Deck 1: Introduction

Question 1

Deregulation is the process of _________ government control over industries.

A) increasing
B) eliminating
C) reducing
D) marginalizing

Answer 1

C
Explanation: Deregulation is the process of reducing government control over industries.

Question 2

In a centrally planned economy,decisions are made by

A) private businesses.
B) large corporations.
C) low-level government employees.
D) top-level government officials.

Answer 2

D
Explanation: Most economic activities in a centrally planned economy are controlled by the government.

Question 3

The most consistent force for economic growth and progress is

A) government regulation.
B) the gross domestic product.
C) technology integration.
D) economic competition.

Answer 3

D
Explanation: History suggests that economic competition is the most consistent force for growth and progress.

Question 4

A centrally planned economy encourages investment and innovation.

Question 5

Which of the following is NOT part of an economy's financial market?

A) The residential mortgage market.
B) The stock market.
C) Banks and brokerage firms.
D) Political action committees.

Question 6

Poorer countries started to develop economically when they

A) focused on becoming net traders.
B) figured out what the rest of the world wanted, and responded.
C) focused on becoming importers.
D) focused on domestic economic regulation.

Question 7

Most economists agree on the amount of government intervention necessary in an economy.

Question 8

Deregulation includes reducing governmental control over some aspects of private industry,while increasing control of others.

Question 9

History suggests that economic competition is the most consistent force for economic growth and progress.

Question 10

Globalization is the exchange of ________________ among countries.

A) e-mail
B) telephone calls
C) goods, services, ideas, and people
D) money

Question 11

A laissez-faire economy has minimal,if any,government regulations or laws affecting the economy.

Question 12

Technological change is a key force in shaping today's economy.

Question 13

Globalization is the increasing exchange of goods,services,ideas,and people among a small community.

Question 14

Technological change has always been the critical factor in raising living standards,even going as far back as the development of the __________.

A) steam engine
B) iPod
C) bicycle
D) fluorescent light

Question 15

Governments generally take responsibility for

A) deciding what is produced by most businesses.
B) determining the moral code.
C) making sure the economy remains healthy.
D) the purchasing decisions of households.

Question 16

The gross domestic product is calculated by adding up the

A) value of all goods and services produced by domestic companies abroad.
B) number of all tangible goods produced in a domestic economy.
C) value of all goods and services produced within the nation.
D) value of services produced domestically and goods produced overseas.

Question 17

Technological change is the only reason for globalization.

Question 18

Economics is the study of how individuals,businesses,and governments make decisions and make trade-offs in the face of scarce resources.

Question 19

China and India have economically prospered recently by introducing

A) more centralized planning.
B) greater government intervention.
C) a stronger central bank.
D) a more market-based economy.

Question 20

The gross domestic product is the dollar value of all goods and services produced by the economy.

Question 21

The top _____% of U.S.households earn more than half of the country's income.

A) 25
B) 15
C) 35
D) 20

Question 22

Economics competition can have which of the following negative effects on a domestic economy?

A) It drives up wages and profits.
B) It protects domestic jobs.
C) It increases the profits of domestic suppliers.
D) It drives down wages and profits.

Question 23

One measurement of economic prosperity is

A) the happiness index.
B) the gross domestic policy.
C) interest rates.
D) the gross domestic product.

Question 24

What was the impact of "subprime" mortgages on the economy?

A) They reduced interest rates.
B) They increased defaults and caused large losses at financial institutions.
C) They had a positive impact on economic growth.
D) They initially reduced profits and sales of lenders.

Question 25

An example of a company that uses financial markets to raise money is

A) a local television news website.
B) your local carryout restaurant.
C) the Ford Motor Company.
D) the Social Security Administration.

Question 26

Closed economies generally do ______ open economies,in the long run.

A) slightly better than
B) worse than
C) about the same as
D) at least five times better than

Question 27

Which of the following is part of the U.S.government's economic safety net?

A) Social Security.
B) Blue Cross and Blue Shield.
C) Church-affiliated food kitchens.
D) National Sisters of the Poor Welfare Agency.

Question 28

Which of the following countries is NOT among the 10 largest economies in the world?

A) Israel.
B) China.
C) Brazil.
D) India.

Question 29

The government provides what type of incentives to the housing industry in order to promote growth?

A) Tax-deductible interest.
B) Strict building codes.
C) Direct mortgage lending.
D) No-interest loans.

Question 30

For the United States,one important benefit of foreign trade is

A) less domestic competition.
B) decreased domestic competition.
C) reality checks in the economy.
D) access to cheaper goods and services.

Question 31

Which of the following is an example of technological change?

A) Filet mignon.
B) Ralph Lauren clothing.
C) The personal computer.
D) Starbucks coffee.

Question 32

Besides the gross domestic product,another measure of how well an economy is doing is:

A) annual household income.
B) government tax rates.
C) popularity polls.
D) citations in economic journals.

Question 33

Federal taxes have which of the following effects on the economy?

A) If taxes are increased, the economy expands due to a balanced budget.
B) If taxes are decreased, businesses will invest the difference back into the economy.
C) There is no definitive agreement on the effect.
D) Lower federal taxes will cause budget surpluses.

Question 34

The income and wealth gap in the United States has

A) stayed the same in recent years.
B) increased in recent years.
C) decreased in recent years.
D) helped reduce the federal budget deficit.

Question 35

The influx of inexpensive,reliable cars from Japan in the 1980s forced domestic producers to

A) improve the reliability and cost of their cars.
B) ask for greater import protections.
C) lobby for a closed economy.
D) build larger, more luxurious vehicles.

