Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

When the government's spending is less than tax revenue, it implies that:

Accepted Answer

A)  the government budget is balanced. 
B)  the government is running a deficit. 
C)  there is a budget surplus. 
D)  there is a higher chance of default by the government. 
E)  the government needs to borrow from the central bank. 
A)  the government budget is balanced. 
B)  the government is running a deficit. 
C)  there is a budget surplus. 
D)  there is a higher chance of default by the government. 
E)  the government needs to borrow from the central bank. C

Question 3

A surplus in a country's trade balance means that:

Accepted Answer

A)  its net exports exceed transfer payments. 
B)  the country's currency is over-valued. 
C)  the value of its net exports is positive. 
D)  imports into the country exceed exports. 
E)  domestic savings exceeds domestic investment. 
A)  its net exports exceed transfer payments. 
B)  the country's currency is over-valued. 
C)  the value of its net exports is positive. 
D)  imports into the country exceed exports. 
E)  domestic savings exceeds domestic investment. C

Question 4

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Accepted Answer

A)  are considered to be still-developing countries. 
B)  are the major trade partners of the U.S. 
C)  are considered as underdeveloped economies. 
D)  have highly interdependent economies. 
E)  are considered highly-developed countries. 
A)  are considered to be still-developing countries. 
B)  are the major trade partners of the U.S. 
C)  are considered as underdeveloped economies. 
D)  have highly interdependent economies. 
E)  are considered highly-developed countries.

Question 5

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

Accepted Answer

A)  joint ventures. 
B)  sole proprietorship firms. 
C)  partnership firms. 
D)  multinational firms. 
E)  co-operative firms. 
A)  joint ventures. 
B)  sole proprietorship firms. 
C)  partnership firms. 
D)  multinational firms. 
E)  co-operative firms.

Question 6

Which of the following flows from the government to the households?

Accepted Answer

A)  Goods and services 
B)  Resources of production 
C)  Taxes 
D)  Government services 
E)  Loans 
A)  Goods and services 
B)  Resources of production 
C)  Taxes 
D)  Government services 
E)  Loans

Question 7

Financial intermediaries are best described as:

Accepted Answer

A)  informal institutions that provide funds to the government to manage budget deficits. 
B)  institutions that accept deposits and make loans. 
C)  institutions that control the money supply in the economy. 
D)  institutions that provide financial aid to foreign countries. 
E)  individuals who manage other's investment portfolios. 
A)  informal institutions that provide funds to the government to manage budget deficits. 
B)  institutions that accept deposits and make loans. 
C)  institutions that control the money supply in the economy. 
D)  institutions that provide financial aid to foreign countries. 
E)  individuals who manage other's investment portfolios.

Question 8

Identify the international organization that makes loans to developing countries.

Accepted Answer

A)  The World Bank 
B)  The Federal Reserve 
C)  The World Trade Organization 
D)  The Industrial Development Board 
E)  The Bank of England 
A)  The World Bank 
B)  The Federal Reserve 
C)  The World Trade Organization 
D)  The Industrial Development Board 
E)  The Bank of England

Question 9

Which of the following is considered a financial intermediary?

Accepted Answer

A)  The Federal Reserve 
B)  A bankruptcy court 
C)  The U.S. Department of Commerce 
D)  A credit union 
E)  A foreign exchange 
A)  The Federal Reserve 
B)  A bankruptcy court 
C)  The U.S. Department of Commerce 
D)  A credit union 
E)  A foreign exchange

Question 10

Which of the following does not constitute a household consumption item?

Accepted Answer

A)  A pair of jeans 
B)  A bottle of Beck's beer 
C)  A haircut 
D)  A steam turbine electric generator 
E)  A packet of breakfast cereal 
A)  A pair of jeans 
B)  A bottle of Beck's beer 
C)  A haircut 
D)  A steam turbine electric generator 
E)  A packet of breakfast cereal

Question 11

If a corporation cannot pay its debts, creditors cannot seek payment from shareholders' personal wealth.

Accepted Answer

A) True 
 B)False

Question 12

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 only 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 only 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 13

The owner of a sole proprietorship has limited liability, while stockholders of corporations have unlimited liability.

Accepted Answer

A) True 
 B)False

Question 14

When the flow of money from the foreign countries to the domestic firms equals the flow of money from the home country to the foreign firms, _____.

Accepted Answer

A)  a trade surplus exists 
B)  an equal amount of agricultural and manufactured products are exported 
C)  a trade deficit exists 
D)  an equal amount of goods and services are imported 
E)  the value of net exports is zero 
A)  a trade surplus exists 
B)  an equal amount of agricultural and manufactured products are exported 
C)  a trade deficit exists 
D)  an equal amount of goods and services are imported 
E)  the value of net exports is zero

Question 15

A person obtains income by selling the services of the resources that he or she owns.

Accepted Answer

A) True 
 B)False

Question 16

The United States is the largest consumer and importer of grains and other agricultural output in the world.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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 19

Scenario 4-1?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 A has net exports of:

Accepted Answer

A)  $18 million. 
B)  $8 million. 
C)  $13 million. 
D)  $9 million. 
E)  $6 million. 
A)  $18 million. 
B)  $8 million. 
C)  $13 million. 
D)  $9 million. 
E)  $6 million.

Question 20

The _____ tend to have a smaller public sector relative to the total economy.

Accepted Answer

A)  socialist economies 
B)  centrally planned economies 
C)  autocratic economies 
D)  market economies 
E)  mercantilist economies 
A)  socialist economies 
B)  centrally planned economies 
C)  autocratic economies 
D)  market economies 
E)  mercantilist economies

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

When the government's spending is less than tax revenue, it implies that:

A surplus in a country's trade balance means that:

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

Which of the following flows from the government to the households?

Financial intermediaries are best described as:

Identify the international organization that makes loans to developing countries.

Which of the following is considered a financial intermediary?

Which of the following does not constitute a household consumption item?

If a corporation cannot pay its debts, creditors cannot seek payment from shareholders' personal wealth.

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

The owner of a sole proprietorship has limited liability, while stockholders of corporations have unlimited liability.

When the flow of money from the foreign countries to the domestic firms equals the flow of money from the home country to the foreign firms, _____.

A person obtains income by selling the services of the resources that he or she owns.

The United States is the largest consumer and importer of grains and other agricultural output in the world.

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

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

The _____ tend to have a smaller public sector relative to the total economy.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

National Income Accounting

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

Filters

Exam 4: The Aggregate Economy

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

When the government's spending is less than tax revenue, it implies that:

A surplus in a country's trade balance means that:

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

Which of the following flows from the government to the households?

Financial intermediaries are best described as:

Identify the international organization that makes loans to developing countries.

Which of the following is considered a financial intermediary?

Which of the following does not constitute a household consumption item?

If a corporation cannot pay its debts, creditors cannot seek payment from shareholders' personal wealth.

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

The owner of a sole proprietorship has limited liability, while stockholders of corporations have unlimited liability.

When the flow of money from the foreign countries to the domestic firms equals the flow of money from the home country to the foreign firms, _____.

A person obtains income by selling the services of the resources that he or she owns.

The United States is the largest consumer and importer of grains and other agricultural output in the world.

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

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

The _____ tend to have a smaller public sector relative to the total economy.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

National Income Accounting

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

Filters