question
Which action would the Federal Reserve most likely take to address unemployment being at 10% and real GDP falling by .05%?
answer
lowering the discount rate
question
If policy makers are concerned about inflation, which fiscal and monetary policies would be most effective?
answer
increasing taxes and raising reserve requirement
question
What action is congress taking if they use raising or lowering taxes to encourage improvements to the economy?
answer
fiscal policy
question
What is the purpose of expansionary fiscal policy?
answer
to stimulate the economy and create jobs
question
How does Congress lowering the tax rate increase consumer spending?
answer
it gives consumers greater disposable income
question
What would be the impact of a decision by the Federal Reserve to raise the discount rate or raise the reserve requirement for banks?
answer
a tightening of money
question
Which policy would the Federal Reserve most likely adopt during a recession?
answer
easy monetary policy
question
Unemployment rate has increased from 5% to 10% and Inflation rate has fallen by 6% Which action would Congress most likely take to address the conditions on this list?
answer
Increase government spending
question
If GDP is increasing, which part of the business cycle would the economy be in?
answer
Expansion
question
Which statement describes the relationship between the consumer price index (CPI) and the business cycle?
answer
The CPI decreases during periods of contraction.
question
A country's unemployment rate increased to 9.3%. Inflation grew at an average of just 0.2%.Where is this country in the business cycle?
answer
Contraction
question
Adam Smith's policy of laissez-faire is represented in which type of economy?
answer
Market
question
This author and economist introduced the idea of communism in his book Communist Manifesto.
answer
Karl Marx
question
This economist discussed that sometimes the market does not reach full production capacity. During this time the government must step in to this problem. Which economist described this idea as fiscal policy?
answer
John Keynes
question
What does Gross Domestic Product measure?
answer
dollar value of final goods and services produced in a country annually
question
Which of the following best describes the purpose of the consumer price index?
answer
It measures inflation by organizing the price of a standard group of goods meant to represent the "market basket" of a typical urban consumer
question
Which phase of the business cycle is characterized by the highest unemployment, lowest productivity, and a small available money supply?
answer
Trough
question
Which option best matches a gross domestic product (GDP) trend with a stage in the business cycle?
answer
accelerating GDP growth - period of expansion
question
The largest expenditure in the federal government is which of the following?
answer
Social Security
question
Congress collects federal revenue in order to do which follow?
answer
To raise revenue for programs and services.
question
High taxes on cigarettes and alcohol are partly intended to do which of the following?
answer
to discourage their use.
question
Individual income tax is a progressive tax because a person with a high income ...
answer
typically pays more money in taxes than a person with a low income.
question
When a government spends more money than it makes, it has which of the following?
answer
deficit
question
Which type of tax best describes a person earning a low income but paying a high percentage in income taxes?
answer
Regressive Tax
question
Which is a true statement about state revenue in North Carolina?
answer
Sales tax is the highest revenue source for North Carolina
question
Which of the following describes the type of federal spending that does not need approval?
answer
Mandatory spending
question
Money taken out of a worker's paycheck for Social Security is an example of which of the following?
answer
A payroll tax
question
What is the highest source of revenue for the federal government?
answer
federal income tax
question
What will likely happen in a community if a major industry chooses to outsource parts of production?
answer
rise in unemployment
question
What type of policies are used when countries use tariffs, quotas, and embargoes?
answer
Protectionist
question
Which of the following is a good indication of the standard of living people have in a country?
answer
The per capita GDP.
question
What is a tariff?
answer
A tax on imported goods
question
When the value of goods a country exports is greater than the value of its imports it has a ______________.
answer
favorable balance of trade
question
Country A can produce cheese at a lower opportunity cost than Country B. Country B can produce cars at a lower opportunity cost that Country A. According to the the theory of comparative advantage, what should they produce?
answer
Country A should make cheese while Country B makes cars, and they should trade with each other.
question
What is the primary goal of the United Nations.
answer
To promote peace.
question
Globalization helps promote economic growth throughout the world. Which of the following is the best example of globalization?
answer
Many countries sign a pledge of free trade.
question
The ______________ was created to deal with the global rules of trade between nations.
answer
World Trade Organization
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