Question 1

The Council of Economic Advisors generally advocates that the government pursue goals in line with Keynesian economic theory, which advocates all of the following except:&#10;A)Increasing national production&#10;B)Maintaining price stability (or low inflation)&#10;C)Maintaining low unemployment rates&#10;D)Allowing the market to correct course naturally when it falters

Accepted Answer

Neither the Council of Economic Advisors nor Keynesian economic theory encourage allowing a faltering market time to correct course naturally. Keynesian economic theory strongly advocates that government get involved in the marketplace to soften the blow of a recession or depression, as well as to encourage productivity. The CEA often promotes proactive government intervention to stave off similar disasters.

Question 2

When the tax rate increases as the taxable amount increases, the tax is a:&#10;A)Proportional tax&#10;B)Progressive tax&#10;C)Regressive tax&#10;D)Capital gains tax

Accepted Answer

A progressive tax rate increases in accordance with the value of the taxed amount. The U.S. income tax is considered a progressive tax because people who earn more pay a higher tax rate than those who earn less. A proportional tax is a "flat tax," which requires everyone to pay the same rate regardless of income level. A regressive tax is one in which the rate decreases as the taxable amount increases. A capital gains tax is paid on the profit one earns from an investment like stock or real estate.

Question 3

What is the difference between the GDP (gross domestic product) and GNP (gross national product)?&#10;A)The GDP deals with what is generated within a nation's borders, whereas the GNP deals with what is generated by a nation's factors of production.&#10;B)Both the GDP and GNP account for what a nation's citizens and government, alike, spend, invest and earn. However, the GDP also accounts for indirect tax expenditures.&#10;C)The GDP deals with what is generated by a nation's factors of production, whereas the GNP deals with what is generated within a nation's borders.&#10;D)Both the GDP and GNP account for what a nation's citizens and government, alike, spend, invest and earn. However, the GNP also accounts for indirect tax expenditures.

Accepted Answer

The gross domestic product includes the net value of the final goods and services rendered by a country in one year, strictly within its own borders, regardless of whether or not the factors of production (materials, machines and people) belong to that country. For example, the value of a British company physically located in the United States would contribute to the American GDP, not the British. The gross national product includes the net value of the final goods and services rendered by a country in one year, based on its factors of production, whether they are physically within the nation's borders or abroad. For example, the value of an American company located in the United Kingdom would contribute to the American GNP but the British GDP.

Question 4

Which committee in the U.S. House of Representatives is responsible for legislation related to revenue, raising taxes, trade agreements, tariffs, and the bonded debt of the nation?&#10;A)Ways and Means&#10;B)Financial Services&#10;C)Budget&#10;D)Appropriations

Accepted Answer

The House Committee on Ways and Means is chiefly responsible for generating revenue for the nation, and does so by writing tax laws, overseeing trade agreements and tariffs and controlling the bonded debt of the nation. Financial Services handles the public financial sector of the economy, including banking and the Federal Reserve. The Budget Committee is largely responsible for the Congressional role in the national budget and authors the budget resolution each year. The Appropriations Committee determines the government's expenditures and authorizes spending.

Question 5

The practice of consolidating debts to be traded in financial markets is termed:&#10;A)Subprime lending&#10;B)Privatization&#10;C)Monetization&#10;D)Securitization

Accepted Answer

Securitization is the practice of bundling individual contractual debts into securities or bonds that can be traded in financial markets. This practice was one of the contributing factors to the financial crises in the United States and European Union in the late 2000s. The complexity of securitization often masks the reliability of each individual component, making it difficult to monitor a security or bond's inherent level of risk.

Question 6

The organization chiefly responsible for the promotion and supervision of international trade is:&#10;A)The International Monetary Fund&#10;B)The World Trade Organization&#10;C)The United Nations&#10;D)The Organization for Economic Cooperation and Development

Accepted Answer

The World Trade Organization is an international body that promotes and supervises global trade. It works extensively to encourage trade between superpowers and poorer nations, which often have large populations and limited resources. The organization oversees trade negotiations, enforces the terms of trade agreements, and resolves disputes between trading partners.

Question 7

Which economic theory describes how many European empires expanded through colonization in the 16th to mid-18th centuries because founding colonies ultimately increased a state's access to raw natural resources and expanded their marketplace?

A)Colonialism
B)Imperialism
C)Mercantilism
D)Free enterprise

Accepted Answer

Mercantilism is an economic theory that advocated trade as a society's chief wealth-building mechanism. It encouraged colonization because colonies were generally less developed regions in which there were one or more abundant natural resources that could be used in manufacturing. A state's own colonies often became their biggest customers since they were not industrially well developed and their trade policy was largely dictated by the colonizing power.

Question 8

The primary goal of the World Bank is to:&#10;A)Track counterfeiting&#10;B)Monitor how countries spend their money&#10;C)Stabilize exchange rates&#10;D)Reduce poverty

Accepted Answer

The World Bank's primary goal is to reduce poverty by providing loans to developing countries so that they can build the physical and institutional mechanisms that allow a nation to operate. While there are many participating nations, the organization is traditionally led by an American and based in Washington, D.C.

Question 9

The exchange rate of currency is primarily monitored by:&#10;A)The International Monetary Fund&#10;B)The World Bank&#10;C)The United Nations&#10;D)Forex

Accepted Answer

The International Monetary Fund is the body that monitors the exchange rate of currency. It also monitors global financial developments, lends money to member nations who are experiencing payment problems, and promotes international trade. It is aligned with the World Bank and is headquartered in Washington, D.C.

Question 10

NAFTA created a trade bloc that consists of which nations?&#10;A)United States, Canada, United Kingdom, Germany, France and Switzerland&#10;B)United States and the entire European Union&#10;C)United States, United Kingdom and the former Soviet Union&#10;D)United States, Canada and Mexico

Accepted Answer

The North American Free Trade Agreement (NAFTA) created a trade bloc consisting of the United States, Canada and Mexico. Trade blocs are intergovernmental agreements, typically between neighboring nations. NAFTA is the largest trade bloc in the world. The United States' interest in the agreement was shepherded by President George H.W. Bush, but he lost his bid for re-election before he could sign it into law. President Bill Clinton ultimately signed the agreement almost a year after taking office.

Question 11

What is the official currency of Morocco?&#10;A)Franc&#10;B)Dirham&#10;C)Pound&#10;D)Dinar

Accepted Answer

The answer of What is the official currency of Morocco?&#10;A)Franc&#10;B)Dirham&#10;C)Pound&#10;D)Dinar...

Question 12

What is the official currency of Ukraine?&#10;A)Hryvnia&#10;B)Ruble&#10;C)Euro&#10;D)Pound

Accepted Answer

The answer of What is the official currency of Ukraine?&#10;A)Hryvnia&#10;B)Ruble&#10;C)Euro&#10;D)Pound...

Question 13

In which decade did the United States become the world's most productive economy?&#10;A)1960s&#10;B)1940s&#10;C)1910s&#10;D)1890s

Accepted Answer

The answer of In which decade did the United States...

Question 14

What is the official currency of Australia?&#10;A)Australian rupiah&#10;B)Australian pound&#10;C)Australian dollar&#10;D)Australian kina

Accepted Answer

The answer of What is the official currency of Australia?&#10;A)Australian...

Question 15

What are the biggest domestic industries in Egypt?&#10;A)Mining and agriculture&#10;B)Mining and manufacturing&#10;C)Tourism and textiles&#10;D)Textiles and food processing

Accepted Answer

The answer of What are the biggest domestic industries in...

Question 16

Which of the following states is not one of the top four leaders in volume spending in the United States?&#10;A)Illinois&#10;B)Florida&#10;C)Texas&#10;D)New York

Accepted Answer

The answer of Which of the following states is not...

Question 17

Which country has a long history of developing its domestic supplier and distributor relationships, thus making it difficult for foreign companies to enter their marketplace?&#10;A)United States&#10;B)Ireland&#10;C)Jordan&#10;D)Japan

Accepted Answer

The answer of Which country has a long history of...

Question 18

The banks of which of the following nations are open on Thursdays for only a few hours in the morning?&#10;A)South Africa&#10;B)Japan&#10;C)Iran&#10;D)Ecuador

Accepted Answer

The answer of The banks of which of the following...

Question 19

The informal and undocumented trade that dominates domestic trade in India is referred to as:&#10;A)Ill money&#10;B)Black money&#10;C)Bad money&#10;D)Red money

Accepted Answer

The answer of The informal and undocumented trade that dominates...

Question 20

Which United States economic sector has the most establishments or physical locations in which work of this nature is performed?&#10;A)Retail trade&#10;B)Health care and social assistance&#10;C)Accommodation and food services&#10;D)Construction

Accepted Answer

The answer of Which United States economic sector has the...