Question 36

A laissez-faire economy has

A) a large amount of government regulation.
B) a centrally planned economy.
C) a policy of government intervention.
D) very little government regulation of the economy.

Question 37

Over the past 30 years,most countries have moved toward

A) more government regulation of the economy.
B) less government regulation of the economy.
C) planned central economies.
D) closing the economy to imports.

Question 38

The financial markets do NOT include which of the following?

A) Banks.
B) Stock markets.
C) Government regulatory agencies.
D) Nonprofit organizations.

Question 39

Deregulation in the United States began with what industry in the 1970s?

A) The postal service.
B) Telecommunications.
C) The agricultural industry.
D) Interstate trucking.

Question 40

Top-down management of an economy by the government has consistently

A) produced exceptional results in economic growth.
B) created incentives and opportunities for businesses to expand.
C) caused double-digit increases in GDP.
D) led to low rates of economic growth.

Question 41

Most people have _______ feelings about the financial markets.

A) mixed
B) happy
C) negative
D) no

Question 42

The textbook says that which of the following is among the key forces shaping today's economy?

A) Political scandals.
B) Government regulations.
C) Globalization.
D) Increasing income inequality.

Question 43

Which of the following is presented in the text as an issue about which reputable economists might disagree?

A) Whether unemployment rose significantly during the Great Recession.
B) Whether the government should provide more scholarship funds.
C) The impact on the federal budget of an increase in military spending.
D) The definition of a market transaction.

Question 44

Which is not an example of government intervention in the economy?

A) The Food and Drug Administration.
B) The Federal Aeronautics Administration.
C) The Federal Reserve.
D) The Brookings Institute.

Question 45

Which of the following is NOT mentioned in the textbook as a constraint that affects the economy?

A) Households are limited in what they can purchase by their income.
B) Businesses are limited in what they can produce by technology.
C) Households are limited in what they can purchase by government regulations.
D) Businesses are limited in what they can produce by past investments in factories, processes and materials.

Question 46

Suppose the government decides to eliminate some,but not all,of the rules that govern how investment banks conduct their business.This would be an example of

A) laissez-faire policy.
B) deregulation.
C) central planning.
D) economic competition.

Question 47

Nuclear power in the United States turned out to be

A) a boon to the economy.
B) well worth the time and investment.
C) far more expensive and troublesome than expected.
D) a hazard-free source of limitless power.

Question 48

What is one reason why countries are more interconnected today?

A) Technology.
B) Decreased exports.
C) Decreased imports.
D) Increased costs of communications.

Question 49

Which of the following countries have better retirement benefits and more job security than the United States?

A) France and Germany.
B) China and India.
C) Canada and Mexico.
D) No other countries do.

Question 50

The textbook says that which of the following is among the key forces shaping today's economy?

A) Technological change.
B) Government regulations.
C) Decreasing consumer confidence.
D) Increasing rates of unionization.

Question 51

Supply and demand are examples of

A) the tools of economics.
B) outdated economic theories.
C) technological advances.
D) a primary source of disagreement among economists.

Question 52

By total economic output (gross domestic product),the United States ranks as the ______ largest economy in the world.

A) first
B) second
C) third
D) tenth

Question 53

Renewable energy sources provided _____% of U.S.needs as of 2009.

A) 8
B) 15
C) 20
D) Almost 100

Question 54

Which of the following is NOT mentioned in the textbook as one of its three goals?

A) Presenting the basic tools of economics.
B) Promoting an understanding of markets.
C) Showing the ways in which the possibilities of today's economy are expanding.
D) Teaching how to successfully invest money in the stock market.

Question 55

The textbook says that which of the following is among the key forces shaping today's economy?

A) Mistrust of capitalism.
B) Social networking.
C) Illegal accounting practices.
D) The evolution of financial markets.

Question 56

Gross domestic product is

A) not a useful indicator of prosperity.
B) the only indicator of prosperity that economists use.
C) one of many indicators of prosperity, some of which are monetary, and some of which are nonmonetary.
D) one of many indicators of prosperity, all of which are monetary in nature.

Question 57

Can economic competition be viewed as a positive force for growth and progress?

A) No, economic competition historically had neither a positive nor a negative effect.
B) No, because there is more poverty today than in the past.
C) Yes, because economic competition of any type always leads to growth and progress.
D) Yes, as long as it is conducted within a fair set of rules.

Question 58

Technological change is generally

A) very uneven.
B) slow across the board.
C) evenly divided across industries.
D) always manageable by government.

Question 59

Chinese leader Deng Xiaoping began what process in the 1980s?

A) The Chinese cultural revolution.
B) Moving the economy toward central planning.
C) Shifting away from a centralized economy.
D) Adding multiparty democracy.

Question 60

In 2009 the gross domestic product of the United States was

A) $14.1 million.
B) $14.1 billion.
C) $14.1 trillion.
D) $46,000.

Question 61

What are the main forces shaping today's economy,and how are they impacting the economy?

Question 62

Why is the gross domestic product one of the indicators of prosperity?

Question 63

What does an economic safety net provide,and why would a country want to have one?

Question 64

How does top-down management of an economy affect it?

Question 65

Which of the following does NOT explain why there are so many disagreements among economists?

A) In some cases, there aren't enough data to answer the question.
B) In some cases, the controversy is aggravated by political agendas.
C) In some cases, individuals may stand to gain from policy changes.
D) In some cases, economists have simply not investigated the issue at hand.

Question 66

Why do economists disagree on so many economic policy questions?