Courses

Economics - Test 1


1. The most important automatic economic stabilizer is?
    Open market transactions.
    The tax system.
    Unemployment compensation.
    Welfare benefits.


2. From 1980 to 2000, the debt of the US federal government?
    Fell by 50%.
    Fluctuated but was stable.
    Rose by 200%.
    Rose by 400%.


3. The minimum wage is an example of?
    A price floor.
    A price ceiling.
    A free-market process.
    An efficient labor allocation mechanism.


4. The principle of comparative advantage was developed by?
    Adam Smith.
    Harry Truman.
    David Ricardo.
    John Maynard Keynes.


5. Inflation causes?
    Productivity to increase.
    The value of money to rise.
    The value of money to fall.
    The government to lower taxes.


6. There was hyperinflation during?
    The 1800s in the United States.
    Post World War I Germany.
    The 1970s in the United States.
    The Russian revolution


7. U.S. imports account for about what percentage of GDP?
    Less than 1 percent
    About 3 percent
    About 7 percent
    Over 10 percent


8. Suppose the dollar depreciates relative to the British pound. We know that:
    Prices in the United States are falling.
    Prices in the United States are rising.
    Prices in Great Britain are rising.
    United States dollars will buy more British pounds.


9. A tax placed on a good?
    Causes the price of the good to fall.
    Causes the size of the market for the good to shrink.
    Affects buyers of the good, but not sellers.
    Is usually borne entirely by the seller of the good.


10. A common example of a price ceiling is?
    Farm price supports.
    The minimum wage.
    Rent control.
    Income taxes.







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