Question 21

Given the same principal amount, at the same rate over the same period of time, does simple or compound interest earn a higher return?&#10;A)Simple interest earns more because it is assessed on a projected final value of the investment, not the principal amount.&#10;B)Compound interest earns more because it is assessed on a projected final value of the investment, not the principal amount.&#10;C)Simple interest earns more because it is interest earned on the principal amount and any interest accrued up to that point in time.&#10;D)Compound interest earns more because it is interest earned on the principal amount and any interest accrued up to that point in time.

Accepted Answer

The answer of Given the same principal amount, at the...

Question 22

The passage of property and assets to the firstborn child is called:&#10;A)Firstborn acquisition&#10;B)Inheritance&#10;C)Primogeniture&#10;D)Primary inheritance

Accepted Answer

The answer of The passage of property and assets to...

Question 23

Which countries had the largest economies, beginning with the largest, as ordered by nominal GDP, in 1970?&#10;A)United States - Japan - Soviet Union - Germany&#10;B)United States - Soviet Union - West Germany - Japan&#10;C)United States - Soviet Union - United Kingdom - France&#10;D)United States - West Germany - Soviet Union - France

Accepted Answer

The answer of Which countries had the largest economies, beginning...

Question 24

Which countries had the largest economies, beginning with the largest, as ordered by nominal GDP, in 2010?&#10;A)United States - China - Japan - Germany&#10;B)United States - Japan - China - Germany&#10;C)United States - China - Japan - United Kingdom&#10;D)United States - Japan - Germany France

Accepted Answer

The answer of Which countries had the largest economies, beginning...

Question 25

Into how many sectors is the U.S. economy divided?&#10;A)10&#10;B)18&#10;C)12&#10;D)20

Accepted Answer

The answer of Into how many sectors is the U.S....

Question 26

Which United States economic sector has the highest annual payroll expense?&#10;A)Health care and social assistance&#10;B)Finance and insurance&#10;C)Manufacturing&#10;D)Professional, scientific and technical services

Accepted Answer

The answer of Which United States economic sector has the...

Question 27

Which United States economic sector earns the highest revenue per year?&#10;A)Manufacturing&#10;B)Wholesale trade&#10;C)Retail trade

Accepted Answer

The answer of Which United States economic sector earns the...

Question 28

Which United States economic sector has the highest average salary?&#10;A)Management of companies and enterprises&#10;B)Utilities&#10;C)Finance and insurance&#10;D)Information

Accepted Answer

The answer of Which United States economic sector has the...

Question 29

Which United States economic sector has the most paid employees?&#10;A)Wholesale trade&#10;B)Retail trade&#10;C)Manufacturing&#10;D)Health care and social assistance

Accepted Answer

The answer of Which United States economic sector has the...

Question 30

From which country does the United States import the most frequently?&#10;A)Mexico&#10;B)Japan&#10;C)Canada&#10;D)China

Accepted Answer

The answer of From which country does the United States...

Question 31

Which law in economics states that consumers have a threshold for how much of a product they will buy, even if they can afford to buy more?&#10;A)Law of markets&#10;B)Law of diminishing marginal utility&#10;C)Law of demands&#10;D)Law of diminishing marginal returns

Accepted Answer

The answer of Which law in economics states that consumers...

Question 32

When a company invests in offices, factories or any other type of facility outside of the nation in which it is headquartered, the expenditure is called its:&#10;A)Foreign direct investments (FDI)&#10;B)International investment costs (IIC)&#10;C)Foreign investment deposits (FID)&#10;D)Direct foreign deposits (DFD)

Accepted Answer

The answer of When a company invests in offices, factories...

Question 33

The law of supply and demand dictates that if the supply is low and the demand is high:&#10;A)The price will start moderate and increase gradually until it's high.&#10;B)The price will start high and decrease gradually until it's moderate.&#10;C)The price will be high.&#10;D)The price will be low.

Accepted Answer

The answer of The law of supply and demand dictates...

Question 34

What is the difference between macroeconomics and microeconomics?&#10;A)Microeconomics is the study of people and individual businesses; macroeconomics is the study of entire economies.&#10;B)Microeconomics studies the role of the individual spender in the economy: macroeconomics studies any group or entity consisting of more than one person.&#10;C)Microeconomics is the study of entire economies; microeconomics is the study of people and individual businesses.&#10;D)Microeconomics studies any group or entity consisting of more than one person; macroeconomics studies the role of the individual spender in the economy.

Accepted Answer

The answer of What is the difference between macroeconomics and...

