QUESTION Which of the following is NOT considered a drawback of socialism? A) high taxes B) “brain drain” C) income inequality D) government deficits E) less job creation ANSWER Answer: C Explanation: C) Redistribution of wealth under socialism results in less social inequality and poverty.
Date: September 3rd, 2020
QUESTION Which element of economics focuses on the “demand” side? A) product development B) production C) consumption D) distribution E) marketing ANSWER Answer: C Explanation: C) Buyers, or consumers, demand products and services.
Date: September 3rd, 2020
QUESTION Securitization is a new financial vehicle developed by bankers in the early 2000s to distribute risks and increase earnings during the housing bubble. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Securitization was developed in 1977. It distributes risks by packaging loans together into mortgage-backed securities sold to many […]
Date: September 3rd, 2020
QUESTION In today’s economic system, what has become an increasingly important issue in the area of resource development? A) capital B) human resources C) entrepreneurship D) knowledge E) natural resources ANSWER Answer: D Explanation: D) With the growth of information technology in business, knowledge has become a crucial production factor to gain competitive advantage.
Date: September 3rd, 2020
QUESTION What happens when a product is scarce? A) Demand declines to zero. B) Sellers can charge more for it. C) Sellers must charge less for it. D) Buyers will expect to pay less for it. E) Factors of production are meeting demand. ANSWER Answer: B Explanation: B) Because demand is higher for a […]
Date: September 3rd, 2020
QUESTION Which field of economic study focuses on factors of production? A) macroeconomics B) microeconomics C) entrepreneurship D) resource development E) central planning ANSWER Answer: D Explanation: D) Factors of production are the means for developing goods and services, which is the focus of resource development.
Date: September 3rd, 2020
QUESTION Which of the following is a government strategy to remove money from the general economy? A) lower taxes B) borrow money C) increase funds available to banks D) raise taxes E) lower interest rates ANSWER Answer: D Explanation: D) Raising taxes takes money out of the hands of consumers and businesses.
Date: September 3rd, 2020
QUESTION Some governments develop five-year plans that map out allocations for economic resources over that period of time. What type of economy would be most likely to utilize such plans? A) communist B) socialist C) capitalist D) free-market E) mixed ANSWER Answer: A Explanation: A) Five-year plans are a common product of central planning […]
Date: September 3rd, 2020
QUESTION In economic terms, demand is defined as the quantity of products that people are able and willing to buy at various prices at a given time. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Scarcity of a product plays a role in demand.
Date: September 3rd, 2020
QUESTION Which of the following would be studied by microeconomists? A) price setting by the Middle East oil cartel B) sales of movie tickets vs. home theater systems C) U.S. consumer sentiment figures D) valuation of the Chinese currency E) financial health of eurozone countries ANSWER Answer: B Explanation: B) Microeconomics studies individual economic […]
Date: September 3rd, 2020
