KEYWORDS:
BLOOM’S: Knowledge
71. If California were a separate economy, it would be the ____ largest economy on earth.
a.
second
b.
third
c.
fifth
d.
eighth
ANSWER:
POINTS:
DIFFICULTY:
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KEYWORDS:
BLOOM’S: Knowledge
72. Capitalism and free enterprise are common, and the United States
a.
has just begun to move in that direction after years of central planning.
b.
has gone further in that direction than almost any other country.
c.
is becoming more “free,” but is not as capitalistic as many others.
d.
is considering a major change to “free up” its economy as many others have.
e.
is leading the move toward greater central planning and control.
ANSWER:
POINTS:
DIFFICULTY:
TOPICS:
KEYWORDS:
BLOOM’S: Comprehension
73. Government ownership of property and resources in the United States is
a.
about as common as it is in European countries.
b.
widespread; the United States is a leader in the amount of government ownership of resources.
c.
relatively rare; the United States is mostly privatized.
d.
rare, but has been increasing rapidly as the United States catches up to other countries.
ANSWER:
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DIFFICULTY:
74. Gross domestic product is
a.
the largest industry in an economy.
b.
the money value of all final goods and services produced in a year.
c.
the volume of goods and services which are subject to international trade.
d.
goods and services produced by private companies.
e.
non-market production of goods and services.
75. The United States produces ____ of what it consumes, and consumes ____ of what it produces.
a.
little, little
b.
little, most
c.
most, little
d.
most, most
76. In 2013, about what percentage of goods and services sold in the United States was imported?
a.
5%
b.
16%
c.
22%
d.
88%
77. Imports from China represent ____ of total U.S. imports.
a.
less than 20%
b.
approximately 40%
c.
approximately 60%
d.
more than 80%
78. Which of the following is the best definition of openness?
a.
The average of imports expressed as a share of GDP.
b.
The average of goods traded in markets expressed as a share of GDP.
c.
The average of imports and exports expressed as a share of GDP.
d.
The average trade balance expressed as a share of GDP.
e.
The average of exports expressed as a share of GDP.
79. How does the United States compare to other advanced, industrialized economies on the issue of openness?
a.
It is completely closed.
b.
It is one of the less open of them.
c.
It is about average in openness.
d.
It is one of the more open of them.
e.
It is the most open of them.
80. As of 2013, annual imports to the U.S. were approximately ____ and annual exports from the U.S. were
approximately ____.
a.
$0.6 trillion; $1.5 trillion
b.
$2.2 trillion; $0.7 trillion
c.
$2.7 trillion; $2.3 trillion
d.
$1.5 trillion; $2.0 trillion
e.
$2.0 trillion; $2.0 trillion
81. Which of the following is the most closed economy?
a.
the Netherlands
b.
the United States
c.
Germany
d.
Russia
e.
Canada
82. Which of the following is the most open economy?
a.
Germany
b.
the Netherlands
c.
the United States
d.
Japan
e.
Canada
83. Which of the following is the most closed economy?.
a.
Germany
b.
Canada
c.
Mexico
d.
the United States
84. Gross Domestic Product in 2013 was almost five times larger than it was in 1960 but it is important to note that
a.
none of the growth represented more output.
b.
measurement of output omitted any effect of inflation.
c.
the population grew substantially over the same time period.
d.
graphs of output were unable to display such growth.
85. According to the data on real U.S. GDP,
a.
economic growth has been irregular, with periodic downturns.
b.
economic growth has been consistent, with few downturns.
c.
economic growth has been extremely rapid, but with major collapses.
d.
economic growth has been elusive, but downturns have been eliminated.
86. Economic progress is best measured by
a.
the growth rate of prices over time.
b.
the growth rate of GDP per capita
c.
the amount of time it takes a worker to work to afford certain goods and services.
d.
the growth rate in the population.
87. Along with changes in the level of economic activity, measured by GDP, what other economic variable tends to rise
and fall as a consequence?
a.
precipitation
b.
regulation
c.
circulation
d.
unemployment
88. Why does unemployment tend to change when the level of output changes?
a.
Persons wish to buy things, and if output falls, people need to work less to earn the income to buy the smaller
output.
b.
Labor is an input, and if output falls, employers need fewer workers to make it, so the employment falls.
c.
When output rises, persons are more interested in buying, and will work more to earn the income to buy
things.
d.
Persons face the option of buying or working, so that when they do more of one, the other necessarily falls.
e.
When companies replace workers with machines, output rises, and people take time off from work to buy
before returning to employment.
89. Per capita GDP can be defined as
a.
GDP per working person.
b.
GDP per unit of capital.
c.
GDP per person.
d.
