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1. Economic 2 Test Review

2. **NEWS** President Eisenhower Signs Interstate Highway Bill The headline above best describes A. a public service. B. an individual initiative. C. a state program. D. a public good.
3. a public good.
4. Governments produce public goods and services because A. individuals acting alone could not produce them efficiently. B. U.S. businesses refuse to produce them. C. individual businesses are forbidden by law from delivering public commodities. D. the Constitution of the United States requires it.
5. individuals acting alone could not produce them efficiently
6. Public goods and services are provided by: A. State Government B. Local Governments C. Federal Government D. All of the Above
7. All of the Above
8. “Supporting new business start-ups” describes which role of the government in regulating the economy? A. Support Competition B. Provide Public Goods and Services C. Regulating Business D. Protecting Consumer and Property Rights
9. A. Support Competition
10. “Overseeing the way that agencies and companies do business” describes which role of the government in regulating the economy? A. Support Competition B. Provide Public Goods and Services C. Regulating Business D. Protecting Consumer and Property Rights
11. C. Regulating Business
12. A severe recession can result in a(n) A. Inflation B. Peak C. Expansion D. Depression
13. D. Depression
14. The changing in the performance of the economy is called the A. Inflation B. Fiscal Policy C. Business Cycle D. recession
15. C. Business Cycle
16. Soon after President George W. Bush assumed office the economy began to slow and show signs of a(n): A. Inflation B. Recession C. Depression D. Peak
17. B. Recession
18. A general rise in the price of goods and services is: A. Inflation B. Recession C. Depression D. Peak
19. A. Inflation
20. Which of the following is NOT a cause of inflation? A. Surplus of Goods B. Shortage of Goods C. Supply lower than demand D. None of the above
21. A. Surplus of Goods
22. This amendment gave Congress the power to tax incomes: A. 13th B. 14th C. 15th D. 16th
23. D. 16th
24. If the government decides to decrease it’s spending, what happens to the money supply? A. Increases B. Decreases C. Stays the same D. None of the above
25. B. Decreases
26. If the government decides to increase ourtaxes, what happens to the money supply? A. Increases B. Decreases C. Stays the same D. None of the above
27. B. Decreases
28. The government taxes, borrows and spends to: A. influence economic activity B. Provide public goods and services C. Both A and B D. None of the above
29. C. Both A and B
30. What policies might the government implement to combat inflation? Increase taxes Increase government spending Both A and B None of the above
31. Both A and B
32. What policies might the government implement to combat a recession? Reduce taxes Increase taxes Decrease government spending Increase government borrowing
33. Reduce taxes
34. Increase in Demand Increase in Employment Increase in Production What government action will most likely cause the reaction shown in the box? More spending Higher taxes More borrowing Higher revenues
35. More spending
36. A financial institution that is owned by its members is a: A. Savings and Loan B. Credit Union C. Bank D. Security Brokerage
37. B. Credit Union
38. A financial institution that buys and sells stocks for clients is a A. Savings and Loan B. Credit Union C. Bank D. Security Brokerage
39. D. Security Brokerage
40. What is the likely reaction if the Federal Reserve increases the money supply? Interest rates rise and the economy slows down Taxes decrease Interest rates decline and this stimulates the economy None of the above
41. Interest rates decline and this stimulates the economy
42. The Federal Reserve System acts as the central bank for the United States by: Issuing money to banks Lending money to banks Clearing checks All of the above
43. Self Assessment is an important step in career planning because …. It is a government requirement Employers consider this responsible behavior Aspirations should be guided by talent and interest It shows you where the demand is for a particular job
44. Aspirations should be guided by talents and interests
45. In order to produce goods, a business needs all of the following EXCEPT? Natural Resources Human Resources Capital Resources Incentive Resources
46. Incentive Resources
47. The real total cost of taking out a loan is equal to the amount borrowed plus the….. Interest Revenue Entrepreneur Resource
48. Interest
49. Essential factors of the economy of the United States include all of the following except….. Private property Competition Profits Central Planning
50. Central Planning….
51. A new mall with 80 stores open up in Chesapeake. Which of the following situations is most likely to occur. The unemployment rate will go down and spending will go up The unemployment rate will go up and spending will go down The unemployment rate will go down and spending will go down The unemployment rate will go up and spending will go down
52. The unemployment rate will go down and spending will go up
53. All of the following are basic economic questions all societies must answer EXCEPT….. What will be produced? What will be the profit margin? Who will produce it? For whom will it be produced?
54. What will be the profit margin?
55. What economic role is illustrated when someone buys a gallon of milk? Consumer Entrepreneur Investor Producer
56. Consumer
57. The United States government regulates business by A. Controlling and owning natural resources B. Ensuring competition C. Allowing monopolies D. All of the above
58. Ensuring competition
59. One important reason that Virginia and the United States trade with other nations is to: A. sell goods outlawed by U.S. consumer laws B. buy goods and services at a lower opportunity cost C. decrease the number of jobs D. control the worldwide cost of a good
60. buy goods and services at a lower opportunity cost
61. One important influence of new technology in the workplace is the A. increase of the cost of production B. the reduction of the flow of capital C. decrease of supply and demand D. the creation of new jobs
62. the creation of new jobs
63. To protect consumers, federal agencies A. Write contracts for consumers. B. Establish guidelines for public health and safety. C. Ask the Supreme Court to research businesses. D. Approve all consumer contracts before they take effect.
64. Establish guidelines for public health and safety.
65. The right of private property is protected by The First Amendment. The Federal Reserve System. Government securities. Negotiated contracts.
66. If business or individuals violate consumer rights, Consumers may take legal action Businesses may take legal action Consumers can take matters into their own hands Consumers do not have any rights of protection