Question 1

Which of the following is true of stocks?

Accepted Answer

A)  Stock ownership is risky because the investor can never be sure what return they will earn or what the value of their stock holdings will be in the future. 
B)  The riskiness of stocks is one reason why their average rate of return has been higher than investments like bonds that guarantee a specified nominal amount in the future. 
C)  Both a and b are true. 
D)  Neither a nor b is true. 
A)  Stock ownership is risky because the investor can never be sure what return they will earn or what the value of their stock holdings will be in the future. 
B)  The riskiness of stocks is one reason why their average rate of return has been higher than investments like bonds that guarantee a specified nominal amount in the future. 
C)  Both a and b are true. 
D)  Neither a nor b is true.

Question 2

Most married women who choose to work can expect to receive

Accepted Answer

A)  substantially higher Social Security benefits than if they had not worked and thus not paid into the system. 
B)  substantially lower Social Security benefits than if they had not worked and thus not paid into the system. 
C)  approximately the same Social Security benefits than if they had not worked and thus not paid into the system. 
D)  benefits based on their husbands' salary plus 50 percent of their own salary. 
A)  substantially higher Social Security benefits than if they had not worked and thus not paid into the system. 
B)  substantially lower Social Security benefits than if they had not worked and thus not paid into the system. 
C)  approximately the same Social Security benefits than if they had not worked and thus not paid into the system. 
D)  benefits based on their husbands' salary plus 50 percent of their own salary.

Question 3

According to the random walk theory, which of the following is true?

Accepted Answer

A)  Stock prices reflect all available information about factors that affect stock prices. 
B)  Future movements of stock prices are unpredictable. 
C)  Changes in stock prices are driven by surprise occurrences. 
D)  All of the above are true. 
A)  Stock prices reflect all available information about factors that affect stock prices. 
B)  Future movements of stock prices are unpredictable. 
C)  Changes in stock prices are driven by surprise occurrences. 
D)  All of the above are true.

Question 4

Which of the following is true?

Accepted Answer

A)  The impact of charter schools on student achievement is inconclusive. 
B)  Most parents of students in charter schools indicate they are dissatisfied with their children's schools. 
C)  Charter schools are more racially segregated than traditional public schools. 
D)  Charter schools tend to reduce the level of competition between schools. 
A)  The impact of charter schools on student achievement is inconclusive. 
B)  Most parents of students in charter schools indicate they are dissatisfied with their children's schools. 
C)  Charter schools are more racially segregated than traditional public schools. 
D)  Charter schools tend to reduce the level of competition between schools.

Question 5

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

Accepted Answer

A)  there are no close substitutes for the unionized workers. 
B)  the domestic producers of the good produced by the unionized workers face weak competition from foreign suppliers of the good. 
C)  the cost of employing the unionized workers is a large part of the total cost of the product that they produce. 
D)  the demand for the product produced by the unionized workers is highly inelastic. 
A)  there are no close substitutes for the unionized workers. 
B)  the domestic producers of the good produced by the unionized workers face weak competition from foreign suppliers of the good. 
C)  the cost of employing the unionized workers is a large part of the total cost of the product that they produce. 
D)  the demand for the product produced by the unionized workers is highly inelastic.

Question 6

(I) Because married women are permitted to receive benefits based on either their own earnings or 50 percent of the benefits earned by their spouse, whichever is greater, the payroll tax takes a big chunk of the earnings of many working women without providing any significant additional benefits to them. (II) Because blacks have a shorter life expectancy, they are economically disadvantaged by Social Security relative to whites and Hispanics.

Accepted Answer

A)  I is true; II is false. 
B)  I is false; II is true. 
C)  Both I and II are false. 
D)  Both I and II are true. 
A)  I is true; II is false. 
B)  I is false; II is true. 
C)  Both I and II are false. 
D)  Both I and II are true.

Question 7

When the current Social Security surpluses end and the bonds in the trust funds are reduced in order to make payments to retirees, the financing for the redemption of the trust fund bonds will come from

Accepted Answer

A)  higher taxes or more government borrowing. 
B)  the surplus funds deposited in government banking accounts. 
C)  equity capital being liquidated. 
D)  the sale of private equities and securities that the government has been purchasing with the funds. 
A)  higher taxes or more government borrowing. 
B)  the surplus funds deposited in government banking accounts. 
C)  equity capital being liquidated. 
D)  the sale of private equities and securities that the government has been purchasing with the funds.

Question 8

At the federal level, which of the following accounts for almost half of all revenue?

Accepted Answer

A)  corporate income taxes 
B)  retail sales taxes 
C)  personal income taxes 
D)  cigarette taxes 
A)  corporate income taxes 
B)  retail sales taxes 
C)  personal income taxes 
D)  cigarette taxes

Question 9

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for

Accepted Answer

A)  less than 20 percent of federal spending. 
B)  about 40 percent of federal spending. 
C)  approximately 50 percent of federal spending. 
D)  more than 85 percent of federal spending. 
A)  less than 20 percent of federal spending. 
B)  about 40 percent of federal spending. 
C)  approximately 50 percent of federal spending. 
D)  more than 85 percent of federal spending.

Question 10

The share of the personal income tax paid by the bottom half of earners

Accepted Answer

A)  rose to an all-time high in 2008. 
B)  was substantially higher in 2008 than during the 1960s and 1970s. 
C)  was substantially lower in 2008 than during the 1960s and 1970s. 
D)  has been relatively constant during the last four decades. 
A)  rose to an all-time high in 2008. 
B)  was substantially higher in 2008 than during the 1960s and 1970s. 
C)  was substantially lower in 2008 than during the 1960s and 1970s. 
D)  has been relatively constant during the last four decades.

Question 11

The current market value of a stock option contract to purchase 1,000 shares of IBM stock at a price of $100 that can be exercised five years from now would

Accepted Answer

A)  increase if the expected future price of IBM stock rose. 
B)  increase if the expected future price of IBM stock fell. 
C)  decrease if the expected future price of IBM stock rose. 
D)  remain unchanged regardless of the expected future price of IBM stock. 
A)  increase if the expected future price of IBM stock rose. 
B)  increase if the expected future price of IBM stock fell. 
C)  decrease if the expected future price of IBM stock rose. 
D)  remain unchanged regardless of the expected future price of IBM stock.

Question 12

Which of the following states had the lowest incidence of union membership as a percent of all wage and salary workers in 2010?

Accepted Answer

A)  New York, Hawaii, and Alaska 
B)  South Carolina, North Carolina, and Arkansas 
C)  Illinois, Michigan, and Ohio 
D)  Nevada, Hawaii, and Alaska 
A)  New York, Hawaii, and Alaska 
B)  South Carolina, North Carolina, and Arkansas 
C)  Illinois, Michigan, and Ohio 
D)  Nevada, Hawaii, and Alaska

Question 13

During the last two or three decades, the educational and career choices of women have become

Accepted Answer

A)  more like those of men, and the earnings of women have declined relative to those of men. 
B)  more like those of men, and the earnings of women have increased relative to those of men. 
C)  less like those of men, and the earnings of women have increased relative to those of men. 
D)  less like those of men, and the earnings of women have declined relative to those of men. 
A)  more like those of men, and the earnings of women have declined relative to those of men. 
B)  more like those of men, and the earnings of women have increased relative to those of men. 
C)  less like those of men, and the earnings of women have increased relative to those of men. 
D)  less like those of men, and the earnings of women have declined relative to those of men.

Question 14

As government becomes larger and larger as a share of the economy, economic growth is likely to decline because

Accepted Answer

A)  taxes are reduced to levels that are inconsistent with economic efficiency. 
B)  governments are involved in many activities for which they are ill-suited. 
C)  tax-transfer activities are reduced and sometimes virtually eliminated. 
D)  governments do not spend enough on the provision of key public goods like education. 
A)  taxes are reduced to levels that are inconsistent with economic efficiency. 
B)  governments are involved in many activities for which they are ill-suited. 
C)  tax-transfer activities are reduced and sometimes virtually eliminated. 
D)  governments do not spend enough on the provision of key public goods like education.

Question 15

"Increasing competition between schools will tend to lower both the cost and quality of education." Is this statement true or false?

Accepted Answer

False; increasing competition will tend

Question 16

Real (adjusted for inflation) federal spending per person in the United States

Accepted Answer

A)  has increased by approximately 10 percent per decade during the last 225 years. 
B)  increased more rapidly during the nineteenth century than during the twentieth century. 
C)  in 2010 was approximately 80 times the level of 1916. 
D)  increased rapidly during the first half of the twentieth century but has changed very little since 1950. 
A)  has increased by approximately 10 percent per decade during the last 225 years. 
B)  increased more rapidly during the nineteenth century than during the twentieth century. 
C)  in 2010 was approximately 80 times the level of 1916. 
D)  increased rapidly during the first half of the twentieth century but has changed very little since 1950.

Question 17

Which of the following is true?

