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Multiple Choice Quiz
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1.
Analysts adjust GDP for inflation:
A)in order to "inflate" the numbers to make them look better.
B)in order to provide jobs for economists.
C)in order to correct for non-market output produced within households, which inflates GDP.
D)so that the rate of change in GDP represents economic growth.
2.
When real GDP grows more rapidly than population:
A)per capita income also increases.
B)per capita income decreases because population growth is too small to support economic growth.
C)per capita income could either increase or decrease.
D)living standards decline.
3.
Most of the output of the United States:
A)represents spending by consumers.
B)represents investment by businesses.
C)represents spending by government.
D)is exported to other countries.
4.
The decline in farm population:
A)has been associated with an increase in total agricultural output.
B)has been associated with a decrease in total agricultural output.
C)is the result of farmers failing to invest in new technology.
D)reflects the higher risk of death and injury associated with farm employment.
5.
Which of the following is the most common form of business organization?
A)Proprietorships
B)Partnerships
C)Corporations
D)None of the above is true.
6.
Which of the following is the largest expenditure by the federal government?
A)Social Security benefits
B)National defense
C)Interest payments on the national debt
D)None of the above is true.
7.
Human capital:
A)consists of skills acquired through education, training and experience.
B)consists of machines produced and designed by humans.
C)consists of capital designed to alleviate human suffering.
D)does not exist. One cannot measure a human in terms of capital.
8.
In comparison to countries with similar levels of per-capita income, the United States:
A)tends to have a higher percentage of total income going to the richest 10% of the population.
B)features a variety of economic and social barriers that prevent movement up and down the ladder of income distribution.
C)tends to have a lower percentage of total income going to the richest 10% of the population.
D)has a much more equal distribution of income and very little child poverty.
9.
Compared to partnerships and proprietorships:
A)corporations are more numerous and produce more output.
B)corporations are less numerous but produce a larger percentage of total output.
C)corporations are larger but produce less output.
D)corporations tend to have larger sales but smaller amounts of total assets.
10.
A(n) _____ is a payment to individuals for which no direct service is provided.
A)tax
B)income transfer
C)investment
D)externality
11.
Real GDP is adjusted for:
A)taxes.
B)inflation.
C)population.
D)None of the above is true.
12.
Which of the following represents the largest portion of GDP?
A)Consumption
B)Investment
C)Government services
D)Net exports
13.
Which country has the largest annual output of goods and services?
A)China
B)Japan
C)Germany
D)USA
14.
Which of the following is not a type of business organization?
A)Proprietorship
B)Partnership
C)Corporation
D)Monopoly
15.
The richest fifth of the U.S. population receives approximately _____% of the total income in the economy.
A)75
B)50
C)33
D)25
16.
Which of the following are reasons for government regulation?
A)To provide a legal framework.
B)To protect consumers.
C)To protect the environment.
D)All of the above are true.
17.
A _____ tax is one where the percentage paid in taxes (or tax rate) decreases as income increases.
A)progressive
B)proportional
C)regressive
D)flat
18.
The federal income tax is an example of a:
A)progressive tax.
B)proportional tax.
C)regressive.
D)flat tax.
19.
Which country had the lowest GDP per capita in 2004?
A)China
B)Haiti
C)Ethiopia
D)Mexico
20.
Which is the smallest portion of GDP?
A)Consumption
B)Investment
C)Government spending
D)Net exports
21.
Approximately what percentage of total income is held by the poorest fifth of the population in the U.S.?
A)50
B)23
C)9
D)3
22.
The Social Security tax is an example of a _____ tax.
A)progressive
B)regressive
C)proportional
D)flat
23.
Which of the following is not a function or role of government?
A)providing a legal framework
B)protecting consumers
C)protecting the environment
D)making a profit
24.
_____ was the country with the second highest per capita income in 2004.
A)U.S.
B)Japan
C)Spain
D)China
25.
The U.S. has _____% of the world's population but consumes over _____% of the world's output.
A)1; 90
B)20; 5
C)5; 20
D)10; 50
26.
In 2003 which of the following countries had the most unequal distribution of income?
A)Namibia
B)Chile
C)Sweden
D)China
27.
In 1900 the largest mix of output in the U.S. came from _____; in 2000 it was from _____.
A)farming; manufacturing
B)manufacturing; services
C)farming; services
D)services; farming





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