sector

The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

Which among the following industrial countries has the highest per capita income as measured by the World Bank in 2009?

A trade deficit involves:

The wireless communication business has changed dramatically since the 1980s, going from mobile phones to smartphones. This was only possible because:

Which of the following statements is a defining feature of a corporation?

The process of new products and new firms replacing existing products and firms is called:

National economic policies are usually set by the local government in the U.S., making it the focus of economic discussions.

The replacement of film-based still cameras by digital cameras and recently by digital SLR cameras exemplifies creative destruction.

In economics parlance, the term investment refers to:

A financial intermediary accepts deposits from savers and makes loans to borrowers.

In a market system, who ultimately determines what is produced?

A trade deficit occurs when:

The circular flow of income model shows:

Which of the following observations is true of the federal budget between 1960 and 2010?

In a market system, the distribution of income is determined by the ownership of resources.

Consumption or household spending of an economy comprises of both consumer spending and business spending.

The figure given below represents the equilibrium price and output in the market for restaurant meals and delivery meals. Figure 4.1 -Refer to Figure 4.1. The demand for Restaurant Meals shift in one direction while the demand for Delivery meals shift in another direction. This implies:

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

Globalization

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters