Deck 21: Economics

Question 1

The Council of Economic Advisors generally advocates that the government pursue goals in line with Keynesian economic theory, which advocates all of the following except:

A)Increasing national production
B)Maintaining price stability (or low inflation)
C)Maintaining low unemployment rates
D)Allowing the market to correct course naturally when it falters

Answer 1

Allowing the market to correct course naturally when it falters

Question 2

When the tax rate increases as the taxable amount increases, the tax is a:

A)Proportional tax
B)Progressive tax
C)Regressive tax
D)Capital gains tax

Answer 2

Progressive tax

Question 3

What is the difference between the GDP (gross domestic product) and GNP (gross national product)?

A)The GDP deals with what is generated within a nation's borders, whereas the GNP deals with what is generated by a nation's factors of production.
B)Both the GDP and GNP account for what a nation's citizens and government, alike, spend, invest and earn. However, the GDP also accounts for indirect tax expenditures.
C)The GDP deals with what is generated by a nation's factors of production, whereas the GNP deals with what is generated within a nation's borders.
D)Both the GDP and GNP account for what a nation's citizens and government, alike, spend, invest and earn. However, the GNP also accounts for indirect tax expenditures.

Answer 3

The GDP deals with what is generated within a nation's borders, whereas the GNP deals with what is generated by a nation's factors of production.

Question 4

Which committee in the U.S. House of Representatives is responsible for legislation related to revenue, raising taxes, trade agreements, tariffs, and the bonded debt of the nation?

A)Ways and Means
B)Financial Services
C)Budget
D)Appropriations

Question 5

The practice of consolidating debts to be traded in financial markets is termed:

A)Subprime lending
B)Privatization
C)Monetization
D)Securitization

Question 6

The organization chiefly responsible for the promotion and supervision of international trade is:

A)The International Monetary Fund
B)The World Trade Organization
C)The United Nations
D)The Organization for Economic Cooperation and Development

Question 7

Which economic theory describes how many European empires expanded through colonization in the 16th to mid-18th centuries because founding colonies ultimately increased a state's access to raw natural resources and expanded their marketplace?

A)Colonialism
B)Imperialism
C)Mercantilism
D)Free enterprise

Question 8

The primary goal of the World Bank is to:

A)Track counterfeiting
B)Monitor how countries spend their money
C)Stabilize exchange rates
D)Reduce poverty

Question 9

The exchange rate of currency is primarily monitored by:

A)The International Monetary Fund
B)The World Bank
C)The United Nations
D)Forex

Question 10

NAFTA created a trade bloc that consists of which nations?

A)United States, Canada, United Kingdom, Germany, France and Switzerland
B)United States and the entire European Union
C)United States, United Kingdom and the former Soviet Union
D)United States, Canada and Mexico

Question 11

What is the official currency of Morocco?

A)Franc
B)Dirham
C)Pound
D)Dinar

Question 12

What is the official currency of Ukraine?

A)Hryvnia
B)Ruble
C)Euro
D)Pound

Question 13

In which decade did the United States become the world's most productive economy?

A)1960s
B)1940s
C)1910s
D)1890s

Question 14

What is the official currency of Australia?

A)Australian rupiah
B)Australian pound
C)Australian dollar
D)Australian kina

Question 15

What are the biggest domestic industries in Egypt?

A)Mining and agriculture
B)Mining and manufacturing
C)Tourism and textiles
D)Textiles and food processing

Question 16

Which of the following states is not one of the top four leaders in volume spending in the United States?

A)Illinois
B)Florida
C)Texas
D)New York

Question 17

Which country has a long history of developing its domestic supplier and distributor relationships, thus making it difficult for foreign companies to enter their marketplace?

A)United States
B)Ireland
C)Jordan
D)Japan

Question 18

The banks of which of the following nations are open on Thursdays for only a few hours in the morning?

A)South Africa
B)Japan
C)Iran
D)Ecuador

Question 19

The informal and undocumented trade that dominates domestic trade in India is referred to as:

A)Ill money
B)Black money
C)Bad money
D)Red money

Question 20

Which United States economic sector has the most establishments or physical locations in which work of this nature is performed?

A)Retail trade
B)Health care and social assistance
C)Accommodation and food services
D)Construction

Question 21

Given the same principal amount, at the same rate over the same period of time, does simple or compound interest earn a higher return?

A)Simple interest earns more because it is assessed on a projected final value of the investment, not the principal amount.
B)Compound interest earns more because it is assessed on a projected final value of the investment, not the principal amount.
C)Simple interest earns more because it is interest earned on the principal amount and any interest accrued up to that point in time.
D)Compound interest earns more because it is interest earned on the principal amount and any interest accrued up to that point in time.

Question 22

The passage of property and assets to the firstborn child is called:

A)Firstborn acquisition
B)Inheritance
C)Primogeniture
D)Primary inheritance

Question 23

Which countries had the largest economies, beginning with the largest, as ordered by nominal GDP, in 1970?

A)United States - Japan - Soviet Union - Germany
B)United States - Soviet Union - West Germany - Japan
C)United States - Soviet Union - United Kingdom - France
D)United States - West Germany - Soviet Union - France

Question 24

Which countries had the largest economies, beginning with the largest, as ordered by nominal GDP, in 2010?

