CUA
Which of the following would be considered a positive aspect of globalization?
a. Workers in India may make less money than Americans doing the same job
b. Increase in domestic unemployment
c. Increase in global pollution
d. Lower cost of living for Americans
Lower cost of living for Americans
How are consumers affected by inflation?
a. Consumer purchasing power increases.
b. Consumer purchasing power decreases.
c. Consumer purchasing power stays the same.
d. Consumer purchasing power cannot be predicted.
Consumer purchasing power decreases.
If a dollar bill became a one million dollar bill what is that?
a. Hyperinflation
b. Recession
c. Deflation
d. Unemployment
Hyperinflation
Which of the following are essential for a free enterprise (free market) system?
a. Government ownership and guaranteed employment
b. Free trade and private property
c. High incomes and economic equality for all
d. Government assistance and public housing
Free trade and private property
Which of the following is TRUE in a recession when GDP falls?
a. The unemployment rate also falls
b. The unemployment rate also rises
c. Unemployment is unaffected
d. Employers also offer higher wages
The unemployment rate also rises
Which of the following BEST describes an entrepreneur?
a. McDonald’s Cashier
b. Owner of Dunkin Donuts
c. CEO of Apple
d. Inventor of Scrub Daddy
Inventor of Scrub Daddy
Which phase of the business cycle are businesses MOST likely to increase investment?
a. Expansion
b. Recession
c. Contraction
d. Depression
Expansion
Which of the following would be considered a negative aspect of globalization?
a. More wealth created outside of the United States
b. Lower cost of living
c. Domestic workers lose their jobs in some industries, such as steel production
d. Higher standard of living
Domestic workers lose their jobs in some industries, such as steel production
Mexico currently has a 5% GDP growth, 8% inflation, and an unemployment rate of 4%. Which type of fiscal
policy should be implemented by the government?
a. Expansionary Fiscal Policy
b. Contractionary Fiscal Policy
Contractionary Fiscal Policy
How does entrepreneurship contribute to economic growth?
a. Predicting consumer wants and needs
b. Creating and regulating laws
c. Providing physical labor
d. Supervising employers and employees
Predicting consumer wants and needs
The objective of fiscal policy during a recession is which of the following?
a. Increase total spending and increase unemployment
b. Increase total spending and reduce unemployment
c. Reduce interest rates and increase the money supply
d. Raise interest rates and decrease the money supply
Increase total spending and reduce unemployment
Which of the following create wealth and prosperity?
a. Government increasing supply of money
b. Passing laws that require businesses to pay higher wages
c. Careful government planning of each person’s economic activity
d. Free people investing their time, energy, resources, and trading with one another.
Free people investing their time, energy, resources, and trading with one another.
In which type of economy are resources owned and controlled by private property owners rather than the state
or government?
a. Free-Market Economy
b. Socialist Economy
c. Communist Economy
d. Command Economy
Free-Market Economy
What is fiscal policy?
a. Lowering the interest rate
b. Raising the interest rate
c. Lowering the reserve requirement
d. Increasing government spending
Increasing government spending
What is the role of government in a command economy?
a. It owns and controls economic resources
b. It encourages entrepreneurship and private property
c. It pays little attention to income distribution
d. It restricts its activities to protecting private property
It owns and controls economic resources
Why can outsourcing have a negative impact on the domestic economy?
a. it leads to the development of emerging markets
b. it can cause an increase in the unemployment rate
c. it can have an adverse effect on profits
d. it leads to more expensive products
it can cause an increase in the unemployment rate
What is the difference between Real GDP and Nominal GDP?
a. Real GDP accounts for inflation.
b. Nominal GDP accounts for inflation.
c. Nominal GDP measures fairness and equality amongst a country’s citizens.
d. Real GDP measures fairness and equality amongst a country’s citizens.
Real GDP accounts for inflation.
Choose the BEST example that would fall under the Factors of Production category, labor.
a. Floral/software specialists.
b. Strict health department regulations.
c. A unique gift people could send to loved ones.
d. Inventory and equipment.
Floral/software specialists.
Which of the following best describes the natural resources available to a company and physical geographic
location of a company?
a. Land
b. Labor
c. Capital
d. Entrepreneurship
Land
The saying, “There ain’t no such thing as a free lunch, “describes which of the following economic concepts?
a. Incentive
b. Resources
c. Production Possibilities
d. Opportunity Cost
Opportunity Cost
Illegally produced goods and services are which of the following?
a. Included when the illegal income is reported on tax forms
b. Excluded from GDP
c. Included if they can be measured
d. Included in GDP from actual figures reported
Excluded from GDP
Which of the following is NOT an example of globalization?
a. Coca-Cola sells their soft drinks worldwide
b. An American nurse works at a hospital in Atlanta, Georgia
c. Caterpillar and Komatsu both sell earthmoving equipment worldwide
d. Boeing sells jet planes to firms in Japan
An American nurse works at a hospital in Atlanta, Georgia
Which of the following economic indicators is intended as a measure of economic growth?
a. GDP (Gross Domestic Product)
b. CPI (Consumer Price Index)
c. Dow Jones Industrial Average
d. M1 Money Supply
GDP (Gross Domestic Product)
Which of the following describe the effects of trade?
a. trade makes only people in the importing country better off
b. trade makes only people in the exporting country better off
c. trade makes people in both exporting and importing country better off
d. trade makes no one better off
trade makes people in both exporting and importing country better off
When calculating GDP, which of the following is TRUE regarding imports?
a. they are subtracted because we are purchasing foreign goods
b. they are added because we are purchasing domestic goods
c. they are subtracted because we are purchasing domestic goods
d. they are added because we are purchasing foreign goods
they are subtracted because we are purchasing foreign goods