AGEC Final Exam (Ch. 1–3 & 6–8) Study Guide 2026 | Complete Review, Practice Questions &
Exam Prep
The economics area that deals with output, employment, incomes, and other activities for the
entire economy (economic activities in the aggregate) is known as...
A. Microeconomics
B. Macroeconomics
C. Both
D. None of the above - correct answer ✔✔B. Macroeconomics
"The unemployment rate in the U.S. should be zero percent." This statement is an example of...
A. Positive Economics
B. Normative Economics - correct answer ✔✔B. Normative Economics
Demand being constant, the availability of a commodity in larger proportion will drive up the
price. True or False - correct answer ✔✔False
Opportunity Costs are the cost(s) of alternative opportunities foregone or sacrificed. True or
False - correct answer ✔✔True
What are the five basic steps of managerial decisions? - correct answer ✔✔1. Observing a
problem and thinking about its solution
2. Analyzing with further observations
3. Making the decision
4. Taking action
5. Accepting responsibility
In resource market we buy and sell...
,A. Inputs/resources/factors of production
B. Output/final commoditites - correct answer ✔✔A. Inputs/resources/factors of production
In product market, producers or business owners are on the demand side. True or False - correct
answer ✔✔False
U.S. Gross National Product refers to the total value of goods and services produced within the
United States either by foreign or domestic resources. True or False - correct answer ✔✔False
The income of a US citizen working in Louisiana will be a part of...
A. US gross domestic product
B. US gross national product
C. Both
D. None of the above - correct answer ✔✔C. Both
The income of a US citizen working in Mexico will be part of... (select all that apply)
A. US Gross Domestic Product
B. US Gross National Product
C. Mexican Gross National Product
D. Mexican Gross Domestic Product - correct answer ✔✔B. US Gross National Product
D. Mexican Gross Domestic Product
Fiscal Policy involves changing Taxes and Government Expenditure. True or False - correct
answer ✔✔True
Monetary policy involves changing...
A. Money supply and interest rates
, B. Government expenditure and taxes
C. Both
D. None of the above - correct answer ✔✔A. Money supply and interest rates
During recession the goal of the government will be to increase overall demand in the economy.
True or False - correct answer ✔✔True
Which of the following measures the overall welfare of the economy? (select all that apply)
A. GDP
B. GNP
C. Monetary Policy
D. Fiscal Policy - correct answer ✔✔A. GDP
B. GNP
Everything else being constant, with a decrease in unemployment rate the GDP increases. True
or False - correct answer ✔✔True
Which of the following is true if a country is suffering from recession?
A. GDP Falls
B. Unemployment rate increases
C. Overall demand decreases
D. All of the above
E. None of the above - correct answer ✔✔D. All of the above
If an economy is suffering from recession the government will adopt...
A. Expansionary Fiscal or Monetary Policy
B. Contractionary Fiscal or Monetary Policy
Exam Prep
The economics area that deals with output, employment, incomes, and other activities for the
entire economy (economic activities in the aggregate) is known as...
A. Microeconomics
B. Macroeconomics
C. Both
D. None of the above - correct answer ✔✔B. Macroeconomics
"The unemployment rate in the U.S. should be zero percent." This statement is an example of...
A. Positive Economics
B. Normative Economics - correct answer ✔✔B. Normative Economics
Demand being constant, the availability of a commodity in larger proportion will drive up the
price. True or False - correct answer ✔✔False
Opportunity Costs are the cost(s) of alternative opportunities foregone or sacrificed. True or
False - correct answer ✔✔True
What are the five basic steps of managerial decisions? - correct answer ✔✔1. Observing a
problem and thinking about its solution
2. Analyzing with further observations
3. Making the decision
4. Taking action
5. Accepting responsibility
In resource market we buy and sell...
,A. Inputs/resources/factors of production
B. Output/final commoditites - correct answer ✔✔A. Inputs/resources/factors of production
In product market, producers or business owners are on the demand side. True or False - correct
answer ✔✔False
U.S. Gross National Product refers to the total value of goods and services produced within the
United States either by foreign or domestic resources. True or False - correct answer ✔✔False
The income of a US citizen working in Louisiana will be a part of...
A. US gross domestic product
B. US gross national product
C. Both
D. None of the above - correct answer ✔✔C. Both
The income of a US citizen working in Mexico will be part of... (select all that apply)
A. US Gross Domestic Product
B. US Gross National Product
C. Mexican Gross National Product
D. Mexican Gross Domestic Product - correct answer ✔✔B. US Gross National Product
D. Mexican Gross Domestic Product
Fiscal Policy involves changing Taxes and Government Expenditure. True or False - correct
answer ✔✔True
Monetary policy involves changing...
A. Money supply and interest rates
, B. Government expenditure and taxes
C. Both
D. None of the above - correct answer ✔✔A. Money supply and interest rates
During recession the goal of the government will be to increase overall demand in the economy.
True or False - correct answer ✔✔True
Which of the following measures the overall welfare of the economy? (select all that apply)
A. GDP
B. GNP
C. Monetary Policy
D. Fiscal Policy - correct answer ✔✔A. GDP
B. GNP
Everything else being constant, with a decrease in unemployment rate the GDP increases. True
or False - correct answer ✔✔True
Which of the following is true if a country is suffering from recession?
A. GDP Falls
B. Unemployment rate increases
C. Overall demand decreases
D. All of the above
E. None of the above - correct answer ✔✔D. All of the above
If an economy is suffering from recession the government will adopt...
A. Expansionary Fiscal or Monetary Policy
B. Contractionary Fiscal or Monetary Policy
