Question 1

Increased spending on which of the following items is most likely to increase the size of government during the years following 2010?

Accepted Answer

A)  education 
B)  Social Security and Medicare 
C)  agricultural subsidies 
D)  transportation (roads and airports) 
A)  education 
B)  Social Security and Medicare 
C)  agricultural subsidies 
D)  transportation (roads and airports)

Question 2

Government expenditures as a percent of GDP in the United States

Accepted Answer

A)  are very high in comparison to the rest of the world. 
B)  are smaller than for most other high-income industrial countries. 
C)  are much smaller today than they were a century ago. 
D)  are none of the above. 
A)  are very high in comparison to the rest of the world. 
B)  are smaller than for most other high-income industrial countries. 
C)  are much smaller today than they were a century ago. 
D)  are none of the above.

Question 3

Interest payments on home mortgages and home equity loans are tax deductible. This tax deductibility encourages households to

Accepted Answer

A)  shift other forms of debt to their home mortgage. 
B)  increase the equity in their house. 
C)  make larger payments and pay down their mortgage loan more rapidly. 
D)  decrease the overall amount of household debt in relation to household income. 
A)  shift other forms of debt to their home mortgage. 
B)  increase the equity in their house. 
C)  make larger payments and pay down their mortgage loan more rapidly. 
D)  decrease the overall amount of household debt in relation to household income.

Question 4

Which of the following is the most efficient method to reduce pollution emissions?

Accepted Answer

A)  government pollution charges or taxes 
B)  non-tradable emission standards that cap allowable pollution 
C)  common law enforcement of property rights, when those rights are well-defined and transaction costs are low 
D)  legislated regulations limiting the quantity of emissions allowed by each firm 
A)  government pollution charges or taxes 
B)  non-tradable emission standards that cap allowable pollution 
C)  common law enforcement of property rights, when those rights are well-defined and transaction costs are low 
D)  legislated regulations limiting the quantity of emissions allowed by each firm

Question 5

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

Accepted Answer

A)  competitive forces will tend to reduce discrimination. 
B)  the wages of employees who are discriminated against will rise. 
C)  an employer who discriminates will have the same costs as those who do not discriminate. 
D)  discrimination by an employer will reduce production costs since the employer can pay lower wages. 
A)  competitive forces will tend to reduce discrimination. 
B)  the wages of employees who are discriminated against will rise. 
C)  an employer who discriminates will have the same costs as those who do not discriminate. 
D)  discrimination by an employer will reduce production costs since the employer can pay lower wages.

Question 6

The share of college degrees earned by women was ____ in 2010 compared to ____ in 1961.

Accepted Answer

A)  50 percent; 50 percent 
B)  47 percent; 30 percent 
C)  57 percent; 39 percent 
D)  51 percent; 48 percent 
A)  50 percent; 50 percent 
B)  47 percent; 30 percent 
C)  57 percent; 39 percent 
D)  51 percent; 48 percent

Question 7

Which of the following is true?

Accepted Answer

A)  Real federal spending per person was approximately 50 times higher in 1900 than 1800. 
B)  Real federal spending per person was approximately 80 times higher in 2010 than 1916. 
C)  Real federal spending per person grew slowly under the Reagan Administration during the 1980s, but it increased rapidly under the Clinton administration in the 1990s. 
D)  In recent years, government expenditures at the state and local levels have been greater than government spending at the federal level. 
A)  Real federal spending per person was approximately 50 times higher in 1900 than 1800. 
B)  Real federal spending per person was approximately 80 times higher in 2010 than 1916. 
C)  Real federal spending per person grew slowly under the Reagan Administration during the 1980s, but it increased rapidly under the Clinton administration in the 1990s. 
D)  In recent years, government expenditures at the state and local levels have been greater than government spending at the federal level.

Question 8

Which of the following correctly expresses the relationship between the size of government and economic growth?

Accepted Answer

A)  Because it is the private sector in which growth occurs, the size of government is generally unrelated to the rate of economic growth. 
B)  When government is small, an increase in its size may increase economic growth, but beyond some point, further increases in the size of government will reduce economic growth. 
C)  When government is small, an increase in its size may initially lower economic growth, but when it becomes large enough, expansions in government generally increase the rate of economic growth. 
D)  The rate of economic growth appears to be increasing with the size of government for the levels of government that we observe in most major industrialized countries. 
A)  Because it is the private sector in which growth occurs, the size of government is generally unrelated to the rate of economic growth. 
B)  When government is small, an increase in its size may increase economic growth, but beyond some point, further increases in the size of government will reduce economic growth. 
C)  When government is small, an increase in its size may initially lower economic growth, but when it becomes large enough, expansions in government generally increase the rate of economic growth. 
D)  The rate of economic growth appears to be increasing with the size of government for the levels of government that we observe in most major industrialized countries.

