53) Which of the following is the MOST likely pricing approach for a monopoly?
A) Charge customers whatever you please
B) Give customers a real bargain on price
C) Charge a price that will not cause consumer demand to drop
D) Undercut the prices of the competition
E) Give customers a fair price that cannot be matched by competitors
54) What is the term used to describe a market condition where buyers are able to satisfy the
demand of the consumer, yet have some product remain unsold?
A) Surplus
B) Stoppage
C) Shortage
D) Demand deficit
E) Equilibrium price
55) When a new product has high demand in the market, how should a company react?
A) Increase the supply of the product
B) Decrease the supply of the product
C) Reduce the price of the product
D) Maintain the current supply until demand falls
E) Create an artificial shortage of the product
56) Economic systems differ in how factors of production are used.
57) The point at which the supply curve and the demand curve intersect is the market price.
58) One of the four elements that are necessary for private enterprise to be carried out is
reasonable prices.
59) Product differentiation is common in a market characterized by monopolistic competition.
60) In a natural monopoly, prices tend to be government regulated.
61) What is required for perfect competition to exist, and what principles must be in place to
achieve those conditions?
62) Discuss each of the four principles of private enterprise systems.
63) How can price be best determined?
64) Explain the concept of mixed market economies and how they support pure planned and pure
market economies.
65) Which of the following offers experts statistical information on the strength and performance
of an economy?
A) Market price reports
B) Supply curves
C) Economic indicators
D) Demand Curves
E) Degrees of competition reports
66) National economies, regardless of industry, are measured through what?
A) Standard of living
B) Aggregate output
C) Gross national product
D) Output per capita
E) Inflation rates
67) What term do economists use for the pattern of short-term expansions and contractions in the
economy?
A) Business cycle
B) Aggregate output
C) Standard of living
D) Consumer price index
E) Purchasing power parity
68) Which indicator refers to the total quantity of goods and services produced by an economic
system during a given period?
A) The business cycle
B) Aggregate output
C) Gross domestic product
D) The consumer price index
E) Gross national product
69) What type of policy is made up of fiscal and monetary policy?
A) Trade
B) Employment
C) Stabilization
D) Tax
E) Foreign
70) How would supply affect the aggregate output of an economy?
A) Supply would decrease aggregate output
B) Increases in both would cause inflation
C) Aggregate output would grow as supply grows
D) Supply would have no direct effect on aggregate output
E) Aggregate output would increase the money supply
71) Which of the following BEST describes what the consumer price index is used to indicate?
A) The average wage rate for a given region
B) The economic performance of key consumer product companies
C) The changes in the cost of consumer products over time
D) The percentage of consumers in the total population looking for work
E) The number of price increases within a given period of time
72) Which of the following is a likely cause of increased prices for products, decreased
purchasing power, and decreased profit margins?
A) Low unemployment
B) Stagnant wages
C) Declining living standards
D) Cyclical inflation
E) Limited credit
73) Which term refers to the pattern of short-term ups and downs in an economy?
A) Aggregate output
B) Business cycle
C) Standard of living
D) Balance of payments
E) Demand and supply schedule
74) Which term refers to the total quantity and quality of goods and services that people living in
an economic system can purchase?
A) Business cycle supply
B) Demand and supply schedule
C) Standard of living
D) Aggregate output
E) Consumer price index
75) Which term refers to the total value of all goods and services produced within a given period
by a national economy through domestic factors of production?
A) Standard of living
B) Aggregate output
C) Gross domestic product
D) Gross national product
E) Purchasing power parity
76) Which of the following measures indicates the prices of typical products purchased by
American consumers living in urban areas?
A) GDP per capita
B) Standard of living
C) Consumer price index
D) Purchasing power parity
E) Economic indicators
77) What does productivity measure?
A) The total value of all goods and services produced by a national economy
B) How much a system produces with the resources needed to produce it
C) How much output is necessary to produce a certain level of demand
D) The standard of living relative to purchasing power parity
E) How much gross national product results from inputs of labor
78) What is the economic condition characterized by widespread increased prices without
increased purchasing power?
A) Unemployment
B) Inflation
C) Expansion
D) Deflation
E) Recession
79) What is the condition in an economic system in which the amount of money available and
the number of goods and services produced are growing at about the same rate?
A) Unemployment
B) Stability
C) Deflation
D) Inflation
E) Oversupply
80) Which of the following BEST gives the meaning of the term gross domestic product?
A) Total quantity of goods and services produced by an economic system
B) Total quantity of goods that a country’s citizens can purchase with the currency used in their
economic system
C) Conditions of the economic system in which an organization operates
D) Total value of all goods and services produced within a given period by a national economy
through domestic factors of production
E) Indicators of available goods and services produced within a specific domestic market
81) Which of the following BEST describes nominal GDP?
A) Total quantity of goods and services produced by an economic system
B) Total value of all goods and services produced within a given period by a national economy
through domestic factors of production, measured in current dollars or with all components
valued at current prices
C) Total value of all goods and services produced within a given period by a national economy
regardless of where the factors of production are located
D) Total value of all goods and services produced within a given period by a national economy
through domestic factors of production, adjusted to account for changes in currency values and
price changes
E) Total quantity of goods and services that are imported within a given period of time
82) Which is the BEST explanation for why standard of living only increases through
productivity?
A) The more goods that are available, the lower prices will be.
B) More goods are available without having to come by additional resources.
C) Productivity increases the money supply in an economy.
D) Purchasing power increases when there is more consumer choice.
E) Prices are determined by the standard of living.
83) Why would a government MOST likely be concerned about its country carrying a trade
deficit?
A) A trade deficit means that the country’s productivity is low.
B) A trade deficit means local companies do not have enough competition.
C) A trade deficit ties up money that could be used for economic growth.
D) A trade deficit decreases demand for goods overall.
E) A trade deficit means that consumers do not have enough purchasing power.
84) Which of the following business environments includes the customers, mores, values and
demographic characteristics of the society where the organization functions?
A) Sociocultural
B) Technological
C) Political-legal
D) Fiscal
E) Economic
85) Which of the following is an indication of national economic growth, shown by measuring
aggregate output?
A) Gross domestic product
B) Standard of living
C) Economic indicators
D) Gross national product
E) Real growth rate
86) When gross domestic product increases, what is the outcome for economic growth?
A) Aggregate output will increase
B) The nation will experience a slowdown in growth.
C) Aggregate output will decrease
D) Growth will remain steady when compared to developing nations.
E) Growth will decline based on the value of the national currency.
87) When economists measure gross national product, what is being measured within a specific
time period, regardless of location?
A) The aggregate output
B) The economic growth of the nation
C) The growth of domestic factors of production
D) The growth rate adjusted for inflation
E) The total value of all goods and services
88) Why is gross national product (GNP) considered to be a less valuable indicator of domestic
economic performance than gross domestic product (GDP)?
A) GNP does not consider where the economic performance was located.
B) GNP only considers economic performance within the United States.
C) GNP is not adjusted for inflation.
D) GNP does not consider currency fluctuations at the time of product purchase.
E) GNP does not compare output to population rates.
89) The amount of money that a government owes its creditors is referred to as that country’s
A) GDP.
B) national debt.
C) consumer price index.
D) inflation rate.
E) GNP.
90) Which of the following supports the idea that the prices of similar products in different
countries should be about the same?
A) Standard of living
B) Real growth rate
C) Purchasing power parity
D) Trade deficit
E) Balance of trade
91) Why is it important to calculate purchasing power parity in the global market?
A) It indicates how much consumers will pay for goods and services.
B) It determines interest rates on short-term debt.
C) It identifies how much the nominal GDP should be adjusted.
D) It helps companies determine standards of living across the globe.
E) It indicates the level of disposable income in developed nations.
92) Aggregate output refers to a company’s annual production of goods or services.
93) The United States government manages the collection and spending of its revenues through
monetary policy.
94) Economic indicators help to assess the performance of an economy.
95) The primary measure of growth in the business cycle is inflation.
96) Inflation results in increased purchasing power for the consumer.
97) Tax increases and decreases are a form of fiscal policy.
98) The government can influence the availability of capital through the use of the Federal
Reserve System.
99) Stabilization policy is made up of both monetary and fiscal policy.
100) The main measure of growth in the business cycle is aggregate output.
101) Deflation, an indication that the economy is contracting, is characterized by price
stabilization of goods.
102) If productivity increases, prices charged to consumers will tend to increase as well.
103) The consumer price index is expressed as a percentage of prices as compared to a base
period.
104) In the United States, the Federal Reserve System, which is the nation’s central bank, can
influence the ability and willingness of banks to lend money.
105) Discuss the fiscal and monetary goals of a stabilization policy.
106) Explain the types of policies used by the U.S. government to manage the U.S. economy.
107) What is the difference between an economic recession and an economic depression?
108) How does unemployment affect economic stability?
109) Discuss the balance of trade in the United States and how it affects debt.
110) How does the amount of national debt influence the bond market in the United States?