Deck 2: The Economy: What Does It Mean

Question 1

A common metaphor for the state of the economy is that the economy is:

A) Healthy
B) Growing
C) Sick
D) All of the above
E) None of the above

Answer 1

All of the above

Question 2

The economy is often treated as an entity that is:

A) Separate from everyday life
B) Distinct from everyday life
C) Identifiable and bounded
D) All of the above
E) None of the above

Answer 2

All of the above

Question 3

Major events such as ___________________ are often assessed in relation to their impact upon the economy.

A) Terrorist attacks
B) Natural disasters
C) Political tensions
D) All of the above
E) None of the above

Answer 3

All of the above

Question 4

Gross domestic product (GDP) adds together ___________________.

A) The total market value of the production of goods and services in a particular economy
B) The net market value of industrial production in a particular economy
C) The gross market value of industrial production in a particular economy
D) The gross market value of industrial production in a domestic economy
E) The total market value of industrial production in a domestic economy

Question 5

A simpler approach to conceptualizing GDP would be the ___________________ in a particular economy.

A) Protracted output
B) Partial output
C) Total output
D) All of the above
E) None of the above

Question 6

The most straightforward way of calculating GDP is to add together all recorded final ___________________ on goods and services in a particular territory.

A) Expenditures
B) Income
C) Revenue
D) All of the above
E) None of the above

Question 7

The consumption costs of governments often include:

A) School infrastructure
B) Military spending
C) Healthcare spending
D) All of the above
E) None of the above

Question 8

The calculation of GDP includes money entering the economy from abroad by taking the value of output that is exported, _______________ the value of imports.

A) In addition to
B) Divided by
C) Multiplied by
D) All of the above
E) None of the above

Question 9

GDP provides an immediate sense of the geographical unevenness of:

A) Political tensions
B) Consumer preferences
C) Global wealth and power
D) All of the above
E) None of the above

Question 10

The word "economy" would have referred to the management of a _____________ in the early 18th century.

A) Household
B) Village
C) Hamlet
D) All of the above
E) None of the above

Question 11

In England, in the latter decades of the 18th century a period of rapid change was ushered in during the:

A) Holy wars
B) English Reformation
C) Renaissance
D) All of the above
E) None of the above

Question 12

In pre-industrial societies, most agricultural or craft production is for _____________ purposes.

A) Economic
B) Monetary
C) Political
D) Subsistence
E) Spiritual

Question 13

With production on a much grander scale and increasing levels of specialization during the Industrial Revolution, it became possible to think of a:

A) Division of labor
B) Separation of church and state
C) Global banking system
D) All of the above
E) None of the above

Question 14

Published in 1776, Adam Smith's book The Wealth of Nations showed that a group of people _______________________________________________ could make pins far more quickly and efficiently than an individual craftsman carrying out every stage of the process himself.

A) Coming from the same background and specializing in the same skills
B) Who were committed to bolstering the wealth of their nation
C) Specializing in different stages of the manufacturing process
D) All of the above
E) None of the above

Question 15

Adam Smith's metaphor of the "invisible hand" sums up his argument that by seeking only their own enrichment and advancement, ______________ unconsciously benefited society as a whole.

A) Corporations
B) Governments
C) Trade unions
D) All of the above
E) None of the above

Question 16

The analysis of national production and consumption, which Adam Smith developed, became known as:

A) Econometrics
B) Political economy
C) Political science
D) Modern sociology
E) National accounting

Question 17

The late 19th century was a period of profound change for many European societies as:

A) Colonial territories were expanded
B) Large industrial cities were growing rapidly
C) Great advances were being made in natural sciences
D) All of the above
E) None of the above

Question 18

As modern economics developed into an academic discipline in the late 19th century, economists started to think less in terms of national political economy and more in terms of _______________________.

A) Individual economic decisions and outcomes
B) Household decision-making and outcomes
C) Global trading networks and telecommunications
D) The impacts of economic growth on the environment
E) Competitive production strategies

Question 19

Economists apply the concept of "utility" to anything "economic" that can be measured in terms of:

A) Its value or its usefulness to nations
B) Its value or its usefulness to corporations
C) Its value or its usefulness to individuals
D) All of the above
E) None of the above

Question 20

The emergence of econometrics as a field of study in the 1930s saw the application of __________________ to capture economic processes.

A) Complex mathematical techniques
B) Complex mechanical models
C) External shock analysis
D) All of the above
E) None of the above

Question 21

John Maynard Keynes established the idea that a national economy was a bounded and self-contained entity that:

A) Could be controlled through military force
B) Could be managed using local decision-making
C) Could be managed using particular policy tools
D) All of the above
E) None of the above

Question 22

Many industrialized (non-communist) nations first began to implement the ideas that Keynes was advocating following:

A) The Second World War
B) The Vietnam War
C) The Gulf War
D) All of the above
E) None of the above

Question 23

A Keynesian conception of the economy viewed it as an:

A) Uncontrollable and natural process
B) Integral part of our everyday lives and interactions with others
C) External sphere, separate from the rest of our lives
D) All of the above
E) None of the above

Question 24

Keynesianism was based on the belief that the economic sphere operated independently of:

A) Social processes
B) Political processes
C) Religious processes
D) All of the above
E) None of the above

Question 25

Institutions such as the World Bank and the International Monetary Fund were established in the 1940s in order for national governments to:

A) Coordinate their economies
B) Discuss the possibility for one global currency
C) Set domestic interest rates
D) All of the above
E) None of the above

Question 26

Much of what we take for granted in our notion of the economy is actually a set of ideas that are relatively:

A) Ancient
B) Intrinsic
C) Recent
D) All of the above
E) None of the above

Question 27

There is nothing ___________________ about the way in which we understand, measure, and manage the economy.

A) Natural
B) Fundamental
C) Ideal
D) All of the above
E) None of the above

Question 28

Economics is usually defined as the study of the allocation of _______________ resources.

A) Abundant
B) Scarce
C) Natural
D) All of the above
E) None of the above

Question 29

Demand for a product or service can include:

A) Fundamental human needs for food and shelter
B) Luxuries such as expensive art and jewelry
C) Clothing and electronics
D) All of the above
E) None of the above

Question 30

Effective demand represents desires by individuals backed up by:

A) Their ability to pay for them
B) The availability of a product or service in the market
C) Ethnical consumption
D) All of the above
E) None of the above

Question 31

Demand is never fixed and may depend upon:

A) Fashion
B) Geography
C) Taste
D) All of the above
E) None of the above

Question 32

A process of ______________ must be in place to meet demand.

A) Supply
B) Rationalization
C) Industrialization
D) All of the above
E) None of the above

Question 33

Firms represent organizing units that coordinate the ____________ of almost every conceivable product or service.

A) Production
B) Marketing
C) Sale
D) All of the above
E) None of the above

Question 34

Firms often seek to:

A) Make as much profit as possible
B) Expand market share rather than their immediate profit on each unit produced
C) Establish or maintain a reputation
D) All of the above
E) None of the above

Question 35

Which of the following represents an ownership or organizational form of a firm:

A) Single proprietor companies
B) Partnerships
C) Public companies
D) All of the above
E) None of the above

Question 36

Conventional economic analysis assumes that demand and supply will _______________ in a market.

A) Come together
B) Be eliminated
C) Diverge
D) All of the above
E) None of the above

Question 37

In its purest form a market operates to unite buyers and sellers and to fix a ______________ for the product or service.

A) Tax
B) Gratuity
C) Price
D) All of the above
E) None of the above

Question 38

The higher the price for something, the ______________ the demand.

A) Higher
B) More realistic
C) More accurate
D) All of the above
E) None of the above

Question 39

The higher the price for something, the more someone somewhere will be willing to:

A) Supply it
B) Demand it
C) Buy it
D) All of the above
E) None of the above

Question 40

The tendencies of buyers and sellers can be represented in the meeting of demand and supply curves. Where the two lines intersect, then demand and supply have reached a(n) _________________ and this is the price that will be set.

A) Equilibrium
B) Disparity
C) Impasse
D) All of the above
E) None of the above

Question 41

When consumers and producers all have complete knowledge of their options in terms of who is available as a buyer or seller, this is a situation known as ____________________.

A) Imperfect competition
B) An unbalanced economy
C) Market inequity
D) All of the above
E) None of the above

Question 42

When the number of buyers for a product or service is limited to a very small number of purchasers, this is known as a(n):

A) Oligopsony
B) Cacophony
C) Cartel
D) All of the above
E) None of the above

Question 43

In markets of all kinds, prices are determined through the use of money as a universal measure of:

A) Dollars
B) Complexity
C) Value
D) All of the above
E) None of the above

Question 44

Economic analysis usually assumes people behave individually, but the decisions people make are far more complicated and irrational. Self-interest may be mixed with:

A) Altruism
B) Charity
C) Ethical consumption
D) All of the above
E) None of the above

Question 45

If a monetary value cannot readily be assigned to an activity, then it is not conventionally defined as a(n) ____________ activity.

A) Economic
B) Cost-effective
C) Worthwhile
D) All of the above
E) None of the above

Question 46

While the modern Western view is that property can be owned, and bought and sold by individuals, in many indigenous cultures, individual ownership of this sort is an alien concept. Instead, the right to use the resources of the land or the sea is often __________________ and no individual has the right to sell them.

A) Exclusive
B) Collective
C) Private
D) All of the above

Question 47

Discuss some of the limitations associated with achieving the conditions of "perfect competition" in any market. What do these limitations or complications imply for a "fair price" for any product or service in the marketplace?

Question 48

According to Adam Smith, in what ways does the pursuit of individual self-interest connect with the wealth of an entire nation?

Question 49

The assumption of private property is the norm within the economic culture of capitalist societies. What are some of the approaches to measuring the utility of a parcel of land, or in other words, its value? In what ways might society change if private property were abolished and all land became collective and public?