Accepted Answer

A)  The proportion of college degrees earned by women has been virtually unchanged during the last four decades. 
B)  There was a substantial increase in the earnings of women relative to men in the 1960s and 1970s following the passage of legislation prohibiting employment discrimination against women. 
C)  The number of women preparing for careers as professionals has declined during the last two decades. 
D)  In 2010, 57 percent of those completing college degrees were women. 
A)  The proportion of college degrees earned by women has been virtually unchanged during the last four decades. 
B)  There was a substantial increase in the earnings of women relative to men in the 1960s and 1970s following the passage of legislation prohibiting employment discrimination against women. 
C)  The number of women preparing for careers as professionals has declined during the last two decades. 
D)  In 2010, 57 percent of those completing college degrees were women.

Question 18

Which of the following contributed to the soaring housing prices during 2002-2005?

Accepted Answer

A)  the Fed's low-interest rate policy 
B)  regulations that reduced the required down payment and other lending standards for home mortgages 
C)  the increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks 
D)  all of the above 
A)  the Fed's low-interest rate policy 
B)  regulations that reduced the required down payment and other lending standards for home mortgages 
C)  the increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks 
D)  all of the above

Question 19

Which of the following is most likely to have the strongest demand for environmental quality?

Accepted Answer

A)  countries with water pollution problems 
B)  poor countries 
C)  countries with air pollution problems 
D)  wealthy countries 
A)  countries with water pollution problems 
B)  poor countries 
C)  countries with air pollution problems 
D)  wealthy countries

Question 20

Compared to a system based on customer choice and competition, the current structure of the educational system tends to ____ education costs and ____ the quality of education.

Accepted Answer

A)  lower; lower 
B)  lower; raise 
C)  raise; lower 
D)  raise; raise 
A)  lower; lower 
B)  lower; raise 
C)  raise; lower 
D)  raise; raise

Which of the following is true of stocks?

Most married women who choose to work can expect to receive

According to the random walk theory, which of the following is true?

Which of the following is true?

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

When the current Social Security surpluses end and the bonds in the trust funds are reduced in order to make payments to retirees, the financing for the redemption of the trust fund bonds will come from

At the federal level, which of the following accounts for almost half of all revenue?

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for

The share of the personal income tax paid by the bottom half of earners

The current market value of a stock option contract to purchase 1,000 shares of IBM stock at a price of $100 that can be exercised five years from now would

Which of the following states had the lowest incidence of union membership as a percent of all wage and salary workers in 2010?

During the last two or three decades, the educational and career choices of women have become

As government becomes larger and larger as a share of the economy, economic growth is likely to decline because

"Increasing competition between schools will tend to lower both the cost and quality of education." Is this statement true or false?

Real (adjusted for inflation) federal spending per person in the United States

Which of the following is true?

Which of the following contributed to the soaring housing prices during 2002-2005?

Which of the following is most likely to have the strongest demand for environmental quality?

Compared to a system based on customer choice and competition, the current structure of the educational system tends to education costs and the quality of education.

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Exam 16: Applying the Basics: Special Topics in Economics

Which of the following is true of stocks?

Most married women who choose to work can expect to receive

According to the random walk theory, which of the following is true?

Which of the following is true?

The demand for unionized labor will generally be more elastic, and it will be more difficult for the union to achieve above-equilibrium wages when

When the current Social Security surpluses end and the bonds in the trust funds are reduced in order to make payments to retirees, the financing for the redemption of the trust fund bonds will come from

At the federal level, which of the following accounts for almost half of all revenue?

In 2010, federal expenditures on income transfers, health care, national defense, and interest on the national debt accounted for

The share of the personal income tax paid by the bottom half of earners

The current market value of a stock option contract to purchase 1,000 shares of IBM stock at a price of $100 that can be exercised five years from now would

Which of the following states had the lowest incidence of union membership as a percent of all wage and salary workers in 2010?

During the last two or three decades, the educational and career choices of women have become

As government becomes larger and larger as a share of the economy, economic growth is likely to decline because

"Increasing competition between schools will tend to lower both the cost and quality of education." Is this statement true or false?

Real (adjusted for inflation) federal spending per person in the United States

Which of the following is true?

Which of the following contributed to the soaring housing prices during 2002-2005?

Which of the following is most likely to have the strongest demand for environmental quality?

Compared to a system based on customer choice and competition, the current structure of the educational system tends to ____ education costs and ____ the quality of education.

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Consumer Choice and Elasticity

Costs and the Supply of Goods

Price Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Price-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, Productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Filters

Compared to a system based on customer choice and competition, the current structure of the educational system tends to education costs and the quality of education.