GDP per unit of unemployment.
90. Economic fluctuations are defined as
a.
alternating periods of significant GDP growth and decline.
b.
events only encountered in developing countries.
c.
periods of stable economic growth.
d.
alternating periods of unemployment falling above and below zero.
91. A recession can best be defined as a period of time in which
a.
total output of the economy falls.
b.
total output of the economy rises very slowly.
c.
total unemployment falls.
d.
total international trade fails to rise.
e.
Both a and c
92. Which of the following is true about the United States?
a.
There has only been one recession in U.S. history.
b.
There have been recessions every couple of years throughout U.S. history.
c.
Recessions have never occurred in the United States.
d.
Recessions have occurred periodically in U.S. history.
e.
Recessions in the United States have generally been worse than in other countries.
93. What is the approximate number of Americans who have jobs?
a.
144 million
b.
200 million
c.
290 million
d.
310 million
e.
3.1 billion
94. One of the most important changes in the composition of the labor force in the United States has been
a.
the major increase in the number of women who work outside the home.
b.
the drop in the number of men who only work part-time.
c.
the steady decline in the number of women who work.
d.
the increase in the ratio of male workers to female workers.
e.
the major increase in the number of men who work away from the home or farm.
95. Which of the following groups has had declining labor force participation over the last 30 years?
a.
Women
b.
Men
c.
Teenagers
d.
Americans
96. In the United States, most workers
a.
work for government of some sort.
b.
produce raw materials for manufacturing.
c.
work in agriculture and farming.
d.
produce services rather than goods.
97. Most American workers
a.
are employed in the goods-producing sector.
b.
are employed by government.
c.
are employed in the service-producing sector.
d.
are employed in the agricultural sector.
98. Which of the following areas employed more workers in 2013?
a.
educational and health services
b.
business and professional services
c.
retail trade
d.
manufacturing companies
99. All industrialized countries have become “service economies.” Which factor helps explain this shift?
a.
Trade unionism and failure of the manufacturing sector to grow.
b.
Information age and labor saving innovation in manufacturing.
c.
Non availability of industrial labor with required skills.
d.
Absence of competition in the service sector.
100. Which factor of production accounts for the highest percentage of the income that the production process generates
in the US?
a.
Capital
b.
Natural Resource
c.
Land
d.
Labor
101. The portion of income which is earned in the form of wages for labor is about
a.
15%
b.
35%
c.
51%
d.
60%
102. The average hourly wage (excluding benefits) in the United States is currently
a.
$7.50
b.
$9.95
c.
$15.00
d.
$20.00
103. For those workers who are given fringe benefits such as health insurance and pensions, the additional income this
amounts to over and above the average hourly wage can be as much as (for some workers)
a.
10–12%
b.
30–40%
c.
51-62%%
d.
70% or more
104. How do the wages in the United States compare to those in northern Europe?
a.
U.S. wage rates are higher than those of all northern European nations.
b.
Northern Europe’s average wage rates are higher.
c.
U.S. wage rates are higher than those in Germany and the Netherlands.
d.
they are similar.
105. The payments to owners of capital include
a.
interest and profits.
b.
debt and taxes.
c.
wages and salaries.
d.
expenses and bonuses.
e.
All of the above are correct.
106. Most Americans
a.
have accurate perceptions of the level of corporate profits.
b.
underestimate corporate profits.
c.
overestimate corporate profits.
d.
believe that corporations earn zero profit.
107. Consumer spending accounts for what share of GDP?
a.
20%
b.
40%
c.
70%
d.
90%
108. The typical American family spends about ____ percent of its budget on goods, and the remainder on services.
a.
22
b.
34
c.
68
d.
74
109. Nonconsumption spending accounts for roughly what percent of total output of goods and services?
a.
20%
b.
30%
c.
40%
d.
60%
110. The United States has approximately
a.
80,000 businesses.
b.
5.1 million businesses.
c.
12.5 million businesses.
d.
28.million businesses.
111. According to Robert Reich, secretary of Labor in the Clinton administration,
a.
the identity of American companies is clear, and laws should be written accordingly.
b.
foreign companies are clearly different from American companies.
c.
multinational companies have clear bases of operations, which form their identity.
d.
it is almost impossible to define the nationality of a multinational company.
e.
identifying the country of origin of a product is almost impossible, but essential for proper regulation.
112. In the United States each year, approximately
a.
50% of all businesses fail.
b.
25% of all businesses fail.
c.
10% of all businesses fail.
d.
5% of all businesses fail.
113. A firm that does business all over the world is called a(n)
a.
multinational corporation.
b.
international conglomerate.
c.
competitive corporation.
d.
government-owned business