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slap-up is A ) tools, equipment, and concomitantories utilize in the take of goods and work wiz of four factors of yieldion. frugals is the procedure of what to create and distri gravelye goods and work? adapt D ) resources Want is withdraw up B ) track of expressing a need that leads to a gustation for somewhat goods oer other(a)s The fundamental scotch enigma is amelio direct B ) scar city. why do economists need to find the resolving to t protrude ensemble three of these questions? reverse D ) there atomic number 18 non replete resources to satisfy assures seemingly unlimited wants Markets where cultivable resources be bought and sold atomic number 18 ______ marts. v timecious A ) factor The key feature of the circular f baseborn of scotch act is the invent C ) merchandise. sparings is based on em block up B ) scarcity. allows the tools, equipment, machinery, and factories apply in the yield of goods and services. line up B ) Capital Tw enty percentageage of the grounds the great unwashed in the wealthiest nations consume ____ percent of the worlds goods and services. align A ) 86 In this overtaking, Too some(prenominal) merchandiseplaceing today focuses on sentiency rather than reasons to buy. In the old days, aw beness advertising was to a greater extent(prenominal) effective. on that point was less(prenominal) competition. completely told you had to worry round was whether or not people remembered your product. As engine room and to a greater extent(prenominal) than(prenominal) kinds of media gift come nearly, its no chronic ample to be remembered. The consumer has too creationy an(prenominal) choices. Your marketing has to send the message that you be relevant. You need to be sending reasons to buy. Advertisers be advised to focus on the stinting cin one casept of subdue C ) good Manufactured goods involve to snuff it discover other goods and services argon c only ifed sink B ) capital goods. The sawbuck sign app promote of altogether(prenominal) final goods and services and the ost comprehensive beatnik of a estates get production return is temper D ) Gross home(a) Product (gross domestic product). The three sanctioned scotch questions every one essential(prenominal) answer ar ad vertical C ) WHAT to get under ones skin, HOW to produce, FOR WHOM to produce. Human capital is congeal B ) the sum of the skills, abilities, health, and motivation of people. fit to Alice Rivlin in this portrayal scotch literacy is uniform having a functional association of a foreign language. If you ar with a convention of foreigners and dont speak their language at every last(predicate), you witness excluded.If you fox a rudimentary functional pick outledge of the language, you crowd out at l einsteinium(prenominal) fol base the drift of the conversation, ask a few questions and feel that, even if you argon not getting the fine points, y ou ar not integr entirelyy left out and you ready a basis for getting much knowledge. That, it seems to me, is what scotch literacy means-a rudimentary working knowledge of the concepts and language of sparing action. If you wealthy person a rudimentary working knowledge of sparing concepts, you exclusivelyow be reform B ) able to ask questions to recognize more knowledge. Factors of production is/ ar sepa layB ) prolific resources that go up the four categories of land, capital, labor, and entrepreneurship. on that point Is No Such Thing As A Free Lunch re encephalons us that reform A ) resources argon extraordinary and that we must top parcel outful sparing decisions regarding WHAT, HOW, and FOR WHOM to produce. In this passing, To take an recitation, champion man draws out the wire, another(prenominal) straightens it, a three cuts it, a fourth points it and the do of a pin is, in this manner, divided into well-nigh eighteen distinct operations. Adam m etalworker is describing the basic scotch concept of tameC ) variant of labor. The situation in which some necessities turn in footling value while some non-necessities bring on a much(prenominal) high value is cognize as remediate A ) paradox of value. The up-to-dateness apply to buy the tools and equipment needed for production is cognise as pass up C ) pecuniary capital. In which figure of scrimping do consumers and privately owned dividing linees make the volume of the WHAT, HOW, and FOR WHOM decisions?. account strength-hand(a) B ) free go-ahead Division of labor is a peculiarity of comp enhance B ) assembly line production. The free market thrift has demonstrable a strong correspondB ) ashes of jargons. In contemporary economies, the medium of ex budge is decry B ) capital. Which of the sp atomic number 18-time drill lists the four factors of production? congeal D ) land, labor, capital, entrepreneurs Actions in one part of the country or world that mystify an stinting impact on what happens elsewhere be pil sm on the wholecases of compensate D ) sparing interdependence. Uneven distribution of inunct reserves around the world is an example of scarcity of elucidate C ) geography. cardinal receipts of a ___________ sparing is that it pocket-sized by little ad sightlys to change over duration. dress A ) market A traditional parsimony is an purifyB ) delivery in which the tout ensembleocation of resources and virtu altogethery each(prenominal) other sparing activity from ritual or habit. The high grade of freedom in a market constitution is ornamentd by the fact that chasten A ) producers good deal make some(prenominal) they think testament sell. To arrive at an economic decision, a decision- fashioning grid may be used to evaluate align C ) utility(a) choices of follow out. Who makes economic decisions in a command saving? illuminate C ) the governing body An example of a market pa rsimony is condition C ) the join States Economics is the use of what to produce and distribute goods and services? compensate D ) resourcesIn the bell- usefulness compendium take ind in this passage Re await has grand demonst stationd the readingal value of early intervention for the Statess at-risk children, but a pertly study overly shows the subject souricial com adorner programmes be a overbold man investiture. who are the investors A cost-benefit analysis of the nationally funded Chicago Child-Parent Center program, which serves children from low-income families in Chicagos inner city shows that an median(a) yearly cost of $6,730 per child generated a total return to society at round of $47,759 per participant. Who benefited from the savings? emend C ) all of societyA popular model used to illustrate the concept of opport building blocky cost is determine A ) the production possibilities enclosure. Which of the chase trounce distinguishs the r elationship amid job-offs and opportunity be? straighten out A ) Opportunity be are incurred when trade-offs are made. The study of economics is main(prenominal) because it enables us to fructify C ) become better decision makers. The nearly important function of a distribution system is to link _____. remediate C ) producers and consumers Which term refers to the idea that if you have more of one thing, you must have less of another? conciliateB ) opportunity cost What type of economic system does this passage So dogged as mankind lived by raising crops and herding animals, there was not much need for measuring pocket-size units of time. The seasons were all important-to know when to expect the rain, the snow, the sun, the cold. Why trouble oneself with hours and minutes? Daylight was the only important time, the only time when men could work. describe? put A ) traditional economy The purpose of political relation in a command economy is to coiffure C ) make major economic decisions. A market economy fructify A ) does not pass on for everyones basic needs.Opportunity cost is the turn down D ) cost of the close outmatch alternative use of bills, time, or resources when one choice is made rather than another. An economy at its production possibilities frontier is operational amend B ) at full potential. The term archetype of biography refers to remediate A ) character of carriage in a country. Bar graphs straighten out A ) shows relationships surrounded by different entropy series is the bar graph. Here the height of the bar represents the nebd value or frequency The higher(prenominal) or continuing the bar, the greater the value. The main draw covering of the traditional economy is that it set A ) slopes to discourage new ideas and miens of doing things. In the economic system draw in this passage Diaguita Indians have lived in this region for generations We grow beans, corn and potatoes on the mountain slopes. To irrig ate these crops, we still use the channels built centuries ago by our ancestors. We also breed llamas. In our community, the more llamas you own, the richer you are . answers to the basic economic questions would be determined by aline A ) habit and custom. all in all of the undermentioned are characteristics of a command economy debar worsen B ) exoteric services are addressable at little or no cost. In a ____________ economy, a cardinal originatority makes most of the WHAT, HOW, and FOR WHOM decisions. redress B ) command What do we call a way of thinking that compares the cost of an action to its benefits? mitigate A ) cost-benefit analysis What is the angiotensin converting enzyme largest source of revenue for the federal regime? even off C ) individual income revenue enhancementes The benefit article of belief of levyation secernates that adept-hand(a) D ) people who benefit from governing goods and services should salary measurees fit in to the benefit they receiveFICA includes levyes to pay for conform A ) kindly warranter and Medicare. Personal individual income evaluate is a _____________ appraise. rectify B ) regressive An riddance or oversight in the measure law that allows some people and wrinklees to bend paying valuees is called a decry C ) tax loophole The three criteria for effective taxes are even off D ) equity, simplicity, and efficiency A ________ tax paid by corporations on their income. set D ) corporate income tax This passage Well cut your taxes is the most tell campaign promise in the taradiddle of Ameri support political science.Yet somehow it is still considered visionary, worth a fight. Worth, indeed, a crusade. Why? Its in our blood. Historically, Ameri stinkers have hated taxes, and not exclusively because we had to pay them. Weve hated taxes because weve perceived them to be an infringement on our liberty-and the source of abundant, powerful, and terrible administration. This was s traightforward from the beginning. It wasnt just gross(a) without deputation that some(prenominal)ered us so much. It was taxation. Period. compares the feelings of Ameri chiffoniers toward taxation today to those same feelings around the time of the align C ) American Revolution.The relative incidence of a tax can more effectively be shifted from the supplier to the consumer if typeset A ) the fill contract is inelastic. The superpower-to-pay principle of taxation states that rectify C ) people should be taxed fit to their ability to pay. Iowa residents can take solace in lettered that theyll the likely help the state with its figure press if President Bush cuts federal taxes. Iowas softening economy has left state government revenue stagnant, a problem caused by a lack of outlay by Iowans. Sales-tax receipts have notwithstanding bumped up from last year, and its coming back to hit the state seem.In Iowa, residents get to educe their federal income taxes from their state income taxes. So if the federal government saves Iowans $1 billion in income a tax, thats $1 billion that the state lead get to tax. jibe to the passage, how will a cut in federal income taxes help the Iowa state budget crunch? crystallise A ) The state can tax more of residents income. Intergovernmental revenues are chiefly in extended for make up A ) education and public welfare. agree to the passage America can celebrate Tax liberty Day on May 3, 2001, according to the Tax Foundations annual calculation.That means that the nations taxpayers have to work from January 1, 2001, to the 123rd day of the year before earning enough cash to pay for government-federal, state, and local-and bulk expense currency on themselves. one-on-one income taxes represent the largest component of Americans tax bills. what is the subject matter of Tax Freedom Day? meliorate D ) By that day, you have legitimateisticise enough to pay your income taxes for the year. The auth ority to levy a federal income tax comes from determine B ) the Sixteenth Amendment. An excise tax is a wane B ) tax on the manufacture and sale of selected items. The incidence of a tax reform B ) refers to those who bear the final burden of taxation. A _____________ tax is tax on concrete and intangible possessions, such as substantial estate, buildings, furniture, carrys, bonds, and bank accounts. countersink B ) dimension The three largest sources of revenue for local governments are refuse A ) utility and spirits gunstock income, property tax, and intergovernmental revenues. FICA is square up D ) tax levied on employers and employees to advocate sociable shelter and Medicare According to the passage rump in 1940, when the sociable tribute program was just getting downstairs way, average bearing foreboding was less than 64 eld.The programs designers expected that most people would play to the program most of their lives and die before collecting a dime in reti rement benefits. Today, average flavor expectancy in the fall in States is more than 75 geezerhood. As life expectancy has soared, birth range have go underd, leaving fewer and fewer workers to support the ballooning number of retirees. In 1950, the system was solidly supported with 16 workers paying for for each one retiree today, there are just over three workers per beneficiary. The extend in average life expectancy has created a problem for the Social surety system because do B ) more people are collecting retirement benefits. The both(prenominal) abundant categories of government consumption are Correct B ) the purchase of goods and services and compensations to discriminate groups. Although direct mail and special events are typical fundraising methods, one senator who was challenging an officeholder got the most bills from his own personal phone calls to donors. Correct A ) straight Transfer payments from the government to individuals or other directs of gov ernment might be used for all of the following excerpt Correct C ) maintenance of the armed forces. A Value-added tax is CorrectA ) tax placed on the value that manufacturers add at the end of production. found on this passage all year at this time, sexual intercourse discovers, with a great public show of commence and indignation, the existence of the American tax autograph and the agency that administers it, the Internal Revenue Service. There are high-minded calls for abolishing the authorized tax system and replacing it. Around April 15, carnal knowledge likes to pretend that the tax code just sort of appeared or just happened. exactly the Constitution puts the burden of taxes solely, exclusively and alone on Congress shoulders.The tax code is the way it is because a majority of Congress wants it that way. Members of Congress probably like to pretend that the tax code just sort of appeared because they Correct B ) dont want voters to associate them with taxes. vacant and creative pursuits are called Correct D ) culture The Taxpayer Relief Act of 1997 Correct D ) did little to benefit people without children or capital gains. Overall, who benefited most from tax reform in 1997? Correct C ) the authorise 20 percent of wage and income earners __________ is the part of the economy made up of federal, state, and local governments. CorrectB ) Public sector The un breakal tax Correct D ) simplifies the tax help. A value-added tax ( vat) is Correct B ) tax on the value added at every stage of the production process The alternative minimum tax Correct B ) requires people to pay a minimum tax of 20 percent. The VAT is a ______ tax. Correct D ) federal All of the following are make of increased government consumption eject Correct D ) a pass in competition amid the public and private sectors. The flat tax Correct C ) departs from ability-to-pay principle of taxation. All directs of government feature consume about Correct B ) one-third of the na tions output.All of the following EXCEPT one are advantages to a value-added tax. Correct B ) it is invisible to consumers All of the following are effects of the federal debt EXCEPT Correct D ) pastime rates are lowered. An example of mandatory consumption is financing for Correct A ) stakes payments on the federal debt. The pay-as-you-go provision is Correct D ) requirement that new strike downing proposals or tax cuts must be offshoot by reductions elsewhere. Who pays for the maintenance on the state highway linking Tyler, Texas, with Corsicana, Texas? Correct C ) Texas The sequence for the approval of the federal budget is CorrectB ) chairperson to Congress back to president. Based on the facts given in the passage One result of the flowing Social Security debate has been to concentrate the publics mind on the true economic condition of the elderly. While the top 20% of olders are proportionally fuddled? to the highest degree all of the rest are highly dependent on So cial Security. The program provided at least half of the total income of more than 55% of superior citizens and at least 75% of the total income of more than a third. Social Security lifted 11. 4 meg seniors-or to the highest degree half of the 65-and-older cosmos-out of poverty, bare the elderlys poverty rate from 47. % to 11. 9%. , most how many Americans are age 65 or older? Correct C ) slightly under 22. 8 zillion Of the four categories listed below, which accounts for the largest arrive of local expenditures? Correct B ) public utilities Which of the following statements stovepipe describes the relationship of the federal shortage to the federal debt? Correct B ) The federal deficit leads to borrowing, which adds to the federal debt. According to the passage One result of the current Social Security debate has been to concentrate the publics mind on the true economic condition of the elderly.While the top 20% of seniors are relatively affluent? almost all of the res t are highly dependent on Social Security. The program provided at least half of the total income of more than 55% of senior citizens and at least 75% of the total income of more than a third. Social Security lifted 11. 4 million seniors-or more or less half of the 65-and-older people-out of poverty, corking the elderlys poverty rate from 47. 6% to 11. 9%. , about what character of the elderly would be living in poverty if the Social Security system did not exist? Correct A ) 47. 6% The linked States government put in huge deficits during the 1980s due toCorrect C ) a doubling of expending on national defense. All of the following are differences between the federal debt and private debt EXCEPT Correct C ) the federal debt is the total descend of bullion borrowed from investors. Interest on debt is Correct D ) be incurred by both state and local governments for borrowing notes Which of the following is NOT an example of a local government? Correct C ) neighborhood associa tions The federal debt is Correct D ) make sense borrowed to pay deficit spending budget with neither a supernumerary or deficit Which of the following is an example of an entitlement payment?Correct B ) federal notes given to a senior citizen as a Social Security payment All of the following are local positives with approval power for spending EXCEPT Correct D ) the tax assessor. Which of the following statements best describes the relationship of the federal deficit to the federal debt? Correct B ) The federal deficit leads to borrowing, which adds to the federal debt. From the choices below, pose when the federal government began significant deficit spending. Correct C ) 1980s Of the four categories listed below, which accounts for the largest amount of state expenditures?Correct D ) higher education Who formulates the federal budget? Correct C ) the president Of the four categories listed below, which accounts for the largest amount of local expenditures? Correct B ) publi c utilities Based on the passage The Aztec in Central America used cacao beans, from which chocolate is made, as money. Prices varied from a few beans for a piece of developing to several(prenominal) thousand for an enslaved person. Aztec merchants had to take care when selling expensive items. Payment ordinarily came stored in sacks, and the sacks might contain work money-bean husks filled with mud. What type of money did the Aztec use? Correct D ) commodity money Which of the following statements about a gold exemplar is FALSE? Correct C ) It is easier to explode the money supplement. The fall in States government ended the gold received in Correct B ) 1934. Based on the passage To get its new Sacajawea dollar into circulation, the U. S. Mint has issued more than viosterol million of the golden falls since the end of January, not only to banks, but also to Wal-Mart and Sams club stores. but in what may be the greatest assume trick ever, the dollars have all but vani shed.People are making them into jewelry, auctioning them off on eBay, and leaving them under pillows on behalf of the tooth fairy-anything but spending them. The Mint expects Sacajawea to be back in circulation by year-end, when more than a billion of the dollars will have been minted and the novelty, it hopes, will have worn off. Sacajawea dollars have disappeared because many people retrieve they are Correct A ) worth more as a commodity than as currency. According to the passage After the conk out of the Soviet Union in 1990, Russian currency was not trusted. Real money played a fairly small part in Russias economy.Most ancestry was conducted by barter or with IOUs. For example, workers rarely trustworthy wages in the form of cash. A bi calendar method of birth control factory outside the city of Perm paid its workers in bicycles To get cash, the workers had to sell their paychecks much often than not, they simply traded the bicycles for the products they want. most busi ness in Russia, at that time, was conducted without currency because Russian currency was not Correct A ) accepted. Greenbacks and United States notes were issued to Correct A ) raise money to finance the Civil struggle. The value of fiat money is Correct D ) faith in the government.These passages in the United States Constitution oblige 1, particle 8 The Congress shall have the power To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures To provide for the punishment of counterfeiting the securities and current coin of the United States To make all laws which shall be obligatory and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officeholder thereof and in Article 1, Section 10 No State shall coin money emit bills of credit make anything but gold and silver coin a tender in payment of debts. made which of the following statements true at that time? Correct C ) The government could not print newspaper money.Which of the following statements about a gold standard is FALSE? Correct C ) It is easier to expand the money supply. The problem with Continental dollars was that Correct A ) so much was printed they became nearly worthless. Money that has an alternative use as an economic good is Correct A ) commodity money. Money functions as all of the following EXCEPT Correct D ) a measure of value. One injury of using gold as a standard for money is Correct D ) paper currency holders could exchange it for gold. What is the agate line of the American dollar? Correct B ) the Spanish peso and shillings Money by government decree has no alternative value or use as a commodity is called Correct C ) fiat moneyFiat currency is also known as ________. (hint look at the paper money in your possession. ) Correct A ) legal tender The part of modern money that we can touch consists of Correct B ) feederal second-stringer Notes. local anaesthetic banks in the 1800s that printed too much money were called Correct A ) wildcat banks. ________ is/are the financial standard under which the basic currency unit is equivalent to, and can be exchanged for, a particular amount of gold Correct D ) Gold standard To make a difference with the Spanish peso, Benjamin Franklin and black lovage Hamilton divided the dollar into Correct B ) tenths (10 equal pieces). Most simple eye lists in the United States are traded on theCorrect B ) over-the-counter(prenominal) market. In what city was Americas first furrow exchange located? Correct B ) Philadelphia To determine Gross National Product, Correct C ) add to gross domestic product all payments received by Americans outside the U. S. and start out payments made to foreign-owned resources in the U. S. In 2001, the national debt was $5. 1 trillion dollars. When President Obama was inaugurated in January of 2009, the national debt was $ 10. 6 trillion. Sixteen months after the national debt is Correct A ) $13. 1 trillion dollars. In the Gross interior(prenominal) Product defense spending is in which sector? Correct B ) governmenGross internal Product is CorrectD ) dollar amount of all final goods and services produced within a countrys borders in a year. Which is the best measure of the nations income? Correct B ) GNP Which stock exchange the largest electronic screen-based equity securities commerce market in the United States. Correct D ) NASDAQ A bull market is a Correct C ) flow during which stock market determines bear on up for several months or geezerhood in a row. The Efficient Market opening argues that Correct A ) stocks are endlessly wrongd about right and bargains are hard to find. A bear market is a Correct A ) period during which stock market bells move down for several months or old age in a row.The great majority of stocks in the United States are traded on Correct C ) the over-the-count er market. The Efficient Market supposal argues that Correct A ) stocks are ever wrongd about right. According to the United States Treasury, the US national debt is the Correct A ) confidential information amount owed by the US to its lenders, for example, chinaware and Japan A stock motion that is made immediately at the market equipment casualty is made in the Correct B ) spot market. The largest sector of the macroeconomy is the Correct D ) consumer sector. The Dow Jones Industrial Average (DJIA) represent what market value of all U. S. stocks on the New York Stock Exchange Correct A ) fifth (20%)Which of the following is the most important aggregate of how a country is doing economically? Correct C ) gross national produce Investors who sign a contract guaranteeing them the option of selling shares of stock at a specified outlay in the future have agree to a Correct D ) put option. In the model GDP = C + I + G + F, the F represents the Correct B ) difference between th e dollar value of goods sent abroad and goods purchased from abroad. Since colonial multiplication, the average size of a rest home in the United States has Correct B ) decreased. Which best describes the movement of the center of population of the United States? Correct C ) east to westBy April 2000, the population of the United States stood at about 281. 4 million people. This years anticipated number will be _____ million people. Correct D ) 309 The official count of all people in the United States is called Correct D ) the decennial census. A price mogul is a ______________. Correct C ) a statistical series that can be used to measure changes in prices over time Real GDP is Correct D ) GDP adjusted to crawfish the distortion of pretension. Life expectancy is the Correct A ) average remaining life span in years for persons who create a given age. Since colonial times, the rate of suppuration of the United States population has Correct B ) steadily decreased.What is the im plicit GDP price deflator? Correct A ) a price king that measures price changes in GDP All of the following factors stir population offset EXCEPT Correct A ) demographers. All of the following statements about authentic GDP are true EXCEPT Correct C ) real GDP is the same as current GDP. Which of the following is the correct way to calculate real GDP? Correct B ) Divide current GDP by the implicit GDP price deflator and then(prenominal) multiply by 100. The United States wooly-minded 600,000 soldiers during World War II and another 37,00 in the Korean War. In the years from 1946 until 1964 there were 76 million babies born. This era has been named the Correct B ) baby boom.The official count of all people in the United States is called Correct D ) the decennial census. Economists know it is important to track lump because it Correct B ) distorts statistics about overall economic performThe mean center of United States population (using the centroid definition) has been calcul ated for each U. S. Census since 1790. presently this point is located in Correct D ) Missouri. All of the following factors require population growth EXCEPT Correct A ) demographers. To construct a price indicator, all of the following are needed EXCEPT Correct B ) the current splashiness rate. Business cycles are Correct A ) nonsystematic upturns and downturns of real GDP.Real GDP per capita is the like measure of economic growth over the long run because Correct B ) prices and the population change over time. This pronounced the beginning of the big falling off in 1929 Correct D ) stock market crash The United States experienced almost no growth in real GDP per capita Correct A ) between 1929 and 1939. Which of the following factors act economic growth? Correct D ) all of the to a higher place Which of the following statements about economic growth is FALSE? Correct C ) Economic growth decreases the tax base. Increasing productivity results in Correct A ) change magnit ude economic growth. An econometric model is a CorrectD ) macroeconomic model that uses algebraic equations to describe how the economy behaves. A number of factors are important to economic growth-especially the quantity and quality of the Correct C ) factors of production (A)(An) ___________ is a monthly statistical series that anticipates changes to the real GDP. Correct D ) index of stellar(a) indicators The United States experienced almost no growth in real GDP per capita Correct A ) between 1929 and 1939. A period during which real GDP declines for two quarters in a row, or six consecutive months, is call a(n) ___________. It begins when the economy reaches a peak, and ends when the economy reaches a trough. Correct A ) recession The passage A key gauge of future U. S. conomic activity declined 0. 5% last month, as the Sept. 11 terrorist attacks in New York and Washington shortened an already troubled economy. The Conference placard said Monday its index of leading economic indicators hide to 109. 2 in September, the largest one-month decline since January 1996. The index indicates where the overall U. S. economy is headed in the next three to six months. The economy had been struggling for several months before the Sept. 11 attacks. Many economists have said they believe that a recession is unavoidable with the new uncertainties raised by the disaster. discusses a business fluctuation influenced by Correct D ) external shock.The _____ is a composite index of 11 economic series that move up and down in parent of changes in the overall economy statistical series used to predict business cycle turning points. Correct C ) econometric model Your ________ is the quality of life based on the possession of necessities and luxuries that make life easier. Correct B ) standard of living Increasing productivity results in Correct A ) increasing economic growth. The business cycle since World War II has been characterized by Correct A ) extended expansions alt ernating with brief recessions. Changes in ____________ expenditures are one cause of business cycles. Correct D ) capital A major feature of a __________ is its ability to increase real per capita output enough to allow people to raise their standard of living.This system also increases peoples free time, allowing them to chip in more attention to families, hobbies, and recreational activities. Correct C ) free enterprise economy When productivity grows, people produce relatively ______ with the same amount of inputs, and the prices of goods and services tend to stay _______. Correct D ) more, low The change in price level is the _______. Correct B ) an increase in the general price level Prices tend to _______ during expansions and then ________ during recessions. Correct A ) rise faster, slow down To measure the price level, economists select a market wicket of goods and then construct a price index such as the Correct B ) consumer price index, producer price index, or implicit GDP.Because there are always some workers who are in the process of changing jobs, there will always be some ____________ un art in the economy. Correct D ) frictional According to the passage The nations un custom rate rose to 4. 5 percent in June as manufacturers proceed to suffer heavy job losings and demand for workers in service industries fell to the lowest level in 10 months. The Labor Department reported Friday that the baseless rate rose 0. 1 per centum point from a 4. 4 percent rate in May. The 4. 5 percent level matched the unemployment rate in April with both months representing the highest level the jobless rate has reached in the year-long economic slowdown. what was the highest level that unemployment reached that year? Correct D ) 4. % All of the following are theories regarding the cause of inflation EXCEPT Correct C ) cost-pull. Unemployment that occurs when a fundamental change in the operations of the economy reduces the demand for workers and their skills i s called ___________ unemployment. Correct A ) technological The ________ curve is a curve that shows how much the existing distribution of income varies from an equal distribution. Correct B ) Lorenz At the peak of the Great Depression 1 out of ____ were unemployed. Correct A ) 4 A relatively low rate of inflation, usually 1 to 3 percent annually is Correct A ) creeping inflation A well-situated economy. Record-low unemployment.A blizzard of pink slips a note stating that a person has been fired. Whats wrong with this picture? The fact is, even in the best of times hundreds of thousands of people lose their jobs through no fault of their own. You might not get any advance warning, so dont be caught off guard. Have an street smart resume and networking system. You want to be able to launch your job search soon after you get the corked news. What type of unemployment does this passage describe? Correct D ) frictional The unemployment rate understates employment conditions for all of the following reasons EXCEPT Correct A ) some workers are between jobs for one reason or another. Galloping inflation is CorrectB ) intense form of inflation that can go as high as 100 to 300 percent The passage For all the recent talk of cutting taxes, Congress rarely cuts them when the economy is growth robustly, as it is now, and unemployment is low. The worry among economists is that the extra money in peoples pockets may make an already strong economy too strong, last stoking inflation after a long period of relatively stable prices. describes locomote inflation as a realizable result of Correct B ) a booming economy. According to the demand-pull theory, inflation is caused by Correct D ) consumers. Full employment is reached when the employment rate drops below _____ percent. Correct B ) 4. 5 Changes in technology and changes in consumer tastes can cause Correct B ) structural unemployment.According to the demand-pull theory, inflation is caused by Correct D ) all of t he above. Unemployment that is straight off related to swings in the business cycle is Correct C ) cyclical unemployment According to the passage The commit of capital of The Netherlands was completed in Holland in 1609. At that time, Amsterdam was a center of world trade. More than 340 different kinds of silver coins and about 500 types of gold coins circulated throughout the city. Dutch merchants had little idea how much these coins were worth, so the Bank of Amsterdam was set up under a charter from the city to standardize the currency. The Bank of Amsterdam operated as Hollands central bank for more than 200 years.After making a series of mediocre loans, however, it failed and went out of business in 1819-almost 100 years before Americas central bank was founded. why did the Bank of Amsterdam stop operating? Correct C ) It made bad loans. actions by the provideeral unobtrusiveness strategy to expand or contract the money supply in order to act the cost and availability of credit Correct D ) fiscal insurance insurance policy A portion of the deposits in the form of coins and currency that banks and other depository institutions are requisite to hold are called ________ reserves. Correct D ) legal The quantity theory of money holds that excessive increases in the monetary supply Correct C ) lead to inflation. provideeral Reserve Chairman Alan Greenspan decided seven years ago to publicize the central banks fire-rate moves once they were made. Now, each meeting of the Fed-whether the central bank changes rates or not-triggers a let out of instant analysis of what it means for the economy and the financial markets. Which function of the Federal Reserve is the subject of this passage? Correct C ) regulating the money supply The Fed remains largely independent from politics for all of the following reasons EXCEPT Correct D ) the president and Congress buck new members to vacant seats on the Board of Governors. he dilemma set about by the Fed wh en considering monetary policy is the choice between Correct A ) inflation and interest rates.Based on this mention Not too many years ago, Federal Reserve officials conducted monetary policy as if they were members of the Politburo plotting behind the thick walls of the Kremlin. the author believed that the Federal Reserve had been too Correct D ) secretive. When command economies make the enactment to capitalism, they face all of the following challenges notwithstanding Correct A ) the Gosplan. Correct B ) debts and obligations. The Fed has defined different categories of money, M1 and M2, according to the moneys Correct B ) function. Repeated short-term attempts to keep interest rates low result in a _________ of the money supply, making inflation _________. Correct A ) long-term expansion, worse e ply has defined M2 as Correct A ) represents the components of the money supply that most close conform to moneys role as a. store of value. Which letter designations mark Fed act ions that will expand the money supply? Correct B ) Lower reserve requirement, demoralise bonds, Lower synthesis rate. The ___________ is the interest the Fed charges on loans to financial institutions. Correct D ) discount rate Assets are Correct A ) properties, possessions, and claims on others. n the long run, changes in the supply of money affect the ____________. Correct C ) general level of prices Which letter designations mark Fed actions that will contract the money supply? CorrectC ) ascent reserve requirement, Sell bonds, Raise discount rate For a bank to be profitable, how much of a spread must it maintain between the rate it charges on loans and the rate it pays for borrowed funds? Correct B ) 2-3 percent A balance opinion poll shows all of the following EXCEPT Correct A ) bank assets on the right of the T account. All of the following are tools of monetary policy EXCEPT Correct C ) tight money controls. The dilemma faced by the Fed when considering monetary policy is the choice between Correct A ) inflation and interest rates. The price of credit is the ______. Correct A ) rate of interest At times the Fed monetizes the debt in order to CorrectB ) keep interest rates from rising. In the short run, monetary policy affects Correct C ) interest rates and available credit. The loving cost of economic asymmetry include all of the following EXCEPT Correct A ) stagflation. Those who favor supply-side policies would tend to support the government playing Correct B ) a reduced role in the economy. Monetarism is set forth as Correct D ) ferocity on the role of money and its growth as a key to positive inflation and unemployment. Deregulation is most nigh associated with Correct D ) supply-side economics. Economic instability wastes all of the following EXCEPT Correct C ) tax revenues.According to John Maynard Keyness theory of the multiplier-accelerator effect, a decline in investment spending will Correct B ) lead to a downward whorl of the econo my. ____________ policies are federal policies designed to increase or decrease total demand in the economy by duty period the aggregate demand curve to the right or to the left. Correct D ) Demand-side core demand will increase Correct D ) if consumers save less and spend more. Unlike demand-side economics, supply-side economics Correct A ) advocates reduced government involvement in business. The unofficial statistic that is the sum of monthly inflation and the unemployment rate same as annoying index is Correct B ) affliction indexAccording to Keynesian economics, only the _________ sector is big enough to step in and offset changes in investment sector spending. Correct B ) consumer The ____________ is the sum of the monthly inflation and unemployment rates. Correct A ) misery index Which is an example of the uncertainty caused by economic instability? Correct B ) A consumer delays a purchase. Social costs are Correct D ) price of economic instability in human terms. The ___ __________ like unemployment insurance and Social Security encourage consumers and the economy in general if economic conditions worsen. Correct A ) automatic stabilizers Which of the following statements is FALSE? Correct B ) Economic instability is at the root of all social problems. John Maynard Keynes CorrectD ) introduced his theories in 1936. The social costs of economic instability include all of the following EXCEPT Correct A ) stagflation. Economists measure the cost of economic instability with Correct D ) both a and b Wage price controls are Correct B ) regulations making it illegal for businesses to give workers raises or to raise prices without the explicit permission of the government. Stagflation is ________. Correct B ) period of stagnant growth feature with inflation The use of government spending and taxing to influence economic activity is called _ Correct B ) fiscal A period of stagnant growth combined with inflation is known as ____________. CorrectB ) stagnan cy The basis for international trade stems from Correct B ) the differences in production costs from one country to another. The Council of Economic Advisers Correct C ) advises the president on economic developments and strategy. The three-member group that reports on economic developments and pictures strategies to the president is called the Correct A ) Council of Economic Advisers. Which is the best description of the role of the Council of Economic Advisers? Correct A ) report economic developments and propose strategies The nations monetary policy Correct A ) often comes under attack from politicians. The United States imports CorrectC ) billions of dollars in products each year. Which of the following is demonstration that international trade is beneficial? Correct C ) the fact that free nations make out to trade vThe three-member group that reports on economic developments to the president is called the Correct B ) Council of Economic Advisers. A country has a(n) ________ ___ whenever it is able to produce more of a given product than another. Correct A ) living advantage ____________ economic policies grew out of the unemployment and other problems that occurred during the Great Depression of the 1930s. Correct D ) Demand-side All of the following describe economists EXCEPT CorrectB ) economists are sharply divided into competing schools of thought with little overlap of ideas and beliefs. If a country wants to trade a product with another country, it must have a(n) ___________ in the production of that product. Correct D ) comparative advantage important can produce either 10 apples or 3 oranges. beta can produce either 12 apples or 3 oranges. Correct C ) Beta has an absolute advantage in the production of apples. Imports are Correct B ) goods and services that one country buys from other countries. The ability of a country to produce a product with greater output per unit of input is Correct A ) absolute advantage. . A country has a comparative advantage when it can