Question 1

The difference between fiscal policy and monetary policy is that

Accepted Answer

A) fiscal policy is macroeconomic policy and monetary policy is microeconomic policy 
B) monetary policy is macroeconomic policy and fiscal policy is microeconomic policy 
C) fiscal policy involves regulation of natural monopolies and monetary policy involves the provision of public goods 
D) monetary policy involves regulation of the money supply and fiscal policy involves government spending and taxing 
E) fiscal policy involves the promotion of competition and monetary policy involves collecting money to pay for taxes 
A) fiscal policy is macroeconomic policy and monetary policy is microeconomic policy 
B) monetary policy is macroeconomic policy and fiscal policy is microeconomic policy 
C) fiscal policy involves regulation of natural monopolies and monetary policy involves the provision of public goods 
D) monetary policy involves regulation of the money supply and fiscal policy involves government spending and taxing 
E) fiscal policy involves the promotion of competition and monetary policy involves collecting money to pay for taxes

Question 2

Which of the following is a disadvantage of the corporation compared to the sole proprietorship?

Accepted Answer

A) limited liability 
B) difficulty raising start-up money 
C) lack of profitability 
D) corporate income is taxed twice 
E) corporations are more vulnerable in the case of the death of an owner 
A) limited liability 
B) difficulty raising start-up money 
C) lack of profitability 
D) corporate income is taxed twice 
E) corporations are more vulnerable in the case of the death of an owner

Question 3

Restricting imports of Brazilian shoes will

Accepted Answer

A) raise the price of both Brazilian and domestically produced shoes 
B) raise the price of Brazilian shoes but lower the price of domestically produced shoes 
C) lower the price of Brazilian shoes but raise the price of domestically produced shoes 
D) lower the price of both Brazilian and domestically produced shoes 
E) benefit the producers of shoes in Brazil 
A) raise the price of both Brazilian and domestically produced shoes 
B) raise the price of Brazilian shoes but lower the price of domestically produced shoes 
C) lower the price of Brazilian shoes but raise the price of domestically produced shoes 
D) lower the price of both Brazilian and domestically produced shoes 
E) benefit the producers of shoes in Brazil

Question 4

Households act as demanders when they demand

Accepted Answer

A) that corporate executives and government officials be held accountable for their actions 
B) dividends from the stocks they hold 
C) interest and capital gains from the bonds they hold 
D) goods and services from firms and the government 
E) payment for the goods and services they sell to firms and governments 
A) that corporate executives and government officials be held accountable for their actions 
B) dividends from the stocks they hold 
C) interest and capital gains from the bonds they hold 
D) goods and services from firms and the government 
E) payment for the goods and services they sell to firms and governments

Question 5

Which of the following represents the best example of proprietor's income?

Accepted Answer

A) the paycheck that Freeda brings home from her job as a computer programer 
B) the interest that Hans earns from the savings account he has with USA Bank 
C) the revenue that Janet has left over after she pays all the expenses associated with running her software development business 
D) the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land 
E) the check that Trisha gets each month from the Social Security Administration 
A) the paycheck that Freeda brings home from her job as a computer programer 
B) the interest that Hans earns from the savings account he has with USA Bank 
C) the revenue that Janet has left over after she pays all the expenses associated with running her software development business 
D) the check that Hunter receives each month for leasing his land to the natural gas company that is drilling on his land 
E) the check that Trisha gets each month from the Social Security Administration

Question 6

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $1,000 in taxes and a person earning $60,000 pays $1,000 in taxes.What type of tax is this?

Accepted Answer

A) progressive 
B) proportional 
C) regressive 
D) transgressive 
E) unfair 
A) progressive 
B) proportional 
C) regressive 
D) transgressive 
E) unfair

Question 7

Externalities can occur as a result of either production or consumption activities.

Accepted Answer

A) True 
 B)False

Question 8

Contracts are enforced by

Accepted Answer

A) the firms that make the contracts through buy-out clauses 
B) law firms that specialize in contract enforcement 
C) corporations specializing in contract writing and enforcement 
D) the government through the judicial system 
E) both households and firms through customer relations departments 
A) the firms that make the contracts through buy-out clauses 
B) law firms that specialize in contract enforcement 
C) corporations specializing in contract writing and enforcement 
D) the government through the judicial system 
E) both households and firms through customer relations departments

Question 9

A public good is one that is supplied to

Accepted Answer

A) only people who pay for it 
B) only people who do not pay for it 
C) all people,regardless of whether they pay or not 
D) the government from private firms 
E) foreign governments from our federal government 
A) only people who pay for it 
B) only people who do not pay for it 
C) all people,regardless of whether they pay or not 
D) the government from private firms 
E) foreign governments from our federal government

Question 10

Stockholders share in the profits of a corporation

Accepted Answer

A) in proportion to their years of stock ownership 
B) in proportion to their ownership of stock 
C) equally regardless of number of shares owned 
D) only if they participate in firm management decisions 
E) only if they attend stockholders' meetings 
A) in proportion to their years of stock ownership 
B) in proportion to their ownership of stock 
C) equally regardless of number of shares owned 
D) only if they participate in firm management decisions 
E) only if they attend stockholders' meetings

Question 11

One thing that is not true about cooperatives is that they

Accepted Answer

A) put out raw materials,like wool and cotton,to rural households that turn it into finished products 
B) pool resources to buy and sell more efficiently 
C) try to minimize costs 
D) operate with limited liability of members 
E) enjoy tax-exempt status 
A) put out raw materials,like wool and cotton,to rural households that turn it into finished products 
B) pool resources to buy and sell more efficiently 
C) try to minimize costs 
D) operate with limited liability of members 
E) enjoy tax-exempt status

Question 12

Which of the following is not a function of government?

