Unit 5

1. Unit 5 Economics EOC Review

2. Question 1 A recession is • (a) a period of steady economic growth. • (b) a prolonged economic expansion. • (c) an especially long or severe economic contraction. • (d) a prolonged economic contraction.

3. Question 1 A recession is • (a) a period of steady economic growth. • (b) a prolonged economic expansion. • (c) an especially long or severe economic contraction. • (d) a prolonged economic contraction.

4. Question 2 When the economy is working properly, what is the unemployment rate? • A. 0 to 3 percent • B. 8 to 10 percent • C. 4 to 6 percent • D. 10 to 12 percent

5. Question 2 When the economy is working properly, what is the unemployment rate? • A. 0 to 3 percent • B. 8 to 10 percent • C. 4 to 6 percent • D. 10 to 12 percent

6. Question 3 Which of the following is an example of a final good or service? • A. Wheat a bakery purchases to make bread • B. Coffee beans a coffee shop purchases to make coffee • C. Lumber purchased by a construction company to use in building houses • D. A cake purchased from a bakery for a wedding

7. Question 3 Which of the following is an example of a final good or service? • A. Wheat a bakery purchases to make bread • B. Coffee beans a coffee shop purchases to make coffee • C. Lumber purchased by a construction company to use in building houses • D. A cake purchased from a bakery for a wedding

8. Question 4 Which is an example of discretionary spending? • A. Social Security • B. Medicaid • C. Medicare • D. Education

9. Question 4 Which is an example of discretionary spending? • A. Social Security • B. Medicaid • C. Medicare • D. Education

10. Question 5 • What do taxes collected under the Federal Insurance Contribution Act (FICA) fund? • A. Social Security and Medicaid • B. Social Security and Medicare • C. Medicare and Medicaid • D. Medicaid and Supplemental Security Income

11. Question 5 • What do taxes collected under the Federal Insurance Contribution Act (FICA) fund? • A. Social Security and Medicaid • B. Social Security and Medicare • C. Medicare and Medicaid • D. Medicaid and Supplemental Security Income

12. Question 6 An example of a durable good would be • A. a used car. • B. a box of cereal. • C. a paperback book. • D. a pack of baseball cards.

13. Question 6 An example of a durable good would be • A. a used car. • B. a box of cereal. • C. a paperback book. • D. a pack of baseball cards.

14. Question 7 GDP expressed in constant, or unchanging, prices is called • A. real GDP. • B. nominal GDP. • C. price level. • D. net national product.

15. Question 7 GDP expressed in constant, or unchanging, prices is called • A. real GDP. • B. nominal GDP. • C. price level. • D. net national product.

16. Question 8 The lowest point in an economic contraction is called • A. a peak. • B. a recession. • C. a trough. • D. a depression.

17. Question 8 The lowest point in an economic contraction is called • A. a peak. • B. a recession. • C. a trough. • D. a depression.

18. Question 9 How does the Bureau of Labor Statistics determine how the market basket should change over time? • A. by evaluating the census • B. by conducting a Consumer Expenditure Survey • C. by calculating the inflation rate • D. by computing the Consumer Price Index

19. Question 9 How does the Bureau of Labor Statistics determine how the market basket should change over time? • A. by evaluating the census • B. by conducting a Consumer Expenditure Survey • C. by calculating the inflation rate • D. by computing the Consumer Price Index

20. Question 10 In a typical business cycle, what stage immediately follows a peak? • A. contraction • B. trough • C. expansion • D. growth

21. Question 10 In a typical business cycle, what stage immediately follows a peak? • A. contraction • B. trough • C. expansion • D. growth

22. Question 11 An example of a nondurable good is • A. a new car. • B. a paperback book. • C. a used car. • D. a washing machine.

23. Question 11 An example of a nondurable good is • A. a new car. • B. a paperback book. • C. a used car. • D. a washing machine.

24. Question12 • If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is • A. cyclically unemployed. • B. structurally unemployed. • C. seasonally unemployed. • D. frictionally unemployed.

25. Question12 • If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is • A. cyclically unemployed. • B. structurally unemployed. • C. seasonally unemployed. • D. frictionally unemployed.

26. Question 13 What is an entitlement? • A. a social welfare program providing benefits to people who meet certain eligibility requirements • B. a social welfare program paying bills for government spending such as supplies and utilities • C. a social welfare program spending funds over which legislators have direct control • D. a social welfare program providing payments that the government receives for certain services

27. Question 13 What is an entitlement? • A. a social welfare program providing benefits to people who meet certain eligibility requirements • B. a social welfare program paying bills for government spending such as supplies and utilities • C. a social welfare program spending funds over which legislators have direct control • D. a social welfare program providing payments that the government receives for certain services

28. Question 14 How is the federal income tax a progressive tax? • (a) The higher the income a person has, the higher the percentage that person pays as tax. • (b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less. • (c) Two married people who file their taxes together will pay more taxes than a single person will. • (d) Children pay no taxes, regardless of whether they earn a large income.

29. Question 14 How is the federal income tax a progressive tax? • (a) The higher the income a person has, the higher the percentage that person pays as tax. • (b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less. • (c) Two married people who file their taxes together will pay more taxes than a single person will. • (d) Children pay no taxes, regardless of whether they earn a large income.

30. Question 15 • What term matches the following definition? a general increase in prices

31. Question 15 • What term matches the following definition? a general increase in prices Answer: Inflation

32. Question 16 • What term matches the following definition? a tax for which the percentage of income paid in taxes remains the same for all income levels

33. Question 16 • What term matches the following definition? a tax for which the percentage of income paid in taxes remains the same for all income levels Answer: Proportional Tax

34. Question 17 • What term matches the following definition? spending on certain programs that is required by existing law

35. Question 17 • What term matches the following definition? spending on certain programs that is required by existing law Answer: Mandatory Spending

36. Question 18 • What term matches the following definition? percentage of the nation’s labor force that is not employed

37. Question 18 • What term matches the following definition? percentage of the nation’s labor force that is not employed Answer: Unemployment Rate

38. Question 19 • What term matches the following definition? taking tax payments out of an employee’s pay before he or she receives it

39. Question 19 • What term matches the following definition? taking tax payments out of an employee’s pay before he or she receives it Answer: Withholding