ECONOMICS PRETEST

1
ECONOMICS PRETEST

• (No grade taken- merely for your self-assessment)

2

• WHAT IS ECONOMICS?
• DEFINITION?

3
Which is always present in an economic system?

• (a) central planning
• (b) strikes
• (c) scarce resources
• (d) market decision-making

4
Which of the following taxes is mostly based on
the ability to pay?

• A) property tax
• B)sales tax
• C) social security tax
• D) income tax

5
Caveat emptor means

• A) the publics right to obtain land
• B) let the buyer beware
• C) citizens right to own property
• D) noninterference by government
• E) special concessions to business

6
Who controls the money in circulation?

• A) Treasury
• B) Federal Deposit of Insurance Corporation
• C) Federal Reserve
• D) Banks

7
An underdeveloped country is basically

• A) industrial in nature
• B) receiving a favorable balance of trade
• C) automated
• D) agrarian in nature

8
The total value of goods and services produced in
a given year is called

• A) national income
• B) national wealth
• C) consumer debt
• D) gross domestic product

9
Federal government expenditures in the market are
the greatest in which of the following areas?

• A) defense
• B) debt
• C) welfare
• d) foreign aid

10
Supply and demand in the market determine

• A) utility
• B) cost
• C)production
• D) price

11
Name the three basic economic systems in the
world.

• A)_____________
• B)_____________
• C)_____________

12
The opportunity cost of a new public high school
is the

• A) money cost of hiring teachers for the new
  school
• B) cost of constructing the new school at a later
  date
• C) change in the annual tax rate to pay for the
  new school
• D)other goods and services that must be given up
  to build the new school

13
Assuming little or no government interference in
the market, which of the following is the
lifeblood (internal engine) of the market?

• A) competition
• B) price
• C) stock market
• D) regulation

14
Which government agency regulates antitrust
formations?

• A) Supreme Court
• B) Congress
• C) Federal Trade Commission
• D) State Courts

15
FICA which is reported in your paycheck stands
for what deduction?

• _____________________________
• Federal Income Compensation Act.. (also called
  payroll taxes)
• FICA taxes are paid into the Old Age Survivors
  and Disability (OASDI) and Medicare trust
  accounts. For 2007, you pay 6.2 of your first
  97,500 income to OASDI. Your employer also pays
  out of its pocket the same percentage. This
  results in a combined contribution equal to 12.4
  of the amount of your income. If you are
  self-employed, you contribute 12.4 of your own
  income.

16
What is monetary policy?

• _________________________

17
What is fiscal policy?

• ___________________________

18
What does CPI measure and what does the acronym
stand for?

• __________________________

19
Name the three basic factors of production

• A________________
• B________________
• C_________________

20
One example of a capital good would be

• A) bank deposits
• B) roofing machine
• C) coal
• D) ink

21
Of the following, which is the most general cause
of low individual incomes in the U.S.?

• A) lack of valuable productive services to sell
• B) discrimination against nonunion workers
• C) unwillingness to work
• D) progressive tax rates

22
To promote economic growth, a country must

• A) increase investment
• B) Increase consumption
• C) Use the market system
• D) Use central economic planning

23
A government budget deficit exists when

• A) government spending exceeds tax revenues
• B) government spending is increased
• C) the national debt is decreasing
• D) taxes are reduced

24
Ceteris paribus means

• A) who cares
• B) the money is inflated
• C) all other things being equal
• D) the money should be equally distributed

25
Who wrote the Wealth of Nations?

• _________________________

26
What type of business formation is the most
common in the U.S.?

• _________________________

27
What constitutes a favorable balance of trade?

• __________________________
• Do we have one now?

28
Which security pays interest?

• A)stock
• B) bond

29
Name the four market models in the U.S.

• A)________________
• B)________________
• C)________________
• D)________________

30
How does the First Amendment begin?

• _____________________________
• Why is that important to know?

31
Name your Five Civil Liberties

• A)__________________
• B)__________________
• C)__________________
• D)__________________
• E)__________________

32
What three questions does every economy ask?

• A)_________________
• B)_________________
• C)_________________

33
What is the motivating force of a free enterprise
economy?

• ____________________________

34

• What does the acronym GDP stand for?
• What are the component parts of GDP?

35
With time, a decrease in the dollar price of
foreign currency would cause (i.e. dollar is
depreciated.)

• The nations imports to increase and the exports
  to decrease.
• The nations exports to increase and the imports
  to decrease.
• Both the imports and exports to decrease
• Both the imports and exports to increase

36
What are the two evils of every economy?
37

• WELCOME TO ECON 101
• DOES ANY OF THIS STUFF AFFECT YOU?
• There can be no real freedom in the presence of
  economic insecurity.
• Chester Bowles