Accepted Answer

A) promotion of competition 
B) stabilization to achieve the macroeconomic goals 
C) redistribution of income through taxation and transfer payments 
D) production of public goods 
E) providing the economy's private goods 
A) promotion of competition 
B) stabilization to achieve the macroeconomic goals 
C) redistribution of income through taxation and transfer payments 
D) production of public goods 
E) providing the economy's private goods

Question 13

Which of the following is most likely to be a partnership?

Accepted Answer

A) Uncle Mort's Red Wrigglers 
B) the accounting firm of Hope and Williams 
C) General Motors 
D) the Boston Symphony Orchestra 
E) the U.S.Post Office 
A) Uncle Mort's Red Wrigglers 
B) the accounting firm of Hope and Williams 
C) General Motors 
D) the Boston Symphony Orchestra 
E) the U.S.Post Office

Question 14

A cottage industry is one that

Accepted Answer

A) produces rural housing 
B) takes advantage of the division of labor 
C) uses highly specialized resources in a complex production process 
D) produces cottage cheese 
E) carries out production in workers' homes 
A) produces rural housing 
B) takes advantage of the division of labor 
C) uses highly specialized resources in a complex production process 
D) produces cottage cheese 
E) carries out production in workers' homes

Question 15

Determining the most socially desirable level of income equality or inequality

Accepted Answer

A) is done through markets,rather than by the government 
B) is done directly by firms 
C) involves normative economics 
D) involves evaluation of public goods 
E) involves evaluation of all externalities,both positive and negative 
A) is done through markets,rather than by the government 
B) is done directly by firms 
C) involves normative economics 
D) involves evaluation of public goods 
E) involves evaluation of all externalities,both positive and negative

Question 16

Trade restrictions result in all of the following except one.Which is the exception?

Accepted Answer

A) higher prices 
B) fewer choices 
C) improved quality 
D) misallocation of resources 
E) reduced competition 
A) higher prices 
B) fewer choices 
C) improved quality 
D) misallocation of resources 
E) reduced competition

Question 17

Which of the following have their profits taxed twice?

Accepted Answer

A) sole proprietorships 
B) partnerships 
C) corporations 
D) nonprofit institutions 
E) S-corporations 
A) sole proprietorships 
B) partnerships 
C) corporations 
D) nonprofit institutions 
E) S-corporations

Question 18

If the real wage decreases,the opportunity cost of working in the home will

Accepted Answer

A) increase 
B) decrease 
C) not be affected 
D) increase as long as worker productivity also rises 
E) increase only if households want to maintain their standard of living 
A) increase 
B) decrease 
C) not be affected 
D) increase as long as worker productivity also rises 
E) increase only if households want to maintain their standard of living

Question 19

A public good is available to all regardless of who pays for it and who does not.

Accepted Answer

A) True 
 B)False

Question 20

Households act as demanders when they

Accepted Answer

A) vote for President 
B) recieve dividends from the stocks they hold 
C) recieve interest and capital gains from the bonds they hold 
D) buy a car from the local car dealer 
E) recieve payment for resources they provide to a Fortune 500 company 
A) vote for President 
B) recieve dividends from the stocks they hold 
C) recieve interest and capital gains from the bonds they hold 
D) buy a car from the local car dealer 
E) recieve payment for resources they provide to a Fortune 500 company

Exam 3: Economic Decision Makers

The difference between fiscal policy and monetary policy is that

Which of the following is a disadvantage of the corporation compared to the sole proprietorship?

Restricting imports of Brazilian shoes will

Households act as demanders when they demand

Which of the following represents the best example of proprietor's income?

Consider a system in which a person earning $10,000 pays $1,000 in taxes,a person earning $25,000 pays $1,000 in taxes and a person earning $60,000 pays $1,000 in taxes.What type of tax is this?

Externalities can occur as a result of either production or consumption activities.

Contracts are enforced by

A public good is one that is supplied to

Stockholders share in the profits of a corporation

One thing that is not true about cooperatives is that they

Which of the following is not a function of government?

Which of the following is most likely to be a partnership?

A cottage industry is one that

Determining the most socially desirable level of income equality or inequality

Trade restrictions result in all of the following except one.Which is the exception?

Which of the following have their profits taxed twice?

If the real wage decreases,the opportunity cost of working in the home will

A public good is available to all regardless of who pays for it and who does not.

Households act as demanders when they

The Art and Science of Economic Analysis

Economic Tools and Economics Systems

Demand, supply, and Markets

Introduction to Macroeconomics

Tracking the Useconomy

Unemployment and Inflation

Productivity and Growth

Aaggregate Expenditure and Aggregate Demand

Baggregate Expenditure and Aggregate Demand

Aggregate Supply

Fiscal Policy

Federal Budgets and Public Policy

Money and the Financial System

Banking and the Money Supply

Monetary Theory and Policy

Macro Policy Debate: Active or Passive

International Trade

Externalities and the Environment

International Finance

Economic Development

understanding Graphs

National Income Accounts

The Algebra of Demand-Side Equilibrium

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