Question 1

Which of the following is true?

Accepted Answer

A)  The achievement scores of African-American students tend to be lower after one to two years in voucher programs. 
B)  Most parents of students in charter schools and voucher programs indicate they are dissatisfied with their children's schools. 
C)  Voucher programs targeted at low- and middle-income families will tend to decrease racial integration in highly segregated communities. 
D)  The impact of charter schools on student achievement is inconclusive. 
A)  The achievement scores of African-American students tend to be lower after one to two years in voucher programs. 
B)  Most parents of students in charter schools and voucher programs indicate they are dissatisfied with their children's schools. 
C)  Voucher programs targeted at low- and middle-income families will tend to decrease racial integration in highly segregated communities. 
D)  The impact of charter schools on student achievement is inconclusive.

Question 2

Which of the following would encourage consumers to economize on health-care expenditures and producers to supply health-care services more efficiently?

Accepted Answer

A)  an increase in out-of-pocket expenditures by health-care consumers 
B)  decreased reliance on personal Medical Savings Accounts and health-care expenditures from the accounts 
C)  decreased reliance on the purchase of catastrophic health insurance coverage and less reliance on insurance with first-dollar coverage and small co-payments 
D)  the establishment of a national health-care system that would provide coverage to all people 
A)  an increase in out-of-pocket expenditures by health-care consumers 
B)  decreased reliance on personal Medical Savings Accounts and health-care expenditures from the accounts 
C)  decreased reliance on the purchase of catastrophic health insurance coverage and less reliance on insurance with first-dollar coverage and small co-payments 
D)  the establishment of a national health-care system that would provide coverage to all people

Question 3

Which of the following is true?

Accepted Answer

A)  The current achievement scores of American students are lower than during the late 1960s. 
B)  Real spending per student in American public elementary and secondary schools has changed little since the 1960s. 
C)  The achievement scores of American students are higher than those of students in most developed countries. 
D)  Real spending per student in American public elementary and secondary schools has declined since the 1960s. 
A)  The current achievement scores of American students are lower than during the late 1960s. 
B)  Real spending per student in American public elementary and secondary schools has changed little since the 1960s. 
C)  The achievement scores of American students are higher than those of students in most developed countries. 
D)  Real spending per student in American public elementary and secondary schools has declined since the 1960s.

Question 4

Which of the following is fully tax deductible (it is either subtracted or excluded from taxable income) under the current tax system of the United States?

Accepted Answer

A)  out-of-pocket medical expenses 
B)  healthcare insurance purchased through one's employer 
C)  healthcare insurance purchased directly by an individual or family 
D)  all of the above 
A)  out-of-pocket medical expenses 
B)  healthcare insurance purchased through one's employer 
C)  healthcare insurance purchased directly by an individual or family 
D)  all of the above

Question 5

Adam Smith stated, " The man of system is apt to be very wise in his own conceit. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board." Which is true of this statement?

Accepted Answer

A)  Keynes would tend to agree with the statement; Heyek would disagree with it. 
B)  Keynes would tend to disagree with the statement; Hayek would agree with it. 
C)  As the rap video indicates, both Keynes and Hayek strongly agree with this statement. 
D)  As the rap video indicates, both Keynes and Hayek strongly disagree with this statement. 
A)  Keynes would tend to agree with the statement; Heyek would disagree with it. 
B)  Keynes would tend to disagree with the statement; Hayek would agree with it. 
C)  As the rap video indicates, both Keynes and Hayek strongly agree with this statement. 
D)  As the rap video indicates, both Keynes and Hayek strongly disagree with this statement.

Question 6

Union membership has fluctuated during the last several decades. Which of the following statements best describes the effect of unions on the share of total output allocated to labor?

Accepted Answer

A)  The share of output going to labor has been virtually constant, even though union membership as a share of the labor force has fluctuated. 
B)  The share of total output going to labor has followed the same pattern as the business cycle in recent years. 
C)  The share of total output going to labor rose as union membership rose from 1945 to 1960 and fell as union membership declined during the 1960 through 2000 period. 
D)  The share of total output going to labor has increased substantially, even though during the last several decades union membership has declined. 
A)  The share of output going to labor has been virtually constant, even though union membership as a share of the labor force has fluctuated. 
B)  The share of total output going to labor has followed the same pattern as the business cycle in recent years. 
C)  The share of total output going to labor rose as union membership rose from 1945 to 1960 and fell as union membership declined during the 1960 through 2000 period. 
D)  The share of total output going to labor has increased substantially, even though during the last several decades union membership has declined.

Question 7

Generally, the demand for energy in the long run will be

Accepted Answer

A)  approximately equal in elasticity to the demand for energy in the short run. 
B)  considerably less elastic than in the short run. 
C)  considerably more elastic than in the short run. 
D)  perfectly inelastic because we must have energy to survive. 
A)  approximately equal in elasticity to the demand for energy in the short run. 
B)  considerably less elastic than in the short run. 
C)  considerably more elastic than in the short run. 
D)  perfectly inelastic because we must have energy to survive.

Question 8

Which of the following best explains why the Social Security system is expected to face financial difficulties in the near future?

Accepted Answer

A)  Too much Social Security revenue was invested in the private sector rather than in government bonds. 
B)  The federal government does not pay interest on the money it borrows from the Social Security system. 
C)  The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off. 
D)  The number of workers paying into the system is expected to decline relative to the number of retirees collecting benefits. 
A)  Too much Social Security revenue was invested in the private sector rather than in government bonds. 
B)  The federal government does not pay interest on the money it borrows from the Social Security system. 
C)  The funds in the Social Security trust fund were invested in high-risk ventures that failed to pay off. 
D)  The number of workers paying into the system is expected to decline relative to the number of retirees collecting benefits.

Question 9

Investors are often willing to pay positive prices for shares of firms that have never earned a profit because the investors

Accepted Answer

A)  do not know the firms have never earned a profit. 
B)  expect the firms to have positive net earnings in the future. 
C)  expect that interest rates will rise in the future. 
D)  expect that higher rates of inflation will push stock prices higher in the future. 
A)  do not know the firms have never earned a profit. 
B)  expect the firms to have positive net earnings in the future. 
C)  expect that interest rates will rise in the future. 
D)  expect that higher rates of inflation will push stock prices higher in the future.

Question 10

Which of the following is a risk that investors undertake when purchasing stocks?

Accepted Answer

A)  An individual stock can rise and fall unpredictably. 
B)  Nearly all stocks in the stock market may rise or fall together, when expectations about the entire economy change. 
C)  Both a and b are true. 
D)  Neither a nor b is true. 
A)  An individual stock can rise and fall unpredictably. 
B)  Nearly all stocks in the stock market may rise or fall together, when expectations about the entire economy change. 
C)  Both a and b are true. 
D)  Neither a nor b is true.

Question 11

Which of the following statements is true?

Accepted Answer

A)  The share of income going to labor has increased during periods when union membership has increased as a proportion of the U.S. labor force. 
B)  Inflation in the United States has tended to accelerate as the proportion of the U.S. labor force that is unionized has increased. 
C)  Higher wages in the unionized sectors of an economy will also push up wages in the nonunion sectors. 
D)  High real wages cannot be achieved and sustained without increases in output per worker hour. 
A)  The share of income going to labor has increased during periods when union membership has increased as a proportion of the U.S. labor force. 
B)  Inflation in the United States has tended to accelerate as the proportion of the U.S. labor force that is unionized has increased. 
C)  Higher wages in the unionized sectors of an economy will also push up wages in the nonunion sectors. 
D)  High real wages cannot be achieved and sustained without increases in output per worker hour.

Question 12

During the 1980s and 1990s, the Federal Reserve's monetary policy focused primarily on

Accepted Answer

A)  keeping short-term interest rates low in order to stimulate real output and economic growth. 
B)  a variety of factors, such as unemployment and real GDP, resulting in variable inflation rates throughout this period. 
C)  keeping inflation low and the general price level relatively stable. 
D)  monetary expansion in order to reduce unemployment. 
A)  keeping short-term interest rates low in order to stimulate real output and economic growth. 
B)  a variety of factors, such as unemployment and real GDP, resulting in variable inflation rates throughout this period. 
C)  keeping inflation low and the general price level relatively stable. 
D)  monetary expansion in order to reduce unemployment.

