Question 1

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Accepted Answer

A) are considered to be still-developing countries. 
B) are the major trade partners of the U.S. 
C) are considered as underdeveloped economies. 
D) have highly interdependent economies. 
E) are considered highly-developed countries. 
A) are considered to be still-developing countries. 
B) are the major trade partners of the U.S. 
C) are considered as underdeveloped economies. 
D) have highly interdependent economies. 
E) are considered highly-developed countries. A

Question 2

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Empirical evidence on the U.S. economy suggests that household spending and income have an inverse relationship.

Accepted Answer

A) True 
 B)False  False

Question 3

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following statements about transfer payments is true?

Accepted Answer

A) Transfer payments are not included in total government expenditures. 
B) Transfer payments involve the international remittance of funds. 
C) Transfer payments refer to the transfer of money by the commercial banks to the people. 
D) Transfer payments are made by the government to taxpayers. 
E) Transfer payments are made when governments purchase goods and services. 
A) Transfer payments are not included in total government expenditures. 
B) Transfer payments involve the international remittance of funds. 
C) Transfer payments refer to the transfer of money by the commercial banks to the people. 
D) Transfer payments are made by the government to taxpayers. 
E) Transfer payments are made when governments purchase goods and services. D

Question 4

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Total government spending in the U.S. economy was around _____ of the GDP in the financial year 2010.

Accepted Answer

A) 5 percent 
B) 36 percent 
C) 25 percent 
D) 44 percent 
E) 16 percent 
A) 5 percent 
B) 36 percent 
C) 25 percent 
D) 44 percent 
E) 16 percent

Question 5

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-If total U.S. trade consists of $10 billion in electronics imports from Japan and $9 billion in automobile exports to Germany, then the U.S. net export account will be negative.

Accepted Answer

A) True 
 B)False

Question 6

Identify the international organization that makes loans to developing countries.

Accepted Answer

A) The World Bank 
B) The Federal Reserve 
C) The World Trade Organization 
D) The Industrial Development Board 
E) The Bank of England 
A) The World Bank 
B) The Federal Reserve 
C) The World Trade Organization 
D) The Industrial Development Board 
E) The Bank of England

Question 7

The term "import" refers to:

Accepted Answer

A) a purchase of goods or services from another country. 
B) a business transaction between two or more domestic firms. 
C) a sale of goods or services to another nation. 
D) a tax on foreign merchandise. 
E) a trade agreement between two industrial countries. 
A) a purchase of goods or services from another country. 
B) a business transaction between two or more domestic firms. 
C) a sale of goods or services to another nation. 
D) a tax on foreign merchandise. 
E) a trade agreement between two industrial countries.

Question 8

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Households interact with business firms by:

Accepted Answer

A) buying resource services from business firms. 
B) paying wages for the use of labor. 
C) selling goods and services to firms. 
D) receiving payments from firms for use of resource services. 
E) paying rent to firms for the use of land. 
A) buying resource services from business firms. 
B) paying wages for the use of labor. 
C) selling goods and services to firms. 
D) receiving payments from firms for use of resource services. 
E) paying rent to firms for the use of land.

Question 9

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-National economic policies are usually set by the local government in the U.S., making it the focus of economic discussions.

Accepted Answer

A) True 
 B)False

Question 10

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following is true of fiscal spending at the federal, state, and local levels of the U.S. government?

Accepted Answer

A) In 2009, total government spending equalled around $1 billion. 
B) Investment expenditure in the U.S. exceeds the total spending at all levels of government. 
C) Government spending at federal, state, and local levels declined steadily from the 1960s until about 1980. 
D) Through the 1950s and 1960s, the U.S. government maintained a balanced budget. 
E) Federal government spending exceeds state and local government spending in the U.S. 
A) In 2009, total government spending equalled around $1 billion. 
B) Investment expenditure in the U.S. exceeds the total spending at all levels of government. 
C) Government spending at federal, state, and local levels declined steadily from the 1960s until about 1980. 
D) Through the 1950s and 1960s, the U.S. government maintained a balanced budget. 
E) Federal government spending exceeds state and local government spending in the U.S.

Question 11

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following observations is true of the federal budget between 1960 and 2010?

Accepted Answer

A) The federal budget was in deficit in the early 1960s. 
B) Between 1960 and 1970 the federal budget deficit reflected a sharp increase. 
C) The federal budget was in surplus between 1970 and 1980. 
D) The federal budget deficit was the highest in the late 1990s. 
E) The federal budget deficit was lower than 600 billion dollars in 2010. 
A) The federal budget was in deficit in the early 1960s. 
B) Between 1960 and 1970 the federal budget deficit reflected a sharp increase. 
C) The federal budget was in surplus between 1970 and 1980. 
D) The federal budget deficit was the highest in the late 1990s. 
E) The federal budget deficit was lower than 600 billion dollars in 2010.

Question 12

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-A household consists of only related family members like a father, mother, and children and not unrelated members like two students sharing a rented apartment.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is true of investment spending in the U.S. economy?

