Question 1

What percentage of Americans age 18 and over paid personal income taxes in 2009?

Accepted Answer

A)  92 percent 
B)  75 percent 
C)  51 percent 
D)  33 percent 
A)  92 percent 
B)  75 percent 
C)  51 percent 
D)  33 percent

Question 2

In 1961, ____ percent of college degrees were earned by women.

Accepted Answer

A)  19 
B)  29 
C)  39 
D)  51 
A)  19 
B)  29 
C)  39 
D)  51

Question 3

During the 1970s, the price/earnings ratio of stocks in the S&P 500 was relatively low. This low P/E ratio was

Accepted Answer

A)  surprising because the inflation rate was high during the 1970s. 
B)  not surprising because interest rates were low during the inflationary 1970s. 
C)  not surprising because interest rates were high during the inflationary 1970s. 
D)  surprising because the inflation rate was low during the 1970s. 
A)  surprising because the inflation rate was high during the 1970s. 
B)  not surprising because interest rates were low during the inflationary 1970s. 
C)  not surprising because interest rates were high during the inflationary 1970s. 
D)  surprising because the inflation rate was low during the 1970s.

Question 4

If elementary and secondary schooling were produced entirely by private firms and purchased by parents with their own money,

Accepted Answer

A)  parents would have a strong incentive to search out those schools offering their children the best education at the best value. 
B)  schools would better cater to the desires of parents and supply education more efficiently. 
C)  schools would face much stronger competition from one another that would tend to increase the quality of schooling. 
D)  all of the above would occur. 
A)  parents would have a strong incentive to search out those schools offering their children the best education at the best value. 
B)  schools would better cater to the desires of parents and supply education more efficiently. 
C)  schools would face much stronger competition from one another that would tend to increase the quality of schooling. 
D)  all of the above would occur.

Question 5

When the number of families with someone employed by the government is added to those receiving income from transfer programs, the share of American families receiving income from the government is

Accepted Answer

A)  less than 20 percent 
B)  approximately 50 percent of the total 
C)  approximately 62 percent of the total 
D)  a little more than 75 percent of the total 
A)  less than 20 percent 
B)  approximately 50 percent of the total 
C)  approximately 62 percent of the total 
D)  a little more than 75 percent of the total

Question 6

The 1995 modifications to the Community Reinvestment Act

Accepted Answer

A)  imposed numeric goals for loans extended to low-income and minority groups that were difficult for many banks to meet without reducing loan standards. 
B)  reduced the incentive of banks to extend loans to low-income and minority groups. 
C)  encouraged low-income and minority housing purchasers to make larger down payments so they would have more equity in their houses. 
D)  made it more difficult for low-income and minority groups to obtain conventional loans. 
A)  imposed numeric goals for loans extended to low-income and minority groups that were difficult for many banks to meet without reducing loan standards. 
B)  reduced the incentive of banks to extend loans to low-income and minority groups. 
C)  encouraged low-income and minority housing purchasers to make larger down payments so they would have more equity in their houses. 
D)  made it more difficult for low-income and minority groups to obtain conventional loans.

Question 7

Since the demand for a narrowly defined product class (Fords, for example) is more elastic than the demand for a broadly defined product class (all automobiles), a union will be better able to raise the wages of its members without causing a reduction in their employment when

Accepted Answer

A)  it can organize an entire industry, rather than just selective firms within the industry. 
B)  it concentrates its organizational efforts on a single firm, ignoring the rest of the industry. 
C)  the demand for the product is highly elastic. 
D)  there are many good substitutes for union labor. 
A)  it can organize an entire industry, rather than just selective firms within the industry. 
B)  it concentrates its organizational efforts on a single firm, ignoring the rest of the industry. 
C)  the demand for the product is highly elastic. 
D)  there are many good substitutes for union labor.

Question 8

During the 2008-2009 school year, approximately how many students attended a charter school?

Accepted Answer

A)  100,000 
B)  600,000 
C)  1,400,000 
D)  2,100,000 
A)  100,000 
B)  600,000 
C)  1,400,000 
D)  2,100,000

Question 9

Which of the following will likely have the strongest demand for large expenditures on environmental quality?

Accepted Answer

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

Question 10

The overall federal tax structure is

Accepted Answer

A)  regressive because the average tax rate of those with low incomes is higher than the rate imposed on those with higher incomes. 
B)  progressive because the average tax rate of those with high incomes is greater than the rate imposed on those with lower incomes. 
C)  flat because the average tax rate is approximately constant across all income brackets. 
D)  progressive for income levels up to approximately $100,000 but regressive for income levels above this figure. 
A)  regressive because the average tax rate of those with low incomes is higher than the rate imposed on those with higher incomes. 
B)  progressive because the average tax rate of those with high incomes is greater than the rate imposed on those with lower incomes. 
C)  flat because the average tax rate is approximately constant across all income brackets. 
D)  progressive for income levels up to approximately $100,000 but regressive for income levels above this figure.

