Economics Final Exam Questions and Answers Already Passed

Economics Final Exam Questions and Answers Already Passed Which is the most effective solution when planning for retirement? Start as soon as possible to maximize savings The marketing mix, also known as the Four Ps of Marketing, consists of product, price, promotion, and _[blank]_. Place Which type of expense can change based on use or volume? Variable Joe works full time as a carpenter and brings home $3,000 per month. He owes a total of $1,500 in fixed expenses every month, which includes items such as rent and insurance. If Joe had $1,000 in variable expenses such as groceries and entertainment, what would be his ending balance? $500 What was the original purpose of savings and loan associations? a way for groups of people to pool their money so that each member could build or buy a home What are some advantages of using a debit card as opposed to cash? Debit cards can help track spending carefully and accurately. Debit cards can be replaced if they are lost. Alan and Samuel each have a 30-year mortgage. Both mortgages were approved at the same time. Alan pays 5 percent interest, while Samuel only pays 3.5 percent. If Alan and Samuel are the same age and make the same amount of money, why is Alan paying more in interest? Samuel has a better credit score, so his interest rate is lower. Which is an example of an unsecured revolving loan? credit card How are whole life insurance and term life insurance different? Whole life insurance does not expire, but term life insurance does. What role does income tax serve for the federal government? It is the largest source of revenue for the federal government. Which are benefits of a mixed market economy? A mixed market economy provides a wide variety of products and services. A mixed market economy provides some regulation to protect consumers. Manny wishes to sell candy bars to his classmates to earn extra money. why to produce Why do command economies fail? People have little incentive to innovate. The market allocates resources. Large, slow bureaucracies form. In a market economy, the exclusive possession or control of the supply or trade in a commodity or service can develop, discouraging competition. monopoly Which accurately reflect the role of government in a mixed market economy? The government owns or partially owns some businesses. The government requires businesses to provide truthful advertising. Which are characteristics of the US mixed market economy? consumer sovereignty private property profit motive What arguments can be made for advantages of strong regulation of an industry? to provide consumer protection to ensure there is adequate competition to decrease the burden on private business What are examples of the US government indirectly impacting the economy without being in direct competition with private business? regulating gas and electric public utility companies providing social security benefits to retirees owning and operating the United States Postal Service What is true about setting up a sole proprietorship? The owner has unlimited personal liability and is responsible for all debt. What makes setting up a corporation difficult? There are many tax and legal requirements that must be met. Economists note that personal income rose by 5 percent last year. It will cause the demand curve to shift right. Which is true regarding inelastic demand? Products that are inelastic do not have substitutes. Products that are inelastic are sensitive to price changes. Products that are inelastic meet an important need. Jane has a carpet cleaning business. The cost of production for her business went down due to cleaning solution becoming less expensive. What would happen to the supply curve in this scenario? The supply curve will shift left. How does time impact elasticity of supply? A product can become more elastic in the long run. What will most likely happen if a toy supplier sets a price too low for a product? A surplus will occur in which supply exceeds the demand of the product. A price ceiling helps consumers by keeping costs low, but what is the possible downside? A retailer's potential income is limited. Company X is making profits providing a new satellite service, but other firms cannot enter their market to compete with them. This is because Company X owns the patent on the process to develop the new service.. What type of monopoly does Company X have? technological What is an argument for government deregulation of products and services? Deregulation leads to an increase in consumer choices. How does a union get its power? through a company's articles of incorporation through the membership of workers through collective bargaining Which accurately describes why the government may set a price floor such as minimum wage? to ensure people earn enough money to afford housing and food What would most likely happen if the federal government decreased taxes for its citizens? Aggregate demand would increase, especially for wealthy individuals. Why should an effective tax be efficient? so the costs of collection are as low When does the tax rate increase under a progressive tax? when a person's income increases Which are accurate regarding how government spending affects the economy? The government makes payments to poor families and redistributes wealth in the nation. Public universities funded by taxpayers on average cost more than private universities. Opening a military base spurs the economy in the surrounding area. What category of spending is included in mandatory spending of the federal budget? health care spending What is a likely consequence of decades of deficit spending? increasing debt payments What is true regarding mandatory spending? It is set by law and cannot be altered. What was a problem with using cowrie shells as an early form of money? They were too plentiful. What was an effect of the Banking Act of 1863? Some banks went out of business because of taxes. Which is a stock index used to measure the performance and prices of stocks? Dow Jones Industrial Average What are the primary reasons people choose to invest and trade stocks? to earn capital gains to earn predictable quarterly interest to earn a dividend In the last quarter, there was a 4 percent increase in gross domestic product (GDP). What can be inferred from the scenario? The economy is growing. Which is true about per capita GDP? An increase in population can have a negative impact on per capita GDP if the additional population does not produce. Why would an economist review real GDP? to remove the impact of inflation for a year-to-year comparison Which action could the government take to slow inflation? Raise interest rates. What are the responsibilities of the Federal Reserve? implements American monetary policy enters money into circulation oversees the New York Stock Exchange What are benefits of international trade? It leads to new and shared ideas as a result of cultural diffusion. It allows countries to acquire goods they cannot produce efficiently. Which is true regarding tariffs? Tariffs can raise revenue for the government. Tariffs can lead to a trade freeze. Which accurately reflect economic conditions in developing nations? Education is often reserved for the wealthiest members of society. Lending institutions do not exist or only serve wealthy members of society. Developing nations often lack efficient and effective law enforcement. What are major obstacles to economic development for developing countries? high population growth limited natural resources low skilled workforce