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gravid is A ) tools, equip manpowert, and factories used in the proceeds of goods and run one of four factors of harvest-tideion. Economics is the use of what to pull in and distribute goods and services? right-hand(a) D ) re quotations Want is specify B ) way of expressing a invent that leads to a preference for some goods over otherwises The implicit in(p) stinting problem is purify B ) scarmetropolis. Why do economists need to find the answer to altogether(a) 3 of these questions? squargon up D ) in that respect argon not enough resources to satisfy peoples seemingly unlimited wants grocery stores where productive resources ar bought and sold atomic number 18 ______ grocerys. line up A ) factor The key feature of the circular hunt of economic activity is the sink C ) market. Economics is based on enlighten B ) scarcity. includes the tools, equipment, machinery, and factories used in the production of goods and services. even up B ) Capital Twenty share of the worlds people in the wealthiest nations consume ____ percent of the worlds goods and services. make better A ) 86 In this passing game, Too a good deal marketing today focuses on awareness rather than reasons to buy. In the old days, awareness advertising was more(prenominal) effective. there was less competition. on the whole you had to worry to the highest degree was whether or not people remembered your product. As technology and more kinds of media live come about, its no longer enough to be remembered. The consumer has too many choices. Your marketing has to send the message that you are relevant. You need to be sending reasons to buy. Advertisers are advised to focus on the economic concept of line up C ) utility Manufactured goods needed to produce other goods and services are c tout ensembleed coif B ) capital goods. The dollar measure out of all final goods and services and the ost comprehensive measure of a dry lands total production turnout is objurgate D ) Gross Domestic Product (gross domestic product). The three basic economic questions everyone must answer are cook up C ) WHAT to produce, HOW to produce, FOR WHOM to produce. compassionate capital is conciliate B ) the sum of the skills, abilities, health, and motivation of people. According to Alice Rivlin in this race Economic literacy is kindred having a working knowledge of a conflicting language. If you are with a pigeonholing of foreigners and dont speak their language at all, you feel excluded.If you have a implicit in(p) working knowledge of the language, you can at least(prenominal) follow the drift of the conversation, ask a few questions and feel that, even if you are not getting the fine supermans, you are not totally leftfield out and you have a basis for acquiring more knowledge. That, it seems to me, is what economic literacy heart and soul-a rudimentary working knowledge of the concepts and language of economic activity. If you have a rudimentary work ing knowledge of economic concepts, you will be Correct B ) able to ask questions to gain more knowledge. Factors of production is/are CorrectB ) productive resources that make up the four categories of land, capital, labor, and entrepreneurship. There Is No Such Thing As A Free Lunch reminds us that Correct A ) resources are barely and that we must make occupyful economic decisions regarding WHAT, HOW, and FOR WHOM to produce. In this passage, To take an example, whizz man draws out the wire, other straightens it, a third cuts it, a fourth points it and the do of a pin is, in this manner, divided into about eighteen distinct operations. Adam Smith is describing the basic economic concept of CorrectC ) division of labor. The situation in which some necessities have little value while some non-necessities have a much higher value is known as Correct A ) paradox of value. The property used to buy the tools and equipment needed for production is known as Correct C ) financial ca pital. In which type of prudence do consumers and privately owned professiones make the major(ip)ity of the WHAT, HOW, and FOR WHOM decisions?. Correct B ) light enterp overturn Division of labor is a characteristic of Correct B ) prevarication line production. The free market economy has developed a strong CorrectB ) system of banks. In modern economies, the medium of ex spay is Correct B ) money. Which of the pursual(a) lists the four factors of production? Correct D ) land, labor, capital, entrepreneurs Actions in one wear out of the country or world that have an economic impact on what happens elsewhere are examples of Correct D ) economic interdependence. Uneven distribution of oil reserves around the world is an example of scarcity of Correct C ) geography. One return of a ___________ economy is that it gradually ad scarces to change over date. Correct A ) market A traditional economy is an CorrectB ) economy in which the allotment of resources and nearly all other e conomic activity from ritual or habit. The high degree of freedom in a market system is reach outd by the fact that Correct A ) producers can make whatever they think will sell. To arrive at an economic decision, a decision-making grid may be used to evaluate Correct C ) alternative choices of action. Who makes economic decisions in a command economy? Correct C ) the government An example of a market economy is Correct C ) the united States Economics is the use of what to produce and distribute goods and services? Correct D ) resourcesIn the apostrophize-benefit analysis describe in this passage Research has long demonstrated the fosterageal value of early intervention for Americas at-risk children, but a new study also shows the federal programs are a wise semipublic investment. who are the investors A cost-benefit analysis of the federally funded Chicago Child-Parent Center program, which serves children from low-income families in Chicagos inner city shows that an averag e annual cost of $6,730 per child generated a total return to society at large of $47,759 per participant. Who benefited from the savings? Correct C ) all of societyA popular ideal used to illustrate the concept of opportunity cost is Correct A ) the production possibilities frontier. Which of the followers dress hat describes the relationship between administer-offs and opportunity costs? Correct A ) opportunity costs are incurred when trade-offs are made. The study of economics is important because it enables us to Correct C ) become better decision makers. The close important play of a distribution system is to link _____. Correct C ) producers and consumers Which term refers to the idea that if you have more of one thing, you must have less of another? CorrectB ) opportunity cost What type of economic system does this passage So long as mankind lived by raising crops and herding animals, there was not much need for measuring small units of time. The seasons were all impo rtant-to know when to expect the rain, the snow, the sun, the cold. Why bother with hours and minutes? Daylight was the alone important time, the only time when men could work. describe? Correct A ) traditional economy The purpose of government in a command economy is to Correct C ) make major economic decisions. A market economy Correct A ) does not provide for everyones basic needs.Opportunity cost is the Correct D ) cost of the next best alternative use of money, time, or resources when one choice is made rather than another. An economy at its production possibilities frontier is operating Correct B ) at full potential. The term standard of living refers to Correct A ) quality of life in a country. Bar graphs Correct A ) shows relationships between diverse data series is the bar graph. Here the height of the bar represents the measured value or frequency The higher or longer the bar, the greater the value. The briny drawback of the traditional economy is that itCorrect A ) ten ds to discourage new ideas and ways of doing things. In the economic system described in this passage Diaguita Indians have lived in this locality for generations We grow beans, corn and potatoes on the mountain slopes. To irrigate these crops, we still use the channels built centuries ago by our ancestors. We also breed llamas. In our community, the more llamas you own, the richer you are . answers to the basic economic questions would be determined by Correct A ) habit and custom. in all of the followers are characteristics of a command economy EXCEPTCorrect B ) public services are available at little or no cost. In a ____________ economy, a central authority makes around of the WHAT, HOW, and FOR WHOM decisions. Correct B ) command What do we call a way of thinking that compares the cost of an action to its benefits? Correct A ) cost-benefit analysis What is the single largest source of revenue for the federal government? Correct C ) individual income imposees The benefit pr inciple of receipts states that Correct D ) people who benefit from government goods and services should pay taxes according to the benefit they receiveFICA includes taxes to pay for Correct A ) accessible Security and Medicare. Personal individual income tax is a _____________ tax. Correct B ) regressive An exception or oversight in the tax law that allows some people and businesses to avoid paying taxes is called a Correct C ) tax loophole The three criteria for effective taxes are Correct D ) paleness, simplicity, and efficiency A ________ tax paid by corporations on their income. Correct D ) corporate income tax This passage Well cut your taxes is the most repeated campaign promise in the history of American politics.Yet somehow it is still considered visionary, worth a fight. Worth, indeed, a crusade. Why? Its in our blood. Historically, Americans have hated taxes, and not merely because we had to pay them. Weve hated taxes because weve perceived them to be an infringement o n our liberty-and the source of big, powerful, and mischievous government. This was truthful from the beginning. It wasnt unspoiled taxation without representation that bothered us so much. It was taxation. Period. compares the feelings of Americans toward taxation today to those same feelings around the time of the Correct C ) American Revolution.The relative incidence of a tax can more effectively be shifted from the supplier to the consumer if Correct A ) the demand curve is inelastic. The ability-to-pay principle of taxation states that Correct C ) people should be taxed according to their ability to pay. Iowa residents can take solace in knowing that theyll likely function the state with its budget crunch if President Bush cuts federal taxes. Iowas s very muching economy has left state government revenue stagnant, a problem caused by a lack of disbursement by Iowans. Sales-tax receipts have barely bumped up from last form, and its coming back to hit the state budget.In I owa, residents get to deduct their federal income taxes from their state income taxes. So if the federal government saves Iowans $1 billion in income a tax, thats $1 billion that the state will get to tax. According to the passage, how will a cut in federal income taxes help the Iowa state budget crunch? Correct A ) The state can tax more of residents income. Intergovernmental revenues are ecumenically intended for Correct A ) education and public welfare. According to the passage America can celebrate Tax Freedom Day on May 3, 2001, according to the Tax Foundations annual calculation.That means that the nations taxpayers have to work from January 1, 2001, to the 123rd day of the year in the lead earning enough money to pay for government-federal, state, and local-and start spending money on themselves. Individual income taxes represent the largest chemical element of Americans tax bills. what is the meaning of Tax Freedom Day? Correct D ) By that day, you have earned enough to p ay your income taxes for the year. The authority to levy a federal income tax comes from Correct B ) the Sixteenth Amendment. An excise tax is a Correct B ) tax on the manufacture and sale of selected items. The incidence of a taxCorrect B ) refers to those who bear the final burden of taxation. A _____________ tax is tax on tangible and intangible possessions, such as real estate, buildings, furniture, stocks, bonds, and bank accounts. Correct B ) home The three largest sources of revenue for local governments are Correct A ) utility and liquor store income, property tax, and intergovernmental revenues. FICA is Correct D ) tax levied on employers and employees to support social Security and Medicare According to the passage Back in 1940, when the Social Security program was just getting under way, average life apprehension was less than 64 years.The programs de stainers expected that most people would contribute to the program most of their lives and die before collecting a dime in retirement benefits. Today, average life expectancy in the United States is more than 75 years. As life expectancy has soared, birthrates have make upd, leaving fewer and fewer workers to support the ballooning number of retirees. In 1950, the system was solidly supported with 16 workers paying for each retiree today, there are just over three workers per beneficiary. The increase in average life expectancy has created a problem for the Social Security system becauseCorrect B ) more people are collecting retirement benefits. The two broad categories of government spending are Correct B ) the purchase of goods and services and payments to single out groups. Although direct mail and special events are typical fundraising methods, one senator who was challenging an incumbent got the most money from his own personal phone calls to donors. Correct A ) True Transfer payments from the government to individuals or other levels of government might be used for all of the following EXCE PT Correct C ) maintenance of the armed forces. A Value-added tax is CorrectA ) tax placed on the value that manufacturers add at the end of production. Based on this passage Every year at this time, Congress discovers, with a great public show of dismay and indignation, the existence of the American tax code and the agency that administers it, the Internal Revenue Service. There are high-minded calls for abolishing the current tax system and replacing it. Around April 15, Congress likes to pretend that the tax code just sort of appeared or just happened. But the Constitution puts the burden of taxes solely, exclusively and entirely on Congress shoulders.The tax code is the way it is because a majority of Congress wants it that way. Members of Congress probably like to pretend that the tax code just sort of appeared because they Correct B ) dont want voters to associate them with taxes. Leisure and creative pursuits are called Correct D ) nuance The Taxpayer Relief Act of 1997 Co rrect D ) did little to benefit people without children or capital gains. Overall, who benefited most from tax reform in 1997? Correct C ) the top 20 percent of wage and income earners __________ is the part of the economy made up of federal, state, and local governments. CorrectB ) Public sector The flat tax Correct D ) simplifies the tax process. A value-added tax (VAT) is Correct B ) tax on the value added at every stage of the production process The alternative lower limit tax Correct B ) requires people to pay a minimum tax of 20 percent. The VAT is a ______ tax. Correct D ) federal wholly of the following are effects of increased government spending EXCEPT Correct D ) a decrease in competition between the public and private sectors. The flat tax Correct C ) departs from ability-to-pay principle of taxation. All levels of government combined consume about Correct B ) one-third of the nations output.All of the following EXCEPT one are advantages to a value-added tax. Correct B ) it is invisible to consumers All of the following are effects of the federal debt EXCEPT Correct D ) refer rates are lowered. An example of mandatory spending is financing for Correct A ) post payments on the federal debt. The pay-as-you-go provision is Correct D ) requirement that new spending proposals or tax cuts must be offset by reductions elsewhere. Who pays for the maintenance on the state highway linking Tyler, Texas, with Corsicana, Texas? Correct C ) Texas The sequence for the approval of the federal budget is CorrectB ) president to Congress back to president. Based on the facts given in the passage One result of the current Social Security debate has been to concentrate the publics mind on the true economic condition of the elderly. While the top 20% of seniors are relatively copious? almost all of the rest are highly dependent on Social Security. The program provided at least half of the total income of more than 55% of senior citizens and at least 75% of the total income of more than a third. Social Security lifted 11. 