Question 11

When a good or service is supplied under competitive conditions, economic analysis indicates that with the passage of time, the quality of the product will

Accepted Answer

A)  tend to improve, but its real price will generally rise. 
B)  tend to improve, and its real price will generally fall. 
C)  decline, and its real price will generally rise. 
D)  decline, and its real price will fall. 
A)  tend to improve, but its real price will generally rise. 
B)  tend to improve, and its real price will generally fall. 
C)  decline, and its real price will generally rise. 
D)  decline, and its real price will fall.

Question 12

Demographic conditions

Accepted Answer

A)  were much less favorable for the Social Security system in 1950 than is currently the case. 
B)  are currently unfavorable because the number of retirees is growing rapidly as the result of the high birth rate in the United States during 1930-1945. 
C)  will be less favorable for the Social Security system once the baby boom generation begins to retire around 2011. 
D)  don't affect the financial status of the Social Security system because it is based on the same principles as private insurance programs. 
A)  were much less favorable for the Social Security system in 1950 than is currently the case. 
B)  are currently unfavorable because the number of retirees is growing rapidly as the result of the high birth rate in the United States during 1930-1945. 
C)  will be less favorable for the Social Security system once the baby boom generation begins to retire around 2011. 
D)  don't affect the financial status of the Social Security system because it is based on the same principles as private insurance programs.

Question 13

If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur?

Accepted Answer

A)  U.S. employment will increase. 
B)  The unemployment rate of the United States will decline. 
C)  U.S. exports will increase because foreigners will want to buy more from U.S. producers. 
D)  U.S. exports will decline because foreigners will be earning fewer of the dollars needed to purchase goods and services from Americans. 
A)  U.S. employment will increase. 
B)  The unemployment rate of the United States will decline. 
C)  U.S. exports will increase because foreigners will want to buy more from U.S. producers. 
D)  U.S. exports will decline because foreigners will be earning fewer of the dollars needed to purchase goods and services from Americans.

Question 14

A tax dollar collected from an individual or a business costs the private economy more than a dollar because

Accepted Answer

A)  the administration and enforcement of the tax system is costly. 
B)  record keeping and the other elements of compliance cost are sizable. 
C)  the taxes will eliminate some productive exchanges (and cause people to undertake some counterproductive activities). 
D)  All of the above are correct. 
A)  the administration and enforcement of the tax system is costly. 
B)  record keeping and the other elements of compliance cost are sizable. 
C)  the taxes will eliminate some productive exchanges (and cause people to undertake some counterproductive activities). 
D)  All of the above are correct.

Question 15

Between 1960 and 2010, the share of federal spending allocated to national defense

Accepted Answer

A)  declined sharply, while the share allocated to health care increased substantially. 
B)  rose sharply, while the share allocated to health care declined substantially. 
C)  was relatively constant, while the share allocated to health care declined modestly. 
D)  declined modestly, while the share allocated to health care was relatively constant. 
A)  declined sharply, while the share allocated to health care increased substantially. 
B)  rose sharply, while the share allocated to health care declined substantially. 
C)  was relatively constant, while the share allocated to health care declined modestly. 
D)  declined modestly, while the share allocated to health care was relatively constant.

Question 16

When the federal government owns parks that are funded by tax dollars,

Accepted Answer

A)  park managers receive full information about visitor desires and make decisions accordingly. 
B)  the same incentive structure exists for public park managers as private park managers. 
C)  park managers devote much time and effort to satisfying political desires instead of visitor desires. 
D)  park managers will be less likely to mismanage the park. 
A)  park managers receive full information about visitor desires and make decisions accordingly. 
B)  the same incentive structure exists for public park managers as private park managers. 
C)  park managers devote much time and effort to satisfying political desires instead of visitor desires. 
D)  park managers will be less likely to mismanage the park.

Question 17

Which of the following is an example of how incentive structures contributed to the collapse of investment banks?

Accepted Answer

A)  The bonus structure of most executives was tied to long-term profitability. 
B)  The ratings agencies were paid attractive fees by investment banks seeking high ratings for their securities. 
C)  Mortgage-backed securities were closely scrutinized in order to minimize risk and obtain higher ratings. 
D)  Despite SEC regulations, investment banks kept leverage ratios low in order to increase profits. 
A)  The bonus structure of most executives was tied to long-term profitability. 
B)  The ratings agencies were paid attractive fees by investment banks seeking high ratings for their securities. 
C)  Mortgage-backed securities were closely scrutinized in order to minimize risk and obtain higher ratings. 
D)  Despite SEC regulations, investment banks kept leverage ratios low in order to increase profits.

Question 18

Which of the following statements is true for the U.S. economy?

Accepted Answer

A)  Higher wages in the unionized sectors of the economy push up wages in the nonunion sectors as well. 
B)  Inflation tends to accelerate when the proportion of the labor force that is unionized increases. 
C)  Union workers currently receive wages that are 21 percent higher, on average, than similar nonunion workers. 
D)  When we compare similar union and nonunion workers, we find virtually no difference in the wages they receive. 
A)  Higher wages in the unionized sectors of the economy push up wages in the nonunion sectors as well. 
B)  Inflation tends to accelerate when the proportion of the labor force that is unionized increases. 
C)  Union workers currently receive wages that are 21 percent higher, on average, than similar nonunion workers. 
D)  When we compare similar union and nonunion workers, we find virtually no difference in the wages they receive.

Question 19

Doomsday projections have generally

Accepted Answer

A)  been correct. 
B)  been incorrect, but with better technology and the ability to predict the future, these forecasts have become much more accurate in the last few decades. 
C)  been inconsistent. Some projections came true, others failed. 
D)  been wrong. 
A)  been correct. 
B)  been incorrect, but with better technology and the ability to predict the future, these forecasts have become much more accurate in the last few decades. 
C)  been inconsistent. Some projections came true, others failed. 
D)  been wrong.

Question 20

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

Accepted Answer

A)  of flaws in information flows between countries. 
B)  government agencies have an incentive to keep reserves secret. 
C)  of future improvements in technology and higher future prices. 
D)  scientists have not been able to use the latest techniques to estimate reserves in less developed countries. 
A)  of flaws in information flows between countries. 
B)  government agencies have an incentive to keep reserves secret. 
C)  of future improvements in technology and higher future prices. 
D)  scientists have not been able to use the latest techniques to estimate reserves in less developed countries.

What percentage of Americans age 18 and over paid personal income taxes in 2009?

In 1961, ____ percent of college degrees were earned by women.

During the 1970s, the price/earnings ratio of stocks in the S&P 500 was relatively low. This low P/E ratio was

If elementary and secondary schooling were produced entirely by private firms and purchased by parents with their own money,

When the number of families with someone employed by the government is added to those receiving income from transfer programs, the share of American families receiving income from the government is

The 1995 modifications to the Community Reinvestment Act

Since the demand for a narrowly defined product class (Fords, for example) is more elastic than the demand for a broadly defined product class (all automobiles), a union will be better able to raise the wages of its members without causing a reduction in their employment when

During the 2008-2009 school year, approximately how many students attended a charter school?

Which of the following will likely have the strongest demand for large expenditures on environmental quality?

The overall federal tax structure is

When a good or service is supplied under competitive conditions, economic analysis indicates that with the passage of time, the quality of the product will

Demographic conditions

If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur?

A tax dollar collected from an individual or a business costs the private economy more than a dollar because

Between 1960 and 2010, the share of federal spending allocated to national defense

When the federal government owns parks that are funded by tax dollars,

Which of the following is an example of how incentive structures contributed to the collapse of investment banks?

Which of the following statements is true for the U.S. economy?

Doomsday projections have generally

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

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

What percentage of Americans age 18 and over paid personal income taxes in 2009?

In 1961, ____ percent of college degrees were earned by women.

During the 1970s, the price/earnings ratio of stocks in the S&P 500 was relatively low. This low P/E ratio was

If elementary and secondary schooling were produced entirely by private firms and purchased by parents with their own money,

When the number of families with someone employed by the government is added to those receiving income from transfer programs, the share of American families receiving income from the government is

The 1995 modifications to the Community Reinvestment Act

Since the demand for a narrowly defined product class (Fords, for example) is more elastic than the demand for a broadly defined product class (all automobiles), a union will be better able to raise the wages of its members without causing a reduction in their employment when

During the 2008-2009 school year, approximately how many students attended a charter school?

Which of the following will likely have the strongest demand for large expenditures on environmental quality?

The overall federal tax structure is

When a good or service is supplied under competitive conditions, economic analysis indicates that with the passage of time, the quality of the product will

Demographic conditions

If higher tariffs, such as those enacted by the Smoot-Hawley trade bill, reduce the imports of the United States, which of the following will be most likely to occur?

A tax dollar collected from an individual or a business costs the private economy more than a dollar because

Between 1960 and 2010, the share of federal spending allocated to national defense

When the federal government owns parks that are funded by tax dollars,

Which of the following is an example of how incentive structures contributed to the collapse of investment banks?

Which of the following statements is true for the U.S. economy?

Doomsday projections have generally

Proved reserves are likely to underestimate the total quantity of the resource in the ground because

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