Question 1

According to the World Bank, low-income economies are heavily concentrated in:

Accepted Answer

A) Europe and Africa. 
B) Europe and Asia. 
C) Asia and Africa. 
D) Asia and Australia. 
E) North America and Australia. 
A) Europe and Africa. 
B) Europe and Asia. 
C) Asia and Africa. 
D) Asia and Australia. 
E) North America and Australia.

Question 2

When a household owns shares of stock, _____.

Accepted Answer

A) it has ownership rights in that firm 
B) it is entitled to the majority of the firm's profits 
C) it is liable to bear the entire loss faced by the firm 
D) it can consume the firm's products without paying for it 
E) it is responsible for correcting any defect in the product identified by the customers 
A) it has ownership rights in that firm 
B) it is entitled to the majority of the firm's profits 
C) it is liable to bear the entire loss faced by the firm 
D) it can consume the firm's products without paying for it 
E) it is responsible for correcting any defect in the product identified by the customers

Question 3

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Accepted Answer

A) $1,000. 
B) $100. 
C) $10,000. 
D) $50. 
E) $5,000. 
A) $1,000. 
B) $100. 
C) $10,000. 
D) $50. 
E) $5,000.

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.
-Which of the following is true of U.S. net exports prior to the 1960s?

Accepted Answer

A) Since most of the oil needs of the U.S. were met through imports, imports exceeded exports prior to the 1960s in the U.S. 
B) Prior to the 1960s, exports from the U.S. more or less equalled imports into the U.S. 
C) The U.S. was running a trade surplus prior to the 1960s. 
D) Prior to the 1960s, the U.S. ran twin deficits- both a current account deficit as well as a budget deficit. 
E) Since the U.S. dollar was overvalued prior to the 1960s, the U.S. neither exported nor imported any goods and services. 
A) Since most of the oil needs of the U.S. were met through imports, imports exceeded exports prior to the 1960s in the U.S. 
B) Prior to the 1960s, exports from the U.S. more or less equalled imports into the U.S. 
C) The U.S. was running a trade surplus prior to the 1960s. 
D) Prior to the 1960s, the U.S. ran twin deficits- both a current account deficit as well as a budget deficit. 
E) Since the U.S. dollar was overvalued prior to the 1960s, the U.S. neither exported nor imported any goods and services.

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.
-According to Scenario 4-1, country C has net exports of:

Accepted Answer

A) zero. 
B) $13 million. 
C) $6 million. 
D) −$13 million. 
E) −$6 million. 
A) zero. 
B) $13 million. 
C) $6 million. 
D) −$13 million. 
E) −$6 million.

Question 6

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.
-The government sector sells resource services to households and buys goods and services from firms.

Accepted Answer

A) True 
 B)False

Question 7

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

Accepted Answer

A) joint ventures. 
B) sole proprietorship firms. 
C) partnership firms. 
D) multinational firms. 
E) co-operative firms. 
A) joint ventures. 
B) sole proprietorship firms. 
C) partnership firms. 
D) multinational firms. 
E) co-operative firms.

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.
-A person obtains income by selling the services of the resources that he or she owns.

Accepted Answer

A) True 
 B)False

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.
-According to the World Bank, developing countries greatly outnumber industrial countries.

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.
-Since the U.S. is organized as a market economy, the government sector does not play any role in economic activity.

Accepted Answer

A) True 
 B)False

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.
-Empirical evidence suggests that the federal budget has remained more or less in surplus between 1990 and 2002.

Accepted Answer

A) True 
 B)False

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.
-According to Scenario 4-1, country A has net exports of:

Accepted Answer

A) $18 million. 
B) $8 million. 
C) $13 million. 
D) $9 million. 
E) $6 million. 
A) $18 million. 
B) $8 million. 
C) $13 million. 
D) $9 million. 
E) $6 million.

Question 13

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.
-The income transferred by the government from a citizen who is earning income to another citizen is referred to as:

Accepted Answer

A) fiscal spending. 
B) transfer payment. 
C) budgetary allowance. 
D) taxation. 
E) internal debt. 
A) fiscal spending. 
B) transfer payment. 
C) budgetary allowance. 
D) taxation. 
E) internal debt.

Question 14

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.
-According to Scenario 4-1, country B is running a:

Accepted Answer

A) trade deficit with country A and a trade surplus with country C. 
B) trade surplus with both countries A and C. 
C) trade surplus with country A and a trade deficit with country C. 
D) trade deficit with both countries A and C. 
E) balanced trade with country A and a trade deficit with country C. 
A) trade deficit with country A and a trade surplus with country C. 
B) trade surplus with both countries A and C. 
C) trade surplus with country A and a trade deficit with country C. 
D) trade deficit with both countries A and C. 
E) balanced trade with country A and a trade deficit with country C.

Question 15

In economics, the term investment refers to:

Accepted Answer

A) the cost of employing human capital. 
B) expenditure on expense accounts of employees. 
C) firms' expenditure on salaries and rent. 
D) business spending for acquiring capital goods. 
E) the expenses on the purchase of stocks of a corporation. 
A) the cost of employing human capital. 
B) expenditure on expense accounts of employees. 
C) firms' expenditure on salaries and rent. 
D) business spending for acquiring capital goods. 
E) the expenses on the purchase of stocks of a corporation.

Question 16

Which of the following is a defining feature of a multinational firm?

Accepted Answer

A) It exports goods and services to foreign nations. 
B) It develops joint ventures with foreign firms. 
C) It owns and operates production facilities in more than one country. 
D) It employs agents in various countries to sell their products abroad. 
E) It holds patents on its products and services. 
A) It exports goods and services to foreign nations. 
B) It develops joint ventures with foreign firms. 
C) It owns and operates production facilities in more than one country. 
D) It employs agents in various countries to sell their products abroad. 
E) It holds patents on its products and services.

Question 17

Which of the following economic indicators is used by the World Bank to classify countries as industrial or emerging economies?

Accepted Answer

A) GDP 
B) Rate of inflation 
C) Net exports 
D) Per capita income 
E) Budget deficits 
A) GDP 
B) Rate of inflation 
C) Net exports 
D) Per capita income 
E) Budget deficits

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.
-In a market economy, _____ own(s) all the basic resources or factors of production.

Accepted Answer

A) households 
B) the federal government 
C) the Federal Reserve bank 
D) the local government 
E) business firms 
A) households 
B) the federal government 
C) the Federal Reserve bank 
D) the local government 
E) business firms

Question 19

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 considered a financial intermediary?

Accepted Answer

A) The Federal Reserve 
B) A bankruptcy court 
C) The U.S. Department of Commerce 
D) A credit union 
E) ​A foreign exchange 
A) The Federal Reserve 
B) A bankruptcy court 
C) The U.S. Department of Commerce 
D) A credit union 
E) ​A foreign exchange

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.
-An unmarried couple holding joint title to their condominium constitutes a household.

Accepted Answer

A) True 
 B)False

According to the World Bank, low-income economies are heavily concentrated in:

When a household owns shares of stock, _____.

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

In economics, the term investment refers to:

Which of the following is a defining feature of a multinational firm?

Which of the following economic indicators is used by the World Bank to classify countries as industrial or emerging economies?

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, low-income economies are heavily concentrated in:

When a household owns shares of stock, _____.

A country is categorized as a low-income economy by the World Bank if its per capita income is below:

Based on the fact that the companies Ford, IBM, PepsiCo, and McDonald's own and operate producing units in many different countries, they are categorized as:

In economics, the term investment refers to:

Which of the following is a defining feature of a multinational firm?

Which of the following economic indicators is used by the World Bank to classify countries as industrial or emerging economies?

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