Question 1

What causes countries to become wealthier over time?

Accepted Answer

A)  government central planning 
B)  economic growth 
C)  price controls on key natural resources 
D)  restrictions on imported goods 
A)  government central planning 
B)  economic growth 
C)  price controls on key natural resources 
D)  restrictions on imported goods

Question 2

Today GDP per capita in South Korea is ______ than in North Korea.

Accepted Answer

A)  10 times less 
B)  two times less 
C)  two times greater 
D)  10 times greater 
A)  10 times less 
B)  two times less 
C)  two times greater 
D)  10 times greater

Question 3

Economic wealth is uncorrelated with the level of women's rights and political liberty in a country.

Accepted Answer

A) True 
 B)False

Question 4

When the government decreases the supply of money,there is an increase in the general level of prices.

Accepted Answer

A) True 
 B)False

Question 5

Monetary and fiscal policies have the potential to make a recession worse.

Accepted Answer

A) True 
 B)False

Question 6

The historical rise in living standards of American workers is primarily a result of:

Accepted Answer

A)  the influence of labor unions in America. 
B)  tariff protection imposed by the American government. 
C)  the enactment of minimum wage laws in America. 
D)  the rise in American productivity. 
A)  the influence of labor unions in America. 
B)  tariff protection imposed by the American government. 
C)  the enactment of minimum wage laws in America. 
D)  the rise in American productivity.

Question 7

Why do you think economists generally support increased trade?

Accepted Answer

People will be better off if t

Question 8

A National Geographic Channel special,Inside North Korea,reported on Dr.Sanduk Ruit's humanitarian mission to North Korea,one of the poorest countries in the world.Over a 10-day period he performed 1,000 relatively straightforward eye surgeries to remove blindness due to cataracts.Why is it not surprising that North Korea doesn't have doctors to perform the surgery?

Accepted Answer

A)  North Korea specializes in other things and trades for medical services. 
B)  North Korea is too poor to afford qualified eye doctors. 
C)  The invisible hand allocates resources to other areas. 
D)  North Korea suffers from too many economic booms and busts to afford such surgeries. 
A)  North Korea specializes in other things and trades for medical services. 
B)  North Korea is too poor to afford qualified eye doctors. 
C)  The invisible hand allocates resources to other areas. 
D)  North Korea suffers from too many economic booms and busts to afford such surgeries.

Question 9

During the Great Depression the national unemployment rate rose above 20 percent.

Accepted Answer

A) True 
 B)False

Question 10

Inflation:

Accepted Answer

A)  is a decrease in the general level of prices. 
B)  is an increase in the general level of prices. 
C)  makes it easier to figure out real values for goods,services,and investments. 
D)  is a rare problem in macroeconomics. 
A)  is a decrease in the general level of prices. 
B)  is an increase in the general level of prices. 
C)  makes it easier to figure out real values for goods,services,and investments. 
D)  is a rare problem in macroeconomics.

Question 11

Most economists believe the Federal Reserve does more good for than harm to the United States economy.

Accepted Answer

A) True 
 B)False

Question 12

The FDA faces societal trade-offs when it decides how safe drugs need to be before allowing patients to use them.For example,if the FDA raises the cost of testing for drug safety,some safe drugs will never be developed,and people will unnecessarily die.

Accepted Answer

A) True 
 B)False

Question 13

According to economists,when the Food and Drug Administration raises the approval requirements for new drugs:

Accepted Answer

A)  everyone will benefit and be better off. 
B)  society potentially loses a new drug approval. 
C)  everyone but the drug makers will lose. 
D)  people will only demand more drug testing. 
A)  everyone will benefit and be better off. 
B)  society potentially loses a new drug approval. 
C)  everyone but the drug makers will lose. 
D)  people will only demand more drug testing.

Question 14

Which statement is correct regarding the Federal Reserve?

Accepted Answer

A)  Most economists believe that the Federal Reserve does more harm than good. 
B)  The Federal Reserve has developed the ability to manage the economy with great precision. 
C)  Its control of the money supply is not connected to the performance of the economy. 
D)  The Federal Reserve's decisions usually have an immediate effect on the economy's unemployment rate. 
A)  Most economists believe that the Federal Reserve does more harm than good. 
B)  The Federal Reserve has developed the ability to manage the economy with great precision. 
C)  Its control of the money supply is not connected to the performance of the economy. 
D)  The Federal Reserve's decisions usually have an immediate effect on the economy's unemployment rate.