Question 35

Which of the following scenarios would not produce an outlier in standard supply and demand theory?&#10;A)The cost of non-perishable food items or emergency supplies like batteries prior to a declaration of war or other foreseeable mass catastrophe&#10;B)The cost of a new gadget at the time of its public release&#10;C)The cost of a popular, much-hyped toy in December&#10;D)The cost of a popular holiday food the week before the holiday

Accepted Answer

The answer of Which of the following scenarios would not...

Question 36

Which of the following countries is not a member of OPEC?&#10;A)Jordan&#10;B)Qatar&#10;C)Angola&#10;D)Nigeria

Accepted Answer

The answer of Which of the following countries is not...

Question 37

The official currency of Denmark is:&#10;A)The krone&#10;B)The (Danish) dollar&#10;C)The franc&#10;D)The euro

Accepted Answer

The answer of The official currency of Denmark is:&#10;A)The krone&#10;B)The...

Question 38

Which of the following is not a function of the Federal Reserve Board?&#10;A)Controlling the United States money supply&#10;B)Adjusting the prime interest rate&#10;C)Supervising the FDIC&#10;D)Performing open market operations

Accepted Answer

The answer of Which of the following is not a...

Question 39

What is the limit the FDIC is willing to guarantee bank customers who hold savings accounts in a participating bank?&#10;A)$50,000&#10;B)$250,000&#10;C)$25,000&#10;D)$100,000

Accepted Answer

The answer of What is the limit the FDIC is...

Question 40

FDIC is an acronym for which financial institution?&#10;A)Federal Direct Intermonetary Committee&#10;B)Financial Direct Insurance Congress&#10;C)Federal Deposit Insurance Corporation&#10;D)Financial Deposit Intermonetary Conglomerate

Accepted Answer

The answer of FDIC is an acronym for which financial...

Question 41

What are the chief imports of South Africa?&#10;A)Food and pharmaceuticals&#10;B)Pharmaceuticals and motor vehicle parts and accessories&#10;C)Food and automobiles&#10;D)Automobiles and motor vehicle parts and accessories

Accepted Answer

The answer of What are the chief imports of South...

Question 42

What are the chief imports of China?&#10;A)Machinery and food&#10;B)Industrial supplies and machinery&#10;C)Food and telecommunication equipment&#10;D)Electrical machinery and food

Accepted Answer

The answer of What are the chief imports of China?&#10;A)Machinery...

Question 43

Which country receives the most exported goods from the United States?&#10;A)Mexico&#10;B)Canada&#10;C)Japan&#10;D)China

Accepted Answer

The answer of Which country receives the most exported goods...

Question 44

What are the chief imports of Switzerland?&#10;A)Machinery and chemicals&#10;B)Machinery and food&#10;C)Automobiles and precision tools&#10;D)Precision tools and textiles

Accepted Answer

The answer of What are the chief imports of Switzerland?&#10;A)Machinery...

Question 45

What are the chief exports of Kenya?&#10;A)Tea and coffee&#10;B)Coffee and refined petroleum products&#10;C)Vegetables and fruits&#10;D)Iron plating and tea

Accepted Answer

The answer of What are the chief exports of Kenya?&#10;A)Tea...

Question 46

What are the chief exports of Brazil?&#10;A)Coffee and manufactured goods&#10;B)Manufactured goods and iron ore&#10;C)Coffee and soybeans&#10;D)Footwear and furniture

Accepted Answer

The answer of What are the chief exports of Brazil?&#10;A)Coffee...

Question 47

What are the chief imports of Mexico?&#10;A)Industrial supplies and consumer electronics&#10;B)Food and machinery&#10;C)Machinery and industrial supplies&#10;D)Food and automobiles

Accepted Answer

The answer of What are the chief imports of Mexico?&#10;A)Industrial...

Question 48

What are the chief exports of Germany?&#10;A)Aircraft and electrical machinery&#10;B)Telecommunication products and motor vehicle parts and accessories&#10;C)Automobiles and electrical machinery&#10;D)Automobiles and motor vehicle parts and accessories

Accepted Answer

The answer of What are the chief exports of Germany?&#10;A)Aircraft...

Question 49

What are the chief exports of Saudi Arabia?&#10;A)Polymers and crude petroleum&#10;B)Refined petroleum products and industrial alcohol&#10;C)Polymers and industrial alcohol&#10;D)Crude petroleum and refined petroleum products

Accepted Answer

The answer of What are the chief exports of Saudi...

Deck 21: Economics