Question 9

Which of the following groups is most highly unionized?

Accepted Answer

A)  private wage and salary workers 
B)  government employees 
C)  technical, sales, and service workers 
D)  women 
A)  private wage and salary workers 
B)  government employees 
C)  technical, sales, and service workers 
D)  women

Question 10

The current surplus of the Social Security system is expected to become a deficit sometime around 2018 because the

Accepted Answer

A)  payroll tax rate is scheduled to decline at that time. 
B)  number of workers relative to the number of Social Security recipients will decline as the baby boom generation moves into the retirement phase of life. 
C)  stock market is not expected to perform nearly as well during the next two decades as was the case during the 1980s and 1990s. 
D)  growth rate of the U.S. economy is expected to slow during the next two decades. 
A)  payroll tax rate is scheduled to decline at that time. 
B)  number of workers relative to the number of Social Security recipients will decline as the baby boom generation moves into the retirement phase of life. 
C)  stock market is not expected to perform nearly as well during the next two decades as was the case during the 1980s and 1990s. 
D)  growth rate of the U.S. economy is expected to slow during the next two decades.

Question 11

Which of the following contributed to the severity of the Great Depression?

Accepted Answer

A)  the substantial budget surpluses run during the Hoover administration 
B)  a sharp increase in tariff rates in 1930 
C)  the large reduction in tax rates under the Hoover administration 
D)  a highly expansionary monetary policy followed by the Fed in the late 1920s and early 1930s 
A)  the substantial budget surpluses run during the Hoover administration 
B)  a sharp increase in tariff rates in 1930 
C)  the large reduction in tax rates under the Hoover administration 
D)  a highly expansionary monetary policy followed by the Fed in the late 1920s and early 1930s

Question 12

Which of the following is true?

Accepted Answer

A)  The P/E ratio provides information on the price of a stock relative to its current earnings. 
B)  The P/E ratio provides information on the price of a stock relative to its future earnings. 
C)  The P/E ratio provides information on the price of a stock relative to its past earnings. 
D)  The P/E ratio average from 1950-2008 was 26. 
A)  The P/E ratio provides information on the price of a stock relative to its current earnings. 
B)  The P/E ratio provides information on the price of a stock relative to its future earnings. 
C)  The P/E ratio provides information on the price of a stock relative to its past earnings. 
D)  The P/E ratio average from 1950-2008 was 26.

Question 13

Laws that prohibit collective bargaining agreements requiring a worker to join a union as a condition of employment are called

Accepted Answer

A)  collective bargaining agreements. 
B)  minimum wage laws. 
C)  union shop laws. 
D)  right-to-work laws. 
A)  collective bargaining agreements. 
B)  minimum wage laws. 
C)  union shop laws. 
D)  right-to-work laws.

Question 14

Proved reserves of petroleum are

Accepted Answer

A)  the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B)  the only reserves likely to be available in the future. 
C)  refined products awaiting shipment to the market. 
D)  the total amount of the resource in existence, regardless of the productive effort undertaken to expand the future availability of the resource. 
A)  the verified quantity of petroleum that can be recovered at current prices and levels of technology. 
B)  the only reserves likely to be available in the future. 
C)  refined products awaiting shipment to the market. 
D)  the total amount of the resource in existence, regardless of the productive effort undertaken to expand the future availability of the resource.

Question 15

Why do water supply problems exist in many parts of the world?

Accepted Answer

A)  Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B)  Water markets are missing or incomplete. 
C)  Global warming has increased the evaporation rate of water by over 10%. 
D)  The water supply is unfit for public consumption in many areas due to pollution. 
A)  Efforts to build large-scale reservoirs in arid countries have stalled due to the enormous expense involved in completing these projects. 
B)  Water markets are missing or incomplete. 
C)  Global warming has increased the evaporation rate of water by over 10%. 
D)  The water supply is unfit for public consumption in many areas due to pollution.

Question 16

Which of the following is a lesson that can be learned from monetary policy during the Great Depression?

Accepted Answer

A)  Monetary policy should be changed frequently in response to economic fluctuations. 
B)  Prolonged periods of monetary contraction will retard economic growth. 
C)  Low interest rates will direct an economy toward recovery. 
D)  Monetary policy should focus on variables such as output and employment. 
A)  Monetary policy should be changed frequently in response to economic fluctuations. 
B)  Prolonged periods of monetary contraction will retard economic growth. 
C)  Low interest rates will direct an economy toward recovery. 
D)  Monetary policy should focus on variables such as output and employment.

Question 17

Detailed studies indicate that, on balance, the Social Security retirement system

Accepted Answer

A)  redistributes a substantial amount of income from the rich to the poor. 
B)  redistributes a substantial amount of income from whites to blacks. 
C)  is particularly advantageous to those with a shorter life expectancy. 
D)  is not particularly advantageous to the poor due to their shorter life expectancy. 
A)  redistributes a substantial amount of income from the rich to the poor. 
B)  redistributes a substantial amount of income from whites to blacks. 
C)  is particularly advantageous to those with a shorter life expectancy. 
D)  is not particularly advantageous to the poor due to their shorter life expectancy.

Question 18

Compared with 1920, the United States today has

Accepted Answer

A)  far less forest land. 
B)  far more forest land. 
C)  about the same amount of forest land. 
D)  far fewer trees growing per acre of forest land. 
A)  far less forest land. 
B)  far more forest land. 
C)  about the same amount of forest land. 
D)  far fewer trees growing per acre of forest land.

Question 19

The concept of "proved reserves" refers to the amount of a resource that can be produced

Accepted Answer

A)  in one year's time. 
B)  in the next 10 years. 
C)  before it runs out. 
D)  at current levels of expected prices and technology. 
A)  in one year's time. 
B)  in the next 10 years. 
C)  before it runs out. 
D)  at current levels of expected prices and technology.

Question 20

The Kyoto Protocol

Accepted Answer

A)  is an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels. 
B)  should be rejected because the benefits of a warming climate will unquestionably be greater than the costs. 
C)  would have no net effect on the global economy. 
D)  was ratified by the Congress of the United States. 
A)  is an international treaty that requires industrial nations to limit carbon dioxide emissions to 1990 levels. 
B)  should be rejected because the benefits of a warming climate will unquestionably be greater than the costs. 
C)  would have no net effect on the global economy. 
D)  was ratified by the Congress of the United States.

Increased spending on which of the following items is most likely to increase the size of government during the years following 2010?

Government expenditures as a percent of GDP in the United States

Interest payments on home mortgages and home equity loans are tax deductible. This tax deductibility encourages households to

Which of the following is the most efficient method to reduce pollution emissions?

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

The share of college degrees earned by women was in 2010 compared to in 1961.

Which of the following is true?

Which of the following correctly expresses the relationship between the size of government and economic growth?

Which of the following groups is most highly unionized?

The current surplus of the Social Security system is expected to become a deficit sometime around 2018 because the

Which of the following contributed to the severity of the Great Depression?

Which of the following is true?

Laws that prohibit collective bargaining agreements requiring a worker to join a union as a condition of employment are called

Proved reserves of petroleum are

Why do water supply problems exist in many parts of the world?

Which of the following is a lesson that can be learned from monetary policy during the Great Depression?

Detailed studies indicate that, on balance, the Social Security retirement system

Compared with 1920, the United States today has

The concept of "proved reserves" refers to the amount of a resource that can be produced

The Kyoto Protocol

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Exam 16: Applying the Basics: Special Topics in Economics

Increased spending on which of the following items is most likely to increase the size of government during the years following 2010?

Government expenditures as a percent of GDP in the United States

Interest payments on home mortgages and home equity loans are tax deductible. This tax deductibility encourages households to

Which of the following is the most efficient method to reduce pollution emissions?

When employment discrimination results from the personal prejudices of employers, economic theory suggests that

The share of college degrees earned by women was ____ in 2010 compared to ____ in 1961.

Which of the following is true?

Which of the following correctly expresses the relationship between the size of government and economic growth?

Which of the following groups is most highly unionized?

The current surplus of the Social Security system is expected to become a deficit sometime around 2018 because the

Which of the following contributed to the severity of the Great Depression?

Which of the following is true?

Laws that prohibit collective bargaining agreements requiring a worker to join a union as a condition of employment are called

Proved reserves of petroleum are

Why do water supply problems exist in many parts of the world?

Which of the following is a lesson that can be learned from monetary policy during the Great Depression?

Detailed studies indicate that, on balance, the Social Security retirement system

Compared with 1920, the United States today has

The concept of "proved reserves" refers to the amount of a resource that can be produced

The Kyoto Protocol

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

The share of college degrees earned by women was in 2010 compared to in 1961.