Question 1

Deregulation is the process of _________ government control over industries.
A) increasing
B) eliminating
C) reducing
D) marginalizing

Accepted Answer

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.

Accepted Answer

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.

Accepted Answer

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

Question 4

A centrally planned economy encourages investment and innovation.

Accepted Answer

Centrally planned economies seem to do poorly in the long run. Top-down management reduces insecurity, but at the cost of reducing incentives to innovate and make improvements.

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.

Accepted Answer

Financial markets are the parts of the economy connected with borrowing, investing, or transferring money.

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.

Accepted Answer

Developing countries prosper when they export goods and services that solve a need. China and India are two examples of such economies.

Question 7

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

Accepted Answer

Many leading economic theories differ as to the amount and type of government intervention that is necessary for a country's economy.

Question 8

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

Accepted Answer

Deregulation is the process of reducing government control over markets.

Question 9

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

Accepted Answer

A company has a much stronger incentive to innovate and to produce a better and cheaper product if it knows that its rival is trying to take its customers.

Question 10

Globalization is the exchange of ________________ among countries.
A) e-mail
B) telephone calls
C) goods, services, ideas, and people
D) money

Accepted Answer

Globalization is the increasing exchange of goods, services, ideas, and people among countries.

Question 11

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

Accepted Answer

A laissez-faire economy has few government regulations or laws.

Question 12

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

Accepted Answer

There are three main forces shaping today's economy: technological change, globalization, and the evolution of financial markets.

Question 13

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

Accepted Answer

Globalization is the increasing exchange of goods, services, ideas, and people among countries.

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

Accepted Answer

From the development of the steam engine, the automobile, and electricity through the creation of computers and the Internet, technological change has been the critical factor in raising living standards.

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.

Accepted Answer

The government issues money, insures bank deposits, and regulated the banks and the financial system to maintain a healthy economy.

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.

Accepted Answer

Gross domestic product is the dollar value of the total output of an economy; based on final goods and services produced in a year.

Question 17

Technological change is the only reason for globalization.

Accepted Answer

Technological change by itself is not enough to explain the pull of globalization. Most people accept that being open to the global economy brings enormous advantages.

Question 18

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

Accepted Answer

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

Accepted Answer

Developing countries such as China and India have prospered by introducing more elements of a U.S.-style economy, including more competition, start-ups of new companies, and much less top-down management by the government.

Question 20

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

Accepted Answer

Gross domestic product is the dollar value of the total output of a national economy over a one year period.

Quiz 1: Introduction

Deregulation is the process of _________ government control over industries.

In a centrally planned economy,decisions are made by

The most consistent force for economic growth and progress is

A centrally planned economy encourages investment and innovation.

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

Poorer countries started to develop economically when they

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

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

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

Globalization is the exchange of ________________ among countries.

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

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

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

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

Governments generally take responsibility for

The gross domestic product is calculated by adding up the

Technological change is the only reason for globalization.

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

China and India have economically prospered recently by introducing

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