Deck 2: The Economy: Myth and Reality

Question 1

The factors of production include all goods and services produced in an economy.

Answer 1

False

Question 2

An open economy is one in which exports and imports constitute a large share of GDP.

Answer 2

True

Question 3

The United States is one of the most marketized economies in the world.

Answer 3

True

Question 4

Outputs include goods but not services.

Question 5

Gross domestic product is the money value of all final goods and services produced in an economy in a year.

Question 6

The U.S.economy is unique for both its size and prosperity.

Question 7

The U.S.economy rarely grows.

Question 8

Gross domestic product is the money value of manufacturing production in a year.

Question 9

The United States is one of the least marketized economies in the world.

Question 10

The U.S.economy is relatively open in terms of economic activity related to international trade.

Question 11

Real GDP per capita in the U.S.grows over time.

Question 12

In the United States, all property is privately owned.

Question 13

The U.S.economy is relatively closed in terms of economic activity related to exports and imports.

Question 14

Population density varies little between the fifty states.

Question 15

Government production accounts for about half of all GDP in the United States.

Question 16

An open economy produces most of the goods and services that it needs, with few imports and exports.

Question 17

Prosperity in the United States is evenly distributed across the fifty states.

Question 18

Real GDP is the dollar value of all goods and services produced in an economy.

Question 19

GDP is a measure of the total output of an economy.

Question 20

The United States is the largest national economy in the world.

Question 21

A recession is a period of time in which the total output of the economy falls.

Question 22

The total market value of capital assets in the United States is over $30 trillion dollars.

Question 23

Workers earn more than half of the income generated by the production process.

Question 24

In 2009, per capita real GDP was roughly half its value in 1960.

Question 25

A minority of American women work outside of the home.

Question 26

Workers earn less than half of the income generated by the production process.

Question 27

Unemployment in the United States varies considerably over time.

Question 28

Approximately half of all U.S.workers are employed by various levels of government.

Question 29

Teenage employment in the United States has risen in the last two decades.

Question 30

The majority of American workers are employed in the service sector of the economy.

Question 31

Roughly 145 million people in the United States hold jobs.

Question 32

A recession is a period of time in which the total output of the economy rises.

Question 33

Consumer spending accounts for about 70 percent of GDP.

Question 34

A recession is a period of time in which real GDP falls.

Question 35

Profits account for about 30 cents out of each dollar spent on goods in the United States.

Question 36

Recessions are periods of declining economic activity.

Question 37

Over the last several years the United States has had lower unemployment rates than most European countries.

Question 38

The federal government employs more civilians than state and local governments.

Question 39

The U.S.economy has grown steadily over the years.

Question 40

The majority of American workers are employed in the manufacturing sector.

Question 41

The nationality of a company and a product is easily determined.

Question 42

Antitrust laws are designed to promote competition.

Question 43

There are about 5 million business firms in the Unites States.

Question 44

Multinational businesses produce and sell goods around the world.

Question 45

National defense made up the largest portion of federal expenditures in 2009.

Question 46

One important role for government as referee is in defining and enforcing property rights.

Question 47

The government's budget accounts for about 80 percent of GDP in the United States.

Question 48

A tax is progressive if it raises a greater fraction of total tax revenue every year.

Question 49

Education accounts for the largest share of state and local government spending.

Question 50

In a mixed economy, there is some public influence over the workings of free markets.

Question 51

A tax is progressive if the ratio of taxes to income rises as income rises.

Question 52

A tax must be progressive if an individual with a higher income pays more dollars in taxes than an individual with a lower income.

Question 53

The personal income tax is the single largest source of revenue for the federal government.

Question 54

Government spending plays no role in meeting our social and public needs.

Question 55

The corporate income tax is the single largest source of revenue for the federal government.

Question 56

Government in the United States spends more as a percentage of GDP than in most other industrialized nations.

Question 57

Transfer payments are money received as grants from government.

Question 58

Government is unnecessary in a free enterprise economy such as the United States.

Question 59

The federal government receives most of its revenue from personal income taxes and payroll taxes.

Question 60

American households spend more of their incomes on goods than on services.

Question 61

How does the U.S.economy rank in size?

A) first in economic output
B) second in economic output
C) third in economic output
D) fourth in economic output
E) fifth in economic output

Question 62

Imports from China represent ____ of total U.S.imports.

A) less than 20%
B) approximately 40%
C) approximately 60%
D) more than 80%

Question 63

Inputs, or factors of production, include

A) labor.
B) machinery.
C) natural resources.
D) all of the above.

Question 64

Gross domestic product is

A) the largest industry in an economy.
B) the money value of all final goods and services produced in a year.
C) the volume of goods and services which are subject to international trade.
D) goods and services produced by private companies.
E) non-market production of goods and services.

Question 65

A mixed economy is one that combines public and private ownership of property.

Question 66

The United States produces ____ of what it consumes, and consumes ____ of what it produces.

A) little, little
B) little, most
C) most, little
D) most, most

Question 67

Government ownership of property and resources in the United States is

A) about as common as it is in European countries.
B) widespread; the United States is a leader in the amount of government ownership of resources.
C) relatively rare; the United States is mostly privatized.
D) rare, but has been increasing rapidly as the United States catches up to other countries.

Question 68

Which of the following is the most open economy?

A) Germany
B) the Netherlands
C) the United States
D) Japan
E) Canada

Question 69

How does the United States compare to other advanced, industrialized economies on the issue of openness?

A) It is completely closed.
B) It is one of the less open of them.
C) It is about average in openness.
D) It is one of the more open of them.
E) It is the most open of them.

Question 70

The working population of the United States is approximately

A) 145 million
B) 290 million
C) 300 million
D) 1.3 billion

Question 71

The United States has the largest economy in the world because

A) it has the most land to work with.
B) it has a large population.
C) American workers are very productive.
D) both b and c are correct.

Question 72

The United States is an example of a mixed economy.

Question 73

Which of the following is the best definition of openness?

A) The average of imports expressed as a share of GDP.
B) The average of goods traded in markets expressed as a share of GDP.
C) The average of imports and exports expressed as a share of GDP.
D) The average trade balance expressed as a share of GDP.
E) The average of exports expressed as a share of GDP.

Question 74

The United States economy is

A) the third largest in the world.
B) larger than all other national economies combined.
C) second largest in the world, behind Japan.
D) largest in the world.

Question 75

Which of the following is the most closed economy?

A) the Netherlands
B) the United States
C) Germany
D) Russia
E) Canada

Question 76

Capitalism and free enterprise are common, and the United States

A) has just begun to move in that direction after years of central planning.
B) has gone further in that direction than almost any other country.
C) is becoming more "free," but is not as capitalistic as many others.
D) is considering a major change to "free up" its economy as many others have.
E) is leading the move toward greater central planning and control.

Question 77

In 2009, about what percentage of goods and services sold in the United States was imported?

A) 4%
B) 13%
C) 20%
D) 88%

Question 78

On a world scale, how populous is the U.S.economy?

A) first
B) second
C) third
D) fourth
E) fifth

Question 79

As of 2009, annual imports to the U.S.were approximately ____ and annual exports from the U.S.were approximately ____.

A) $0.6 trillion; $1.5 trillion
B) $2.0 trillion; $0.6 trillion
C) $2.0 trillion; $1.5 trillion
D) $1.5 trillion; $2.0 trillion
E) $2.0 trillion; $2.0 trillion

Question 80

If California were a separate economy, it would be the ____ largest economy on earth.

A) second
B) third
C) fifth
D) eighth