Question 1

Since 1995, federal regulations have

Accepted Answer

A)  tightened mortgage lending standards and therefore made it difficult to obtain a loan to purchase a house. 
B)  increased the down payment housing buyers are required to make in order to obtain a mortgage loan. 
C)  loosened lending standards and made it possible for many buyers to purchase a house with little or no down payment. 
D)  required investment banks to maintain more capital against their holdings of mortgage loans. 
A)  tightened mortgage lending standards and therefore made it difficult to obtain a loan to purchase a house. 
B)  increased the down payment housing buyers are required to make in order to obtain a mortgage loan. 
C)  loosened lending standards and made it possible for many buyers to purchase a house with little or no down payment. 
D)  required investment banks to maintain more capital against their holdings of mortgage loans.

Question 2

Individual transferable quotas (ITQs) have been shown to

Accepted Answer

A)  increase the value of fisheries but reduce the safety of fishers as the season is shortened. 
B)  end overfishing by making the use of efficient technology illegal. 
C)  increase the safety of fishing but not the value to consumers of the product. 
D)  increase the value to consumers of the product and raise the price received by fishers. 
A)  increase the value of fisheries but reduce the safety of fishers as the season is shortened. 
B)  end overfishing by making the use of efficient technology illegal. 
C)  increase the safety of fishing but not the value to consumers of the product. 
D)  increase the value to consumers of the product and raise the price received by fishers.

Question 3

Government regulation is

Accepted Answer

A)  subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B)  the only reliable way to improve environmental quality. 
C)  not subject to political concerns when it comes to environmental quality. 
D)  the most economically efficient way to reduce greenhouse gases. 
A)  subject to the same problems of lack of information and lack of incentives for economic efficiency as centrally planned economies. 
B)  the only reliable way to improve environmental quality. 
C)  not subject to political concerns when it comes to environmental quality. 
D)  the most economically efficient way to reduce greenhouse gases.

Question 4

Economic theory indicates that, the size of government will be

Accepted Answer

A)  unrelated to economic growth. 
B)  negatively related to economic growth at all possible sizes of government. 
C)  positively related to economic growth at all possible sizes of government. 
D)  positively related to economic growth at small levels of government but is negatively related to economic growth as government becomes larger and larger. 
A)  unrelated to economic growth. 
B)  negatively related to economic growth at all possible sizes of government. 
C)  positively related to economic growth at all possible sizes of government. 
D)  positively related to economic growth at small levels of government but is negatively related to economic growth as government becomes larger and larger.

Question 5

Fannie Mae and Freddie Mac's dominance of the secondary mortgage market during 1995-2008 encouraged mortgage originators to

Accepted Answer

A)  extend only 30-year, fixed-rate mortgages. 
B)  require higher down payments in order to obtain a home mortgage. 
C)  loosen lending standards as long as the mortgages were acceptable to Fannie Mae and Freddie Mac. 
D)  scrutinize the credit-worthiness of borrowers more carefully. 
A)  extend only 30-year, fixed-rate mortgages. 
B)  require higher down payments in order to obtain a home mortgage. 
C)  loosen lending standards as long as the mortgages were acceptable to Fannie Mae and Freddie Mac. 
D)  scrutinize the credit-worthiness of borrowers more carefully.

Question 6

Expansion in the size of government relative to the market sector will eventually retard economic growth because

Accepted Answer

A)  larger governments will be more involved in activities for which they are ill-suited. 
B)  the higher taxes to finance a bigger government will lead to larger and larger deadweight losses from taxation. 
C)  the incentive to engage in innovative activities and respond to change is weaker in government than in the market sector. 
D)  all of the above are correct. 
A)  larger governments will be more involved in activities for which they are ill-suited. 
B)  the higher taxes to finance a bigger government will lead to larger and larger deadweight losses from taxation. 
C)  the incentive to engage in innovative activities and respond to change is weaker in government than in the market sector. 
D)  all of the above are correct.

Question 7

In 2007, third-party payments accounted for approximately what percent of medical-care expenditures in the United States?

Accepted Answer

A)  25 percent 
B)  46 percent 
C)  65 percent 
D)  86 percent 
A)  25 percent 
B)  46 percent 
C)  65 percent 
D)  86 percent

Question 8

(I) Current Social Security retirees typically receive real benefits that are equal to three or four times the amount of their contributions into the system. (II) Current young workers can expect to receive real benefits less than their contributions into the system.

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 9

The strong demand for housing, rising housing prices, and a construction boom from 2000 to 2005 were a result of

Accepted Answer

A)  market forces that were eventually cut short by the stock market crash of 2008. 
B)  policy changes that had positive initial effects, but negative long-term effects. 
C)  tightened mortgage lending standards that reduced the risks of obtaining a home mortgage. 
D)  the rising interest rates of that period, which increased the demand for housing. 
A)  market forces that were eventually cut short by the stock market crash of 2008. 
B)  policy changes that had positive initial effects, but negative long-term effects. 
C)  tightened mortgage lending standards that reduced the risks of obtaining a home mortgage. 
D)  the rising interest rates of that period, which increased the demand for housing.

Question 10

Since 1802, the average annual compound return for stock holdings, adjusted for inflation, has been approximately

Accepted Answer

A)  2 percent. 
B)  7 percent. 
C)  15 percent. 
D)  30 percent. 
A)  2 percent. 
B)  7 percent. 
C)  15 percent. 
D)  30 percent.

Question 11

Most economists believe the severity and duration of the Great Depression was primarily the result of

Accepted Answer

A)  the large budget deficits of the federal government. 
B)  the reduction in tariffs and the influx of foreign imports during the early 1930s. 
C)  the excessive use of credit cards. 
D)  a sharp contraction in the money supply. 
A)  the large budget deficits of the federal government. 
B)  the reduction in tariffs and the influx of foreign imports during the early 1930s. 
C)  the excessive use of credit cards. 
D)  a sharp contraction in the money supply.

Question 12

Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,

Accepted Answer

A)  not result in penalties to the polluter, who has a right to use his property as he wishes. 
B)  make the polluter liable for any damages done to the forest. 
C)  be ignored under the law, in favor of the polluting factory owner. 
D)  never occur. 
A)  not result in penalties to the polluter, who has a right to use his property as he wishes. 
B)  make the polluter liable for any damages done to the forest. 
C)  be ignored under the law, in favor of the polluting factory owner. 
D)  never occur.

Question 13

In the years ahead we can expect the F/M earnings ratio to

Accepted Answer

A)  remain constant. 
B)  continue to increase. 
C)  continue to increase until 2020, when the 'baby boom" generation retires" and then level off. 
D)  decline. 
A)  remain constant. 
B)  continue to increase. 
C)  continue to increase until 2020, when the 'baby boom" generation retires" and then level off. 
D)  decline.

Question 14

When a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that the

Accepted Answer

A)  demand for the good will decline. 
B)  consumers of the good will have less and less incentive to economize on its use. 
C)  suppliers of the good will have a stronger incentive to provide the good at low prices. 
D)  prices of the good will tend to decline with the passage of time. 
A)  demand for the good will decline. 
B)  consumers of the good will have less and less incentive to economize on its use. 
C)  suppliers of the good will have a stronger incentive to provide the good at low prices. 
D)  prices of the good will tend to decline with the passage of time.

Question 15

Which of the following is the best example of a health-care service with a large public good component?

Accepted Answer

A)  a hair-growing treatment provided to a twenty-five year-old single man 
B)  heart bypass surgery provided to an employee and paid for by employer-funded insurance 
C)  a vaccine that reduces the incidence of a communicable disease 
D)  a hip replacement provided to a senior citizen 
A)  a hair-growing treatment provided to a twenty-five year-old single man 
B)  heart bypass surgery provided to an employee and paid for by employer-funded insurance 
C)  a vaccine that reduces the incidence of a communicable disease 
D)  a hip replacement provided to a senior citizen

Question 16

Which of the following is true?

Accepted Answer

A)  The achievement scores of African-American students tend to be higher after one or two years in voucher programs. 
B)  Most parents of students in charter schools and voucher programs indicate they are highly satisfied with their children's schools. 
C)  Targeted voucher programs tend to decrease racial segregation in schools in highly segregated communities. 
D)  All of the above are true. 
A)  The achievement scores of African-American students tend to be higher after one or two years in voucher programs. 
B)  Most parents of students in charter schools and voucher programs indicate they are highly satisfied with their children's schools. 
C)  Targeted voucher programs tend to decrease racial segregation in schools in highly segregated communities. 
D)  All of the above are true.

Question 17

Which of the following is true regarding U.S. federal government expenditures?

Accepted Answer

A)  National defense has fallen from 52.2 percent of the federal budget in 1960 to 21 percent in 2008. 
B)  Federal expenditures on income transfers and health care have risen from 21.5 percent of the budget in 1960 to 57.7 percent in 2008. 
C)  Corrected for inflation, the average person today pays more federal taxes in one week than the average person in 1900 paid in an entire year. 
D)  All of the above are true. 
A)  National defense has fallen from 52.2 percent of the federal budget in 1960 to 21 percent in 2008. 
B)  Federal expenditures on income transfers and health care have risen from 21.5 percent of the budget in 1960 to 57.7 percent in 2008. 
C)  Corrected for inflation, the average person today pays more federal taxes in one week than the average person in 1900 paid in an entire year. 
D)  All of the above are true.

Question 18

Since 1980, the female/male annual earnings ratio of full-time workers has been ____, while the labor force participation rate of women has been ____ during this same period.

Accepted Answer

A)  rising; declining 
B)  rising; increasing 
C)  falling; increasing 
D)  falling; declining 
A)  rising; declining 
B)  rising; increasing 
C)  falling; increasing 
D)  falling; declining

Question 19

Which of the following is true?

Accepted Answer

A)  Labor participation tends to increase as spousal earnings increase. 
B)  Social Security works to the disadvantage of low-wage workers due to their shorter life expectancy. 
C)  Low-wage workers derive a higher rate of return from their Social Security taxes than high-wage workers. 
D)  High-wage workers generally begin full-time work at younger ages than low-wage workers. 
A)  Labor participation tends to increase as spousal earnings increase. 
B)  Social Security works to the disadvantage of low-wage workers due to their shorter life expectancy. 
C)  Low-wage workers derive a higher rate of return from their Social Security taxes than high-wage workers. 
D)  High-wage workers generally begin full-time work at younger ages than low-wage workers.

Question 20

Which of the following is true?

Accepted Answer

A)  Managed equity funds generally outperform indexed equity mutual funds. 
B)  Managed equity funds merely hold stocks in the same proportion they are represented in a broad stock market index such as the Standard & Poor's 500. 
C)  Indexed equity funds generally have lower management and operating costs than managed funds. 
D)  Indexed equity funds generally engage in more stock trading than managed funds. 
A)  Managed equity funds generally outperform indexed equity mutual funds. 
B)  Managed equity funds merely hold stocks in the same proportion they are represented in a broad stock market index such as the Standard & Poor's 500. 
C)  Indexed equity funds generally have lower management and operating costs than managed funds. 
D)  Indexed equity funds generally engage in more stock trading than managed funds.

Since 1995, federal regulations have

Individual transferable quotas (ITQs) have been shown to

Government regulation is

Economic theory indicates that, the size of government will be

Fannie Mae and Freddie Mac's dominance of the secondary mortgage market during 1995-2008 encouraged mortgage originators to

Expansion in the size of government relative to the market sector will eventually retard economic growth because

In 2007, third-party payments accounted for approximately what percent of medical-care expenditures in the United States?

(I) Current Social Security retirees typically receive real benefits that are equal to three or four times the amount of their contributions into the system. (II) Current young workers can expect to receive real benefits less than their contributions into the system.

The strong demand for housing, rising housing prices, and a construction boom from 2000 to 2005 were a result of

Since 1802, the average annual compound return for stock holdings, adjusted for inflation, has been approximately

Most economists believe the severity and duration of the Great Depression was primarily the result of

Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,

In the years ahead we can expect the F/M earnings ratio to

When a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that the

Which of the following is the best example of a health-care service with a large public good component?

Which of the following is true?

Which of the following is true regarding U.S. federal government expenditures?

Since 1980, the female/male annual earnings ratio of full-time workers has been , while the labor force participation rate of women has been during this same period.

Which of the following is true?

Which of the following is true?

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

Since 1995, federal regulations have

Individual transferable quotas (ITQs) have been shown to

Government regulation is

Economic theory indicates that, the size of government will be

Fannie Mae and Freddie Mac's dominance of the secondary mortgage market during 1995-2008 encouraged mortgage originators to

Expansion in the size of government relative to the market sector will eventually retard economic growth because

In 2007, third-party payments accounted for approximately what percent of medical-care expenditures in the United States?

(I) Current Social Security retirees typically receive real benefits that are equal to three or four times the amount of their contributions into the system. (II) Current young workers can expect to receive real benefits less than their contributions into the system.

The strong demand for housing, rising housing prices, and a construction boom from 2000 to 2005 were a result of

Since 1802, the average annual compound return for stock holdings, adjusted for inflation, has been approximately

Most economists believe the severity and duration of the Great Depression was primarily the result of

Pollution from a privately owned factory that seriously harms a privately owned forest will, if property rights are strongly protected,

In the years ahead we can expect the F/M earnings ratio to

When a third party pays a larger and larger share of the purchasing price of a good, economic theory indicates that the

Which of the following is the best example of a health-care service with a large public good component?

Which of the following is true?

Which of the following is true regarding U.S. federal government expenditures?

Since 1980, the female/male annual earnings ratio of full-time workers has been ____, while the labor force participation rate of women has been ____ during this same period.

Which of the following is true?

Which of the following is true?

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

Since 1980, the female/male annual earnings ratio of full-time workers has been , while the labor force participation rate of women has been during this same period.