Question 13

Based on the experience of the Great Depression and the New Deal, which one of the following strategies would be most likely to stimulate recovery from a serious economic recession?

Accepted Answer

A)  increase trade restrictions and tariffs to save jobs and enhance tax revenue 
B)  a reduction in the money supply in order to strengthen the dollar and combat inflation 
C)  keep taxes low in order to stimulate production and minimize the decline in personal and business income 
D)  institute frequent policy changes in order to search for and find the policy combination that would be most effective 
A)  increase trade restrictions and tariffs to save jobs and enhance tax revenue 
B)  a reduction in the money supply in order to strengthen the dollar and combat inflation 
C)  keep taxes low in order to stimulate production and minimize the decline in personal and business income 
D)  institute frequent policy changes in order to search for and find the policy combination that would be most effective

Question 14

When a park is funded by visitors, but not by taxpayers in general,

Accepted Answer

A)  there will be too few parks because most people simply will not pay to use a park. 
B)  visitors will be better served because poor service would lead to reductions in revenues. 
C)  maintenance in the park will suffer because budgets will decline. 
D)  we cannot predict what will happen because park funding by visitors has not been tried before. 
A)  there will be too few parks because most people simply will not pay to use a park. 
B)  visitors will be better served because poor service would lead to reductions in revenues. 
C)  maintenance in the park will suffer because budgets will decline. 
D)  we cannot predict what will happen because park funding by visitors has not been tried before.

Question 15

As the proportion of women preparing for careers as professionals increases,

Accepted Answer

A)  their years of work experience will become more similar to men. 
B)  the female/male earnings ratio will rise. 
C)  their level of human capital will become more similar to men. 
D)  all of the above. 
A)  their years of work experience will become more similar to men. 
B)  the female/male earnings ratio will rise. 
C)  their level of human capital will become more similar to men. 
D)  all of the above.

Question 16

The Social Security system of the United States is based on the pay-as-you-go principle. This indicates that funding of the benefits paid to current retirees comes primarily from

Accepted Answer

A)  the income generated by the system's ownership of stock. 
B)  the tax payments of current workers. 
C)  the funds that current retirees paid into their personal savings accounts during their working years. 
D)  money created by the Federal Reserve system. 
A)  the income generated by the system's ownership of stock. 
B)  the tax payments of current workers. 
C)  the funds that current retirees paid into their personal savings accounts during their working years. 
D)  money created by the Federal Reserve system.

Question 17

When interest payments on home mortgages and home equity loans are tax deductible,

Accepted Answer

A)  households will keep other forms of debt separate from their home mortgage. 
B)  households will shift other forms of debt to their home mortgage. 
C)  households are likely to increase the amount of equity in their home. 
D)  the overall amount of household debt is likely to decrease in relation to household income. 
A)  households will keep other forms of debt separate from their home mortgage. 
B)  households will shift other forms of debt to their home mortgage. 
C)  households are likely to increase the amount of equity in their home. 
D)  the overall amount of household debt is likely to decrease in relation to household income.

Question 18

Which of the following is most likely to result from a rising household debt/income ratio?

Accepted Answer

A)  Household income will rise rapidly. 
B)  Household consumption will fall as a share of income. 
C)  Households will be in a better position to deal with unexpected events that force major adjustments. 
D)  A larger share of household income will be required to meet interest payments on debt. 
A)  Household income will rise rapidly. 
B)  Household consumption will fall as a share of income. 
C)  Households will be in a better position to deal with unexpected events that force major adjustments. 
D)  A larger share of household income will be required to meet interest payments on debt.

Question 19

Which of the following is true?

Accepted Answer

A)  The earnings differential between men and women who never married is considerably smaller than the differential between married men and married women. 
B)  After adjusting for education, age, language, and location, the earnings of women are almost identical with the earnings of men. 
C)  Between 1980 and 2000, the female/male annual earnings ratio of full-time workers was virtually unchanged. 
D)  The hourly earnings of women were approximately 60 percent of their male counterparts in 2009. 
A)  The earnings differential between men and women who never married is considerably smaller than the differential between married men and married women. 
B)  After adjusting for education, age, language, and location, the earnings of women are almost identical with the earnings of men. 
C)  Between 1980 and 2000, the female/male annual earnings ratio of full-time workers was virtually unchanged. 
D)  The hourly earnings of women were approximately 60 percent of their male counterparts in 2009.

Question 20

The Social Security Trust Fund

Accepted Answer

A)  will provide a stream of future revenue for the federal government. 
B)  is a "pot" of money set aside for the payment of future benefits. 
C)  is a net asset of the U.S. Treasury worth approximately $2 trillion. 
D)  is of zero asset value to the federal government. 
A)  will provide a stream of future revenue for the federal government. 
B)  is a "pot" of money set aside for the payment of future benefits. 
C)  is a net asset of the U.S. Treasury worth approximately $2 trillion. 
D)  is of zero asset value to the federal government.

Which of the following is true?

Which of the following would encourage consumers to economize on health-care expenditures and producers to supply health-care services more efficiently?

Which of the following is true?

Which of the following is fully tax deductible (it is either subtracted or excluded from taxable income) under the current tax system of the United States?

Adam Smith stated, " The man of system is apt to be very wise in his own conceit. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board." Which is true of this statement?

Union membership has fluctuated during the last several decades. Which of the following statements best describes the effect of unions on the share of total output allocated to labor?

Generally, the demand for energy in the long run will be

Which of the following best explains why the Social Security system is expected to face financial difficulties in the near future?

Investors are often willing to pay positive prices for shares of firms that have never earned a profit because the investors

Which of the following is a risk that investors undertake when purchasing stocks?

Which of the following statements is true?

During the 1980s and 1990s, the Federal Reserve's monetary policy focused primarily on

Based on the experience of the Great Depression and the New Deal, which one of the following strategies would be most likely to stimulate recovery from a serious economic recession?

When a park is funded by visitors, but not by taxpayers in general,

As the proportion of women preparing for careers as professionals increases,

The Social Security system of the United States is based on the pay-as-you-go principle. This indicates that funding of the benefits paid to current retirees comes primarily from

When interest payments on home mortgages and home equity loans are tax deductible,

Which of the following is most likely to result from a rising household debt/income ratio?

Which of the following is true?

The Social Security Trust Fund

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?

Which of the following would encourage consumers to economize on health-care expenditures and producers to supply health-care services more efficiently?

Which of the following is true?

Which of the following is fully tax deductible (it is either subtracted or excluded from taxable income) under the current tax system of the United States?

Adam Smith stated, " The man of system is apt to be very wise in his own conceit. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board." Which is true of this statement?

Union membership has fluctuated during the last several decades. Which of the following statements best describes the effect of unions on the share of total output allocated to labor?

Generally, the demand for energy in the long run will be

Which of the following best explains why the Social Security system is expected to face financial difficulties in the near future?

Investors are often willing to pay positive prices for shares of firms that have never earned a profit because the investors

Which of the following is a risk that investors undertake when purchasing stocks?

Which of the following statements is true?

During the 1980s and 1990s, the Federal Reserve's monetary policy focused primarily on

Based on the experience of the Great Depression and the New Deal, which one of the following strategies would be most likely to stimulate recovery from a serious economic recession?

When a park is funded by visitors, but not by taxpayers in general,

As the proportion of women preparing for careers as professionals increases,

The Social Security system of the United States is based on the pay-as-you-go principle. This indicates that funding of the benefits paid to current retirees comes primarily from

When interest payments on home mortgages and home equity loans are tax deductible,

Which of the following is most likely to result from a rising household debt/income ratio?

Which of the following is true?

The Social Security Trust Fund

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