Question 15

One of the effects of economic growth is:

Accepted Answer

A)  a higher rate of infant mortality. 
B)  less leisure time. 
C)  a lower level of reported happiness. 
D)  better sanitation and health outcomes. 
A)  a higher rate of infant mortality. 
B)  less leisure time. 
C)  a lower level of reported happiness. 
D)  better sanitation and health outcomes.

Question 16

During the period of dramatic inflation in Zimbabwe,if you had one trillion Zimbabwean dollars,you still were not very rich.

Accepted Answer

A) True 
 B)False

Question 17

A policymaker wants to reduce inflation.In order to make an intelligent decision about how to do so,the policymaker:

Accepted Answer

A)  should use a simple rule: once inflation is gone,it will always be gone. 
B)  needs to know the causes of inflation,for example,the government's printing of too much money. 
C)  should find out if people are really better off as a result of the inflation. 
D)  should realize that inflation can be reduced without any costs. 
A)  should use a simple rule: once inflation is gone,it will always be gone. 
B)  needs to know the causes of inflation,for example,the government's printing of too much money. 
C)  should find out if people are really better off as a result of the inflation. 
D)  should realize that inflation can be reduced without any costs.

Question 18

The real power of trade lies in people's ability to:

Accepted Answer

A)  get things they can't produce. 
B)  get the lowest price possible. 
C)  increase their consumption. 
D)  specialize and increase production. 
A)  get things they can't produce. 
B)  get the lowest price possible. 
C)  increase their consumption. 
D)  specialize and increase production.

Question 19

Wherein lies the power of trade?

Accepted Answer

The power of trade comes from

Question 20

Many companies pay their sales employees based on commissions-the more they sell,the more they get paid.This practice highlights the role of:

Accepted Answer

A)  marginal thinking. 
B)  incentives. 
C)  trade-offs. 
D)  sunk costs. 
A)  marginal thinking. 
B)  incentives. 
C)  trade-offs. 
D)  sunk costs.

What causes countries to become wealthier over time?

Today GDP per capita in South Korea is ______ than in North Korea.

Economic wealth is uncorrelated with the level of women's rights and political liberty in a country.

When the government decreases the supply of money,there is an increase in the general level of prices.

Monetary and fiscal policies have the potential to make a recession worse.

The historical rise in living standards of American workers is primarily a result of:

Why do you think economists generally support increased trade?

During the Great Depression the national unemployment rate rose above 20 percent.

Inflation:

Most economists believe the Federal Reserve does more good for than harm to the United States economy.

The FDA faces societal trade-offs when it decides how safe drugs need to be before allowing patients to use them.For example,if the FDA raises the cost of testing for drug safety,some safe drugs will never be developed,and people will unnecessarily die.

According to economists,when the Food and Drug Administration raises the approval requirements for new drugs:

Which statement is correct regarding the Federal Reserve?

One of the effects of economic growth is:

During the period of dramatic inflation in Zimbabwe,if you had one trillion Zimbabwean dollars,you still were not very rich.

A policymaker wants to reduce inflation.In order to make an intelligent decision about how to do so,the policymaker:

The real power of trade lies in people's ability to:

Wherein lies the power of trade?

Many companies pay their sales employees based on commissions-the more they sell,the more they get paid.This practice highlights the role of:

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters

Exam 1: The Big Ideas

What causes countries to become wealthier over time?

Today GDP per capita in South Korea is ______ than in North Korea.

Economic wealth is uncorrelated with the level of women's rights and political liberty in a country.

When the government decreases the supply of money,there is an increase in the general level of prices.

Monetary and fiscal policies have the potential to make a recession worse.

The historical rise in living standards of American workers is primarily a result of:

Why do you think economists generally support increased trade?

During the Great Depression the national unemployment rate rose above 20 percent.

Inflation:

Most economists believe the Federal Reserve does more good for than harm to the United States economy.

The FDA faces societal trade-offs when it decides how safe drugs need to be before allowing patients to use them.For example,if the FDA raises the cost of testing for drug safety,some safe drugs will never be developed,and people will unnecessarily die.

According to economists,when the Food and Drug Administration raises the approval requirements for new drugs:

Which statement is correct regarding the Federal Reserve?

One of the effects of economic growth is:

During the period of dramatic inflation in Zimbabwe,if you had one trillion Zimbabwean dollars,you still were not very rich.

A policymaker wants to reduce inflation.In order to make an intelligent decision about how to do so,the policymaker:

The real power of trade lies in people's ability to:

Wherein lies the power of trade?

Many companies pay their sales employees based on commissions-the more they sell,the more they get paid.This practice highlights the role of:

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Unemployment and Labor Force Participation

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

Filters