A)United States - China - Japan - Germany
B)United States - Japan - China - Germany
C)United States - China - Japan - United Kingdom
D)United States - Japan - Germany France

Question 25

Into how many sectors is the U.S. economy divided?

A)10
B)18
C)12
D)20

Question 26

Which United States economic sector has the highest annual payroll expense?

A)Health care and social assistance
B)Finance and insurance
C)Manufacturing
D)Professional, scientific and technical services

Question 27

Which United States economic sector earns the highest revenue per year?

A)Manufacturing
B)Wholesale trade
C)Retail trade

Question 28

Which United States economic sector has the highest average salary?

A)Management of companies and enterprises
B)Utilities
C)Finance and insurance
D)Information

Question 29

Which United States economic sector has the most paid employees?

A)Wholesale trade
B)Retail trade
C)Manufacturing
D)Health care and social assistance

Question 30

From which country does the United States import the most frequently?

A)Mexico
B)Japan
C)Canada
D)China

Question 31

Which law in economics states that consumers have a threshold for how much of a product they will buy, even if they can afford to buy more?

A)Law of markets
B)Law of diminishing marginal utility
C)Law of demands
D)Law of diminishing marginal returns

Question 32

When a company invests in offices, factories or any other type of facility outside of the nation in which it is headquartered, the expenditure is called its:

A)Foreign direct investments (FDI)
B)International investment costs (IIC)
C)Foreign investment deposits (FID)
D)Direct foreign deposits (DFD)

Question 33

The law of supply and demand dictates that if the supply is low and the demand is high:

A)The price will start moderate and increase gradually until it's high.
B)The price will start high and decrease gradually until it's moderate.
C)The price will be high.
D)The price will be low.

Question 34

What is the difference between macroeconomics and microeconomics?

A)Microeconomics is the study of people and individual businesses; macroeconomics is the study of entire economies.
B)Microeconomics studies the role of the individual spender in the economy: macroeconomics studies any group or entity consisting of more than one person.
C)Microeconomics is the study of entire economies; microeconomics is the study of people and individual businesses.
D)Microeconomics studies any group or entity consisting of more than one person; macroeconomics studies the role of the individual spender in the economy.

Question 35

Which of the following scenarios would not produce an outlier in standard supply and demand theory?

A)The cost of non-perishable food items or emergency supplies like batteries prior to a declaration of war or other foreseeable mass catastrophe
B)The cost of a new gadget at the time of its public release
C)The cost of a popular, much-hyped toy in December
D)The cost of a popular holiday food the week before the holiday

Question 36

Which of the following countries is not a member of OPEC?

A)Jordan
B)Qatar
C)Angola
D)Nigeria

Question 37

The official currency of Denmark is:

A)The krone
B)The (Danish) dollar
C)The franc
D)The euro

Question 38

Which of the following is not a function of the Federal Reserve Board?

A)Controlling the United States money supply
B)Adjusting the prime interest rate
C)Supervising the FDIC
D)Performing open market operations

Question 39

What is the limit the FDIC is willing to guarantee bank customers who hold savings accounts in a participating bank?

A)$50,000
B)$250,000
C)$25,000
D)$100,000

Question 40

FDIC is an acronym for which financial institution?

A)Federal Direct Intermonetary Committee
B)Financial Direct Insurance Congress
C)Federal Deposit Insurance Corporation
D)Financial Deposit Intermonetary Conglomerate

Question 41

What are the chief imports of South Africa?

A)Food and pharmaceuticals
B)Pharmaceuticals and motor vehicle parts and accessories
C)Food and automobiles
D)Automobiles and motor vehicle parts and accessories

Question 42

What are the chief imports of China?

A)Machinery and food
B)Industrial supplies and machinery
C)Food and telecommunication equipment
D)Electrical machinery and food

Question 43

Which country receives the most exported goods from the United States?

A)Mexico
B)Canada
C)Japan
D)China

Question 44

What are the chief imports of Switzerland?

A)Machinery and chemicals
B)Machinery and food
C)Automobiles and precision tools
D)Precision tools and textiles

Question 45

What are the chief exports of Kenya?

A)Tea and coffee
B)Coffee and refined petroleum products
C)Vegetables and fruits
D)Iron plating and tea

Question 46

What are the chief exports of Brazil?

A)Coffee and manufactured goods
B)Manufactured goods and iron ore
C)Coffee and soybeans
D)Footwear and furniture

Question 47

What are the chief imports of Mexico?

A)Industrial supplies and consumer electronics
B)Food and machinery
C)Machinery and industrial supplies
D)Food and automobiles

Question 48

What are the chief exports of Germany?

A)Aircraft and electrical machinery
B)Telecommunication products and motor vehicle parts and accessories
C)Automobiles and electrical machinery
D)Automobiles and motor vehicle parts and accessories

Question 49

What are the chief exports of Saudi Arabia?

A)Polymers and crude petroleum
B)Refined petroleum products and industrial alcohol
C)Polymers and industrial alcohol
D)Crude petroleum and refined petroleum products