Accepted Answer

A) Investment spending in 2009 was higher than in 2006. 
B) Investment spending was almost double of household spending. 
C) Businesses had reduced expenditures on capital goods in 2008 and 2009. 
D) Investment spending exhibited a more or less steady increase between 1959 and 2009. 
E) Investment spending fluctuated relatively less than consumption. 
A) Investment spending in 2009 was higher than in 2006. 
B) Investment spending was almost double of household spending. 
C) Businesses had reduced expenditures on capital goods in 2008 and 2009. 
D) Investment spending exhibited a more or less steady increase between 1959 and 2009. 
E) Investment spending fluctuated relatively less than consumption.

Question 14

The _____ tend to have a smaller public sector relative to the total economy.

Accepted Answer

A) socialist economies 
B) centrally planned economies 
C) autocratic economies 
D) market economies 
E) mercantilist economies 
A) socialist economies 
B) centrally planned economies 
C) autocratic economies 
D) market economies 
E) mercantilist economies

Question 15

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-A trade deficit involves:

Accepted Answer

A) net flows of goods from foreign countries to the domestic government. 
B) net money flows from the foreign firms to the domestic government. 
C) net money flows from the domestic firms to the domestic government. 
D) net money flows from the foreign firms to the domestic firms. 
E) net flows of goods from foreign countries to the domestic firms. 
A) net flows of goods from foreign countries to the domestic government. 
B) net money flows from the foreign firms to the domestic government. 
C) net money flows from the domestic firms to the domestic government. 
D) net money flows from the foreign firms to the domestic firms. 
E) net flows of goods from foreign countries to the domestic firms.

Question 16

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following is true of the U.S. government?

Accepted Answer

A) The government in the United States takes the form of a single-party state where opposition parties are not legally allowed to take power. 
B) The size of the federal government in the U.S. has been declining since 1930. 
C) Employment in the government sector currently exceeds employment in the manufacturing sector. 
D) The U.S. federal government plays a much smaller role than state and local government due to states' rights. 
E) The service sector of the U.S. economy employs more number of people than the U.S. government. 
A) The government in the United States takes the form of a single-party state where opposition parties are not legally allowed to take power. 
B) The size of the federal government in the U.S. has been declining since 1930. 
C) Employment in the government sector currently exceeds employment in the manufacturing sector. 
D) The U.S. federal government plays a much smaller role than state and local government due to states' rights. 
E) The service sector of the U.S. economy employs more number of people than the U.S. government.

Question 17

A surplus in a country's trade balance means that:

Accepted Answer

A) its net exports exceed transfer payments. 
B) the country's currency is over-valued. 
C) the value of its net exports is positive. 
D) imports into the country exceed exports. 
E) domestic savings exceeds domestic investment. 
A) its net exports exceed transfer payments. 
B) the country's currency is over-valued. 
C) the value of its net exports is positive. 
D) imports into the country exceed exports. 
E) domestic savings exceeds domestic investment.

Question 18

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Financial intermediaries are best described as:

Accepted Answer

A) informal institutions that provide funds to the government to manage budget deficits. 
B) institutions that accept deposits and make loans. 
C) institutions that control the money supply in the economy. 
D) institutions that provide financial aid to foreign countries. 
E) individuals who manage other's investment portfolios. 
A) informal institutions that provide funds to the government to manage budget deficits. 
B) institutions that accept deposits and make loans. 
C) institutions that control the money supply in the economy. 
D) institutions that provide financial aid to foreign countries. 
E) individuals who manage other's investment portfolios.

Question 19

Which of the following is a valid difference between sole proprietorship and partnership?

Accepted Answer

A) Partnerships require a written agreement while sole proprietorships do not. 
B) Partnerships require a state charter while sole proprietorships do not. 
C) Partnerships generate lower profits than sole proprietorships. 
D) Partnerships are characterized by unlimited liability, while sole proprietorships are not. 
E) Partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual. 
A) Partnerships require a written agreement while sole proprietorships do not. 
B) Partnerships require a state charter while sole proprietorships do not. 
C) Partnerships generate lower profits than sole proprietorships. 
D) Partnerships are characterized by unlimited liability, while sole proprietorships are not. 
E) Partnerships consist of two or more partners sharing the responsibility of the firm, while sole proprietorship consists of a single individual.

Question 20

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Consumption or household spending of an economy comprises of both consumer spending and business spending.

Accepted Answer

A) True 
 B)False

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Identify the international organization that makes loans to developing countries.

The term "import" refers to:

Which of the following is true of investment spending in the U.S. economy?

The _____ tend to have a smaller public sector relative to the total economy.

A surplus in a country's trade balance means that:

Which of the following is a valid difference between sole proprietorship and partnership?

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

Exam 4: The Aggregate Economy

According to the World Bank, the high-income oil-exporting nations like Libya, Saudi Arabia, Kuwait, and the United Arab Emirates:

Identify the international organization that makes loans to developing countries.

The term "import" refers to:

Which of the following is true of investment spending in the U.S. economy?

The _____ tend to have a smaller public sector relative to the total economy.

A surplus in a country's trade balance means that:

Which of the following is a valid difference between sole proprietorship and partnership?

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

Markets and the Price System

Using Economics to Understand the World Around You

Elasticity: Demand and Supply

Demand: Consumer Choice

Supply: the Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Markets and Government

Antitrust and Regulation

Resource Markets

The Labor Market

The Capital Market

The Land Market and Natural Resources

Current Issues: Income, Income Distribution, Poverty, and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters