Question 1

Adam Smith's theories are called both laissez-faire economics and classical economics.

Accepted Answer

A) True 
 B)False

Question 2

The federal debt requires the U.S. Treasury Department to borrow large amounts of money. This money is diverted from the private sector where it would otherwise be available as loans for all but which of the following?

Accepted Answer

A)  New and expanding businesses 
B)  Credit items for consumers 
C)  Modernizing industrial plants 
D)  Helping less developed nations modernize industrial plants

Question 3

Trade slows down the flow of ideas and technology, preventing nations from learning from each other.

Accepted Answer

A) True 
 B)False

Question 4

The Reagan administration of 1981 was successful in reducing income taxes and decreasing unemployment.

Accepted Answer

A) True 
 B)False

Question 5

The international organization that adjudicates trade disputes among countries and monitors and enforces trade agreements is the __________.

Accepted Answer

The answer of The international organization that adjudicates trade disputes...

Question 6

Decisions of employers and employees to offer and accept jobs at specified wages is the definition of

Accepted Answer

A)  the capital market. 
B)  the labor market. 
C)  fiscal policy. 
D)  monetary policy.

Question 7

Most U. S. government spending goes into entitlement programs. Sixty percent of federal spending is used to provide all classes of people with legally enforceable rights to government benefits. Which of these is not a form of entitlement?

Accepted Answer

A)  Food stamps 
B)  Social security 
C)  Medicaid 
D)  School vouchers

Question 8

A __________ involves the purchase of enough stock in publically held corporations to force the ouster and replacement of existing corporate management.

Accepted Answer

The answer of A __________ involves the purchase of enough...

Question 9

Inflation refers to a rising price level for consumer goods and services, which results in increased purchasing power of money.

Accepted Answer

A) True 
 B)False

Question 10

NAFTA envisioned __________ on products from Mexico, the United States, and Canada.

Accepted Answer

A)  an increase in taxes 
B)  the removal of tariffs 
C)  more revenues 
D)  higher prices

Question 11

The _________ consists of the decisions of employers and employees to offer and accept jobs at specified wages (prices).

Accepted Answer

The answer of The _________ consists of the decisions of...

Question 12

The principle of comparative advantage suggests that if nations devote more of their resources to the production of those goods that they produce most efficiently, then all trading nations

Accepted Answer

A)  must pay tariffs. 
B)  benefit. 
C)  lose profits. 
D)  none of these

Question 13

Today, almost one-quarter of the world's total economic output is sold in a country other than the country in which it was produced. The U.S. currently exports about _________ percent of the value of its GDP and imports about _________ percent.

Accepted Answer

A)  5, 10 
B)  13, 16 
C)  1, 2 
D)  3, 6

Question 14

The labor market largely determines where people will work and how much they will be paid.

Accepted Answer

A) True 
 B)False

Question 15

The capital market refers to money made available by banks and other lenders as loans, primarily to business firms but to consumers as well. The interest rate charged by lenders is really

Accepted Answer

A)  the price of the money. 
B)  based on the stock market. 
C)  a form of collective decision making. 
D)  fair for businesses but unfair to consumers.

Question 16

Some economic activities escape measurement in the GDP. This underground economy involves activities that are unreported to the government and are therefore not counted in the GDP. Which of the following is not an example of this underground economy?

Accepted Answer

A)  Illegal drug transactions 
B)  Illegal gun transactions 
C)  Unreported income tax 
D)  A waiter's correctly reported tips

Question 17

Ideal conditions for a market operation include all of the following EXCEPT

Accepted Answer

A)  competition among many buyers and sellers. 
B)  the ability of buyer to exclude others from benefits of purchase. 
C)  deregulation. 
D)  mobility of resources and labor.

Question 18

Explain why America's corporate and financial institutions would support tariffs.

Accepted Answer

The answer of Explain why America's corporate and financial institutions...

Question 19

U.S. firms that dominated the domestic market in the 1950s and 1960s-steel, automobiles, aircraft, computers, electronics, agriculture, etc.-began to look abroad to expand their own sales. American corporations became

Accepted Answer

A)  multidisciplinary. 
B)  multifaceted. 
C)  multinational. 
D)  multi-million dollar corporations.

Question 20

On the whole, the private enterprise economy organizes itself with a minimum of centralized planning or direction. The American system relies chiefly on private individuals, in search of

Accepted Answer

A)  cheap goods to keep the economy moving. 
B)  better jobs to keep America economically sound. 
C)  wages and profits to get the job done. 
D)  the American dream to get the job done.

Exam 8: Power and the Economy

Adam Smith's theories are called both laissez-faire economics and classical economics.

The federal debt requires the U.S. Treasury Department to borrow large amounts of money. This money is diverted from the private sector where it would otherwise be available as loans for all but which of the following?

Trade slows down the flow of ideas and technology, preventing nations from learning from each other.

The Reagan administration of 1981 was successful in reducing income taxes and decreasing unemployment.

The international organization that adjudicates trade disputes among countries and monitors and enforces trade agreements is the __________.

Decisions of employers and employees to offer and accept jobs at specified wages is the definition of

Most U. S. government spending goes into entitlement programs. Sixty percent of federal spending is used to provide all classes of people with legally enforceable rights to government benefits. Which of these is not a form of entitlement?

A __________ involves the purchase of enough stock in publically held corporations to force the ouster and replacement of existing corporate management.

Inflation refers to a rising price level for consumer goods and services, which results in increased purchasing power of money.

NAFTA envisioned __________ on products from Mexico, the United States, and Canada.

The _________ consists of the decisions of employers and employees to offer and accept jobs at specified wages (prices).

The principle of comparative advantage suggests that if nations devote more of their resources to the production of those goods that they produce most efficiently, then all trading nations

Today, almost one-quarter of the world's total economic output is sold in a country other than the country in which it was produced. The U.S. currently exports about _ percent of the value of its GDP and imports about _ percent.

The labor market largely determines where people will work and how much they will be paid.

The capital market refers to money made available by banks and other lenders as loans, primarily to business firms but to consumers as well. The interest rate charged by lenders is really

Some economic activities escape measurement in the GDP. This underground economy involves activities that are unreported to the government and are therefore not counted in the GDP. Which of the following is not an example of this underground economy?

Ideal conditions for a market operation include all of the following EXCEPT

Explain why America's corporate and financial institutions would support tariffs.

U.S. firms that dominated the domestic market in the 1950s and 1960s-steel, automobiles, aircraft, computers, electronics, agriculture, etc.-began to look abroad to expand their own sales. American corporations became

On the whole, the private enterprise economy organizes itself with a minimum of centralized planning or direction. The American system relies chiefly on private individuals, in search of