4 one trillion million seniors-or nearly half of the 65-and-older tribe-out of poverty, black the elderlys poverty rate from 47. % to 11. 9%. , approximately how many Americans are age 65 or older? Correct C ) slightly under 22. 8 million Of the four categories listed below, which accounts for the largest get along of local expenditures? Correct B ) public utilities Which of the following statements best describes the relationship of the federal deficit to the federal debt? Correct B ) The federal deficit leads to adoption, which adds to the federal debt. According to the passage One result of the current Social Security debate has been to concentrate the publics mind on the true economic condition of the elderly.While the top 20% of seniors are relatively affluent? almost all of the rest are highly dependent on Social Security. The program provided at least half of the total income of more than 55% of senior citizens an d at least 75% of the total income of more than a third. Social Security lifted 11. 4 million seniors-or nearly half of the 65-and-older population-out of poverty, cutting the elderlys poverty rate from 47. 6% to 11. 9%. , about what percentage of the elderly would be living in poverty if the Social Security system did not exist? Correct A ) 47. 6% The United States government accumulated wide deficits during the 1980s due toCorrect C ) a doubling of spending on national defense. All of the following are differences between the federal debt and private debt EXCEPT Correct C ) the federal debt is the total amount of money borrowed from investors. Interest on debt is Correct D ) costs incurred by both state and local governments for borrowing money Which of the following is NOT an example of a local government? Correct C ) neighborhood associations The federal debt is Correct D ) amount borrowed to pay deficit spending budget with n each a surplus or deficit Which of the following i s an example of an entitlement payment?Correct B ) federal money given to a senior citizen as a Social Security payment All of the following are local officials with approval power for spending EXCEPT Correct D ) the tax assessor. Which of the following statements best describes the relationship of the federal deficit to the federal debt? Correct B ) The federal deficit leads to borrowing, which adds to the federal debt. From the choices below, identify when the federal government began significant deficit spending. Correct C ) 1980s Of the four categories listed below, which accounts for the largest amount of state expenditures?Correct D ) higher education Who formulates the federal budget? Correct C ) the president Of the four categories listed below, which accounts for the largest amount of local expenditures? Correct B ) public utilities Based on the passage The Aztec in primaeval America used cacao beans, from which chocolate is made, as money. Prices varied from a few beans f or a piece of fruit to some(prenominal) thousand for an enslaved person. Aztec merchants had to take care when selling expensive items. Payment usually came stored in sacks, and the sacks might contain counterfeit money-bean husks filled with mud. What type of money did the Aztec use? Correct D ) good money Which of the following statements about a sumptuous standard is FALSE? Correct C ) It is easier to expand the money tot. The United States government ended the halcyon standard in Correct B ) 1934. Based on the passage To get its new Sacajawea dollar into circulation, the U. S. Mint has issued more than calciferol million of the flamboyant coins since the end of January, not only to banks, but also to Wal-Mart and Sams club stores. But in what may be the greatest coin trick ever, the dollars have all but vanished.People are making them into jewelry, auctioning them off on eBay, and leaving them under pillows on behalf of the tooth fairy-anything but spending them. The Mint expects Sacajawea to be back in circulation by year-end, when more than a billion of the dollars will have been minted and the novelty, it hopes, will have worn off. Sacajawea dollars have disappeared because many people believe they are Correct A ) worth more as a commodity than as property. According to the passage After the collapse of the Soviet Union in 1990, Russian currency was not trusted. Real money played a fairly small part in Russias economy.Most business was conducted by barter or with IOUs. For example, workers rarely current wages in the form of cash. A bicycle factory outside the city of Perm paid its workers in bicycles To get cash, the workers had to sell their paychecks More often than not, they simply traded the bicycles for the products they want. most business in Russia, at that time, was conducted without currency because Russian currency was not Correct A ) accepted. Greenbacks and United States notes were issued to Correct A ) cabbage money to finance the Civil War. The value of fiat money is Correct D ) faith in the government.These passages in the United States Constitution Article 1, piece 8 The Congress shall have the power To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures To provide for the punishment of counterfeiting the securities and current coin of the United States To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof and in Article 1, Section 10 No State shall coin money hand out bills of credit make anything but gold and silver coin a tender in payment of debts. made which of the following statements true at that time? Correct C ) The government could not print paper money.Which of the following statements about a gold standard is FALSE? Correct C ) It is easier to expand the money supply. The problem with Continental dollars was that Correct A ) so much was printed they became nearly worthless. Money that has an alternative use as an economic good is Correct A ) commodity money. Money functions as all of the following EXCEPT Correct D ) a measure of value. One disadvantage of using gold as a standard for money is Correct D ) paper currency holders could exchange it for gold. What is the origin of the American dollar? Correct B ) the Spanish peso and shillings Money by government decree has no alternative value or use as a commodity is called Correct C ) fiat moneyFiat currency is also known as ________. (hint look at the paper money in your possession. ) Correct A ) legal tender The part of modern money that we can touch consists of Correct B ) federal officialeral Reserve Notes. Local banks in the 1800s that printed too much money were called Correct A ) wildcat banks. ________ is/are the monetary standard under which the basic currency unit is equivalent t o, and can be exchanged for, a specific amount of gold Correct D ) Gold standard To make a difference with the Spanish peso, Benjamin Franklin and Alexander Hamilton divided the dollar into Correct B ) tenths (10 equal pieces). Most stocks in the United States are traded on theCorrect B ) over-the-counter market. In what city was Americas first stock exchange located? Correct B ) Philadelphia To determine Gross National Product, Correct C ) add to gross domestic product all payments received by Americans outside the U. S. and subtract payments made to foreign-owned resources in the U. S. In 2001, the national debt was $5. 1 one million million dollars. When President Obama was inaugurated in January of 2009, the national debt was $10. 6 trillion. Sixteen months later the national debt is Correct A ) $13. 1 trillion dollars. In the Gross Domestic Product defense spending is in which sector? Correct B ) governmenGross Domestic Product is CorrectD ) dollar amount of all final goods an d services produced within a countrys borders in a year. Which is the best measure of the nations income? Correct B ) GNP Which stock exchange the largest electronic screen-based equity securities trading market in the United States. Correct D ) NASDAQ A bull market is a Correct C ) period during which stock market bells move up for several months or years in a row. The Efficient Market Hypothesis argues that Correct A ) stocks are always priced about right and bargains are hard to find. A bear market is a Correct A ) period during which stock market prices move down for several months or years in a row.The great majority of stocks in the United States are traded on Correct C ) the over-the-counter market. The Efficient Market Hypothesis argues that Correct A ) stocks are always priced about right. According to the United States Treasury, the US national debt is the Correct A ) principal amount owed by the US to its lenders, for example, China and Japan A stock transaction that is made immediately at the market price is made in the Correct B ) spot market. The largest sector of the macroeconomy is the Correct D ) consumer sector. The Dow Jones Industrial Average (DJIA) represent what market value of all U. S. stocks on the New York Stock Exchange Correct A ) fifth (20%)Which of the following is the most important aggregate of how a country is doing economically? Correct C ) gross national produce Investors who sign a contract guaranteeing them the option of selling shares of stock at a specified price in the future day have agreed to a Correct D ) put option. In the exemplar GDP = C + I + G + F, the F represents the Correct B ) difference between the dollar value of goods sent abroad and goods purchased from abroad. Since colonial times, the average size of a household in the United States has Correct B ) decreased. Which best describes the movement of the center of population of the United States? Correct C ) east to westBy April 2000, the population of th e United States stood at about 281. 4 million people. This years anticipated census will be _____ million people. Correct D ) 309 The official count of all people in the United States is called Correct D ) the decennial census. A price king is a ______________. Correct C ) a statistical series that can be used to measure changes in prices over time Real GDP is Correct D ) GDP adjusted to remove the distortion of inflation. Life expectancy is the Correct A ) average remaining life span in years for persons who get hold of a given age. Since colonial times, the rate of addition of the United States population has Correct B ) steadily decreased.What is the implicit GDP price deflator? Correct A ) a price index that measures price changes in GDP All of the following factors affect population yield EXCEPT Correct A ) demographers. All of the following statements about real GDP are true EXCEPT Correct C ) real GDP is the same as current GDP. Which of the following is the correct way t o calculate real GDP? Correct B ) Divide current GDP by the implicit GDP price deflator and consequently multiply by 100. The United States lost 600,000 soldiers during World War II and another 37,00 in the Korean War. In the years from 1946 until 1964 there were 76 million babies born. This era has been named the Correct B ) baby boom.The official count of all people in the United States is called Correct D ) the decennial census. Economists know it is important to cut across inflation because it Correct B ) distorts statistics about overall economic performThe mean center of United States population (using the centroid definition) has been calculated for each U. S. Census since 1790. Currently this point is located in Correct D ) Missouri. All of the following factors affect population growth EXCEPT Correct A ) demographers. To construct a price index, all of the following are needed EXCEPT Correct B ) the current inflation rate. Business cycles are Correct A ) nonsystematic upt urns and downturns of real GDP.Real GDP per capita is the preferred measure of economic growth over the long run because Correct B ) prices and the population change over time. This marked the beginning of the large mental picture in 1929 Correct D ) stock market crash The United States experienced almost no growth in real GDP per capita Correct A ) between 1929 and 1939. Which of the following factors affect economic growth? Correct D ) all of the above Which of the following statements about economic growth is FALSE? Correct C ) Economic growth decreases the tax base. Increasing productivity results in Correct A ) increasing economic growth. An econometric model is a CorrectD ) macroeconomic model that uses algebraic equations to describe how the economy behaves. A number of factors are important to economic growth-especially the quantity and quality of the Correct C ) factors of production (A)(An) ___________ is a monthly statistical series that anticipates changes to the real GDP. Correct D ) index of leading indicators The United States experienced almost no growth in real GDP per capita Correct A ) between 1929 and 1939. A period during which real GDP declines for two quarters in a row, or six consecutive months, is call a(n) ___________. It begins when the economy reaches a peak, and ends when the economy reaches a trough. Correct A ) recession The passage A key gauge of future U. S. conomic activity declined 0. 5% last month, as the Sept. 11 terrorist attacks in New York and Washington weakened an already troubled economy. The Conference Board said Monday its index of leading economic indicators fell to 109. 2 in September, the largest one-month decline since January 1996. The index indicates where the overall U. S. economy is headed in the next three to six months. The economy had been seek for several months before the Sept. 11 attacks. Many economists have said they believe that a recession is unavoidable with the new uncertainties jawd by the d isaster. discusses a business fluctuation influenced by Correct D ) external shock.The _____ is a composite index of 11 economic series that move up and down in advance of changes in the overall economy statistical series used to predict business cycle turning points. Correct C ) econometric model Your ________ is the quality of life based on the possession of necessities and luxuries that make life easier. Correct B ) standard of living Increasing productivity results in Correct A ) increasing economic growth. The business cycle since World War II has been characterized by Correct A ) extended expansions alternating with brief recessions. Changes in ____________ expenditures are one cause of business cycles. Correct D ) capital A major feature of a __________ is its ability to increase real per capita output enough to allow people to raise their standard of living.This system also increases peoples free time, allowing them to devote more attention to families, hobbies, and recreat ional activities. Correct C ) free enterprise economy When productivity grows, people produce relatively ______ with the same amount of inputs, and the prices of goods and services tend to stay _______. Correct D ) more, low The change in price level is the _______. Correct B ) an increase in the general price level Prices tend to _______ during expansions and then ________ during recessions. Correct A ) rise faster, slow down To measure the price level, economists select a market basket of goods and then construct a price index such as the Correct B ) consumer price index, producer price index, or implicit GDP.Because there are always some workers who are in the process of changing jobs, there will always be some ____________ unemployment in the economy. Correct D ) frictional According to the passage The nations unemployment rate rose to 4. 5 percent in June as manufacturers continued to suffer heavy job losses and demand for workers in service industries fell to the lowest level in 10 months. The Labor Department reported Friday that the jobless rate rose 0. 1 percentage point from a 4. 4 percent rate in May. The 4. 5 percent level matched the unemployment rate in April with both months representing the highest level the jobless rate has reached in the year-long economic slowdown. what was the highest level that unemployment reached that year? Correct D ) 4. % All of the following are theories regarding the cause of inflation EXCEPT Correct C ) cost-pull. Unemployment that occurs when a fundamental change in the operations of the economy reduces the demand for workers and their skills is called ___________ unemployment. Correct A ) technological The ________ curve is a curve that shows how much the actual distribution of income varies from an equal distribution. Correct B ) Lorenz At the peak of the Great falloff 1 out of ____ were unemployed. Correct A ) 4 A relatively low rate of inflation, usually 1 to 3 percent annually is Correct A ) creeping inflat ion A booming economy. Record-low unemployment.A blizzard of pink slips a note stating that a person has been fired. Whats wrong with this picture? The fact is, even in the best of times hundreds of thousands of people lose their jobs through no fault of their own. You might not get any advance warning, so dont be caught off guard. Have an up-to-date resume and networking system. You want to be able to launch your job search soon after you get the no-count news. What type of unemployment does this passage describe? Correct D ) frictional The unemployment rate understates employment conditions for all of the following reasons EXCEPT Correct A ) some workers are between jobs for one reason or another. Galloping inflation is CorrectB ) intense form of inflation that can go as high as 100 to ccc percent The passage For all the recent talk of cutting taxes, Congress rarely cuts them when the economy is growing robustly, as it is now, and unemployment is low. The worry among economists i s that the extra money in peoples pockets may make an already strong economy too strong, finally stoking inflation after a long period of relatively stable prices. describes ascent inflation as a possible result of Correct B ) a booming economy. According to the demand-pull theory, inflation is caused by Correct D ) consumers. expert employment is reached when the employment rate drops below _____ percent. Correct B ) 4. 5 Changes in technology and changes in consumer tastes can cause Correct B ) morphological unemployment.According to the demand-pull theory, inflation is caused by Correct D ) all of the above. Unemployment that is directly related to swings in the business cycle is Correct C ) cyclical unemployment According to the passage The Bank of Amsterdam was established in Holland in 1609. At that time, Amsterdam was a center of world trade. More than 340 different kinds of silver coins and about 500 types of gold coins circulated throughout the city. Dutch merchants had little idea how much these coins were worth, so the Bank of Amsterdam was set up under a charter from the city to standardize the currency. The Bank of Amsterdam operated as Hollands central bank for more than 200 years.After making a series of bad loans, however, it failed and went out of business in 1819-almost 100 years before Americas central bank was founded. why did the Bank of Amsterdam stop operating? Correct C ) It made bad loans. actions by the federal official Reserve System to expand or contract the money supply in order to affect the cost and availability of credit Correct D ) monetary policy A portion of the deposits in the form of coins and currency that banks and other depository institutions are required to hold are called ________ reserves. Correct D ) legal The quantity theory of money holds that excessive increases in the monetary supply Correct C ) lead to inflation. plyeral Reserve Chairman Alan Greenspan distinct seven years ago to publicize the central bank s interest-rate moves once they were made. Now, each meeting of the Fed-whether the central bank changes rates or not-triggers a chorus of crying analysis of what it means for the economy and the financial markets. Which function of the Federal Reserve is the subject of this passage? Correct C ) regulating the money supply The Fed remains largely independent from politics for all of the following reasons EXCEPT Correct D ) the president and Congress appoint new members to vacant lay on the Board of Governors. he dilemma faced by the Fed when considering monetary policy is the choice between Correct A ) inflation and interest rates.Based on this quotation Not too many years ago, Federal Reserve officials conducted monetary policy as if they were members of the Politburo plotting behind the thick walls of the Kremlin. the author believed that the Federal Reserve had been too Correct D ) secretive. When command economies make the transition to capitalism, they face all of the follow ing challenges except Correct A ) the Gosplan. Correct B ) debts and obligations. The Fed has defined different categories of money, M1 and M2, according to the moneys Correct B ) function. Repeated short-run attempts to keep interest rates low result in a _________ of the money supply, making inflation _________. Correct A ) long-term expansion, worse e FED has defined M2 as Correct A ) represents the components of the money supply that most closely conform to moneys role as a. store of value. Which letter designations mark Fed actions that will expand the money supply? Correct B ) Lower reserve requirement, Buy bonds, Lower discount rate. The ___________ is the interest the Fed charges on loans to financial institutions. Correct D ) discount rate Assets are Correct A ) properties, possessions, and claims on others. n the long run, changes in the supply of money affect the ____________. Correct C ) general level of prices Which letter designations mark Fed actions that will contrac t the money supply? CorrectC ) Raise reserve requirement, Sell bonds, Raise discount rate For a bank to be profitable, how much of a spread must it maintain between the rate it charges on loans and the rate it pays for borrowed funds? Correct B ) 2-3 percent A balance sheet shows all of the following EXCEPT Correct A ) bank assets on the right of the T account. All of the following are tools of monetary policy EXCEPT Correct C ) tight money controls. The dilemma faced by the Fed when considering monetary policy is the choice between Correct A ) inflation and interest rates. The price of credit is the ______. Correct A ) rate of interest At times the Fed monetizes the debt in order to CorrectB ) keep interest rates from rising. In the short run, monetary policy affects Correct C ) interest rates and available credit. The social costs of economic asymmetry include all of the following EXCEPT Correct A ) stagflation. Those who favor supply-side policies would tend to support the gover nment playing Correct B ) a reduced role in the economy. Monetarism is described as Correct D ) emphasis on the role of money and its growth as a key to controlling inflation and unemployment. Deregulation is most closely associated with Correct D ) supply-side economics. Economic instability wastes all of the following EXCEPT Correct C ) tax revenues.According to bum Maynard Keyness theory of the multiplier-accelerator effect, a decline in investment spending will Correct B ) lead to a downward spiral of the economy. ____________ policies are federal policies designed to increase or decrease total demand in the economy by shifting the aggregate demand curve to the right or to the left. Correct D ) Demand-side conglobation demand will increase Correct D ) if consumers save less and spend more. Unlike demand-side economics, supply-side economics Correct A ) advocates reduced government interest in business. The unofficial statistic that is the sum of monthly inflation and the unem ployment rate same as discomfort index is Correct B ) misery indexAccording to Keynesian economics, only the _________ sector is big enough to step in and offset changes in investment sector spending. Correct B ) consumer The ____________ is the sum of the monthly inflation and unemployment rates. Correct A ) misery index Which is an example of the uncertainty caused by economic instability? Correct B ) A consumer delays a purchase. Social costs are Correct D ) price of economic instability in human terms. The _____________ like unemployment insurance and Social Security protect consumers and the economy in general if economic conditions worsen. Correct A ) automatic stabilizers Which of the following statements is FALSE? Correct B ) Economic instability is at the root of all social problems. John Maynard Keynes CorrectD ) introduced his theories in 1936. The social costs of economic instability include all of the following EXCEPT Correct A ) stagflation. Economists measure the cost of economic instability with Correct D ) both a and b Wage price controls are Correct B ) regulations making it illegal for businesses to give workers raises or to raise prices without the explicit permission of the government. Stagflation is ________. Correct B ) period of stagnant growth combined with inflation The use of government spending and taxing to influence economic activity is called _ Correct B ) fiscal A period of stagnant growth combined with inflation is known as ____________. CorrectB ) stagnation The basis for worldwide trade stems from Correct B ) the differences in production costs from one country to another. The Council of Economic Advisers Correct C ) advises the president on economic developments and strategy. The three-member group that reports on economic developments and pop the questions strategies to the president is called the Correct A ) Council of Economic Advisers. Which is the best description of the role of the Council of Economic Advisers? Corre ct A ) report economic developments and propose strategies The nations monetary policy Correct A ) often comes under attack from politicians. The United States imports CorrectC ) billions of dollars in products each year. Which of the following is proof that international trade is unspoiled? Correct C ) the fact that free nations choose to trade vThe three-member group that reports on economic developments to the president is called the Correct B ) Council of Economic Advisers. A country has a(n) ___________ whenever it is able to produce more of a given product than another. Correct A ) absolute advantage ____________ economic policies grew out of the unemployment and other problems that occurred during the Great Depression of the 1930s. Correct D ) Demand-side All of the following describe economists EXCEPT CorrectB ) economists are sharply divided into competing schools of thought with little overlap of ideas and beliefs. If a country wants to trade a product with another countr y, it must have a(n) ___________ in the production of that product. Correct D ) comparative advantage Alpha can produce either 10 apples or 3 oranges. Beta can produce either 12 apples or 3 oranges. Correct C ) Beta has an absolute advantage in the production of apples. Imports are Correct B ) goods and services that one country buys from other countries. The ability of a country to produce a product with greater output per unit of input is Correct A ) absolute advantage. . A country has a comparative advantage when it can