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| 1 | |
Which of the following would be a topic emphasized in a microeconomics class? |
| | A) | How a nation's GDP is computed. |
| | B) | The reason's why the unemployment rate for the economy is rising or falling. |
| | C) | How market conditions determine the price of a specific product. |
| | D) | How the government can use fiscal and monetary policies to stabilize the economy. |
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| 2 | |
Reality Entertainment, Inc is a major producer of reality TV programming. The company faces fierce competition from three other major producers of similar shows. Together, Reality Entertainment and its three rivals control almost the entire reality TV programming. Their market environment is called: |
| | A) | An oligopoly. |
| | B) | A duopoly. |
| | C) | Monopolistic competition. |
| | D) | A quasi-monopoly. |
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| 3 | |
In the long run, the point on a graph where the supply for a product or service equals the demand for the product or service is _____________. |
| | A) | the total profit earned by producers |
| | B) | the total amount of labor that will be employed in that market |
| | C) | the amount of time it takes to bring together the buyers and sellers of the good |
| | D) | the equilibrium price |
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| 4 | |
While touring Greece last year, Angela landed in the hospital for five days when she was run-over by a careless motorcyclist. To no avail, her son and daughter who were also on the trip tried frantically to pay for the medical care required to set her broken bones. There she lay with no casts, limbs hanging until the state's doctors deemed it her turn for attention. In nations where medicine is ____________, individuals often wait for several days, and often several years for proper medical attention. |
| | A) | communized |
| | B) | capitalized |
| | C) | socialized |
| | D) | equalized |
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| 5 | |
Which of the following people would tend to favor a socialist economy? |
| | A) | John wants to live in a country with low marginal tax rates. |
| | B) | Robin wants to live in a country that encourages rapid economic growth. |
| | C) | Liz wants to live in a country with limited government regulation. |
| | D) | Fred prefers to live in a country that promotes social equality. |
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| 6 | |
The next wave of marketable innovations may involve new ways to produce and conserve energy. If we can turn new technology into marketable products and services that produce energy to run our businesses and homes, the U.S. could see a surge in output of goods and services. The Department of Economic Development would document this surge by measuring the ______. |
| | A) | Gross Domestic Product |
| | B) | Consumer Price Index |
| | C) | Consumer Marginal Index |
| | D) | number of workers who are frictionally employed |
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| 7 | |
Which of the following indicators provides the clearest indication that an economy is experiencing deflation? |
| | A) | A decrease in the unemployment rate |
| | B) | A decrease in GDP |
| | C) | An increase in the PPI |
| | D) | A decrease in the CPI |
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| 8 | |
While scanning the movies section in your local online newspaper, you click on the business section by mistake. While you're there, you quickly scan a report that says government spending will again exceed tax revenues in the current year. This means that the: |
| | A) | total national debt is likely to increase. |
| | B) | national deficit is likely to decrease. |
| | C) | rate of inflation is likely to fall. |
| | D) | monetary policies pursued by the Fed need tightening. |
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| 9 | |
The Federal Reserve System operates: |
| | A) | as a semi-private organization not under the direct control of the government. |
| | B) | under the direct control of the executive branch of the government. |
| | C) | under the direction of the Banking Oversight Committee of Congress. |
| | D) | as a special agency of the U.S. Treasury. |
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| 10 | |
Senator Gong Lee is alarmed at the state of the economy. Unemployment is high and GDP is low. Senator Lee wants Congress to take action to increase its expenditures and cut taxes in order to stimulate the economy. The actions called for by Senator Lee are examples of: |
| | A) | monetary policy. |
| | B) | fiscal policy. |
| | C) | incomes policy. |
| | D) | social investment policy. |
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