Question 1

Progressive income taxes are designed to

Accepted Answer

A) make the distribution of income less equal. 
B) leave unchanged the distribution of income. 
C) let the market determine the distribution of income after taxes. 
D) make the distribution of income more equal. 
A) make the distribution of income less equal. 
B) leave unchanged the distribution of income. 
C) let the market determine the distribution of income after taxes. 
D) make the distribution of income more equal.

Question 2

Which of the following is true about the United States?

Accepted Answer

A) There has only been one recession in U.S.history. 
B) There have been recessions every couple of years throughout U.S.history. 
C) Recessions have never occurred in the United States. 
D) Recessions have occurred periodically in U.S.history. 
E) Recessions in the United States have generally been worse than in other countries. 
A) There has only been one recession in U.S.history. 
B) There have been recessions every couple of years throughout U.S.history. 
C) Recessions have never occurred in the United States. 
D) Recessions have occurred periodically in U.S.history. 
E) Recessions in the United States have generally been worse than in other countries.

Question 3

How does the United States compare to other advanced, industrialized economies on the issue of openness?

Accepted Answer

A) It is completely closed. 
B) It is one of the less open of them. 
C) It is about average in openness. 
D) It is one of the more open of them. 
E) It is the most open of them. 
A) It is completely closed. 
B) It is one of the less open of them. 
C) It is about average in openness. 
D) It is one of the more open of them. 
E) It is the most open of them.

Question 4

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 5

The payments to owners of capital include

Accepted Answer

A) interest and profits. 
B) debt and taxes. 
C) wages and salaries. 
D) expenses and bonuses. 
E) All of the above are correct. 
A) interest and profits. 
B) debt and taxes. 
C) wages and salaries. 
D) expenses and bonuses. 
E) All of the above are correct.

Question 6

According to Robert Reich, secretary of Labor in the Clinton administration,

Accepted Answer

A) the identity of American companies is clear, and laws should be written accordingly. 
B) foreign companies are clearly different from American companies. 
C) multinational companies have clear bases of operations, which form their identity. 
D) it is almost impossible to define the nationality of a multinational company. 
E) identifying the country of origin of a product is almost impossible, but essential for proper regulation. 
A) the identity of American companies is clear, and laws should be written accordingly. 
B) foreign companies are clearly different from American companies. 
C) multinational companies have clear bases of operations, which form their identity. 
D) it is almost impossible to define the nationality of a multinational company. 
E) identifying the country of origin of a product is almost impossible, but essential for proper regulation.

Question 7

Government plays a role in which type of economy?

Accepted Answer

A) only free market economies like the United States 
B) only socialist economies 
C) only mixed economies 
D) all economies 
A) only free market economies like the United States 
B) only socialist economies 
C) only mixed economies 
D) all economies

Question 8

Which of the following is the most closed economy?

Accepted Answer

A) Germany 
B) Canada 
C) Mexico 
D) the United States 
A) Germany 
B) Canada 
C) Mexico 
D) the United States

Question 9

In a mixed economy, there is some public influence over the workings of free markets.

Accepted Answer

A) True 
 B)False

Question 10

There are about 5 million business firms in the Unites States.

Accepted Answer

A) True 
 B)False

Question 11

Prosperity in the United States is evenly distributed across the fifty states.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Gross domestic product is

Accepted Answer

A) the largest industry in an economy. 
B) the money value of all final goods and services produced in a year. 
C) the volume of goods and services which are subject to international trade. 
D) goods and services produced by private companies. 
E) non-market production of goods and services. 
A) the largest industry in an economy. 
B) the money value of all final goods and services produced in a year. 
C) the volume of goods and services which are subject to international trade. 
D) goods and services produced by private companies. 
E) non-market production of goods and services.

Question 14

The factors of production include all goods and services produced in an economy.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following areas employed more workers in 2013?

Accepted Answer

A) educational and health services 
B) business and professional services 
C) retail trade 
D) manufacturing companies 
A) educational and health services 
B) business and professional services 
C) retail trade 
D) manufacturing companies

Question 17

A firm that does business all over the world is called a(n)

Accepted Answer

A) multinational corporation. 
B) international conglomerate. 
C) competitive corporation. 
D) government-owned business. 
A) multinational corporation. 
B) international conglomerate. 
C) competitive corporation. 
D) government-owned business.

Question 18

A mixed economy is one that combines public and private ownership of property.

Accepted Answer

A) True 
 B)False

Question 19

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

Question 20

Unemployment in the United States varies considerably over time.

Accepted Answer

A) True 
 B)False

Exam 2: The Economy: Myth and Reality

Progressive income taxes are designed to

Which of the following is true about the United States?

How does the United States compare to other advanced, industrialized economies on the issue of openness?

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

The payments to owners of capital include

According to Robert Reich, secretary of Labor in the Clinton administration,

Government plays a role in which type of economy?

Which of the following is the most closed economy?

In a mixed economy, there is some public influence over the workings of free markets.

There are about 5 million business firms in the Unites States.

Prosperity in the United States is evenly distributed across the fifty states.

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

Gross domestic product is

The factors of production include all goods and services produced in an economy.

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

Which of the following areas employed more workers in 2013?

A firm that does business all over the world is called a(n)

A mixed economy is one that combines public and private ownership of property.

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

Unemployment in the United States varies considerably over time.

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: the Price System

The Shortcomings of Free Markets

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

Is Useconomic Leadership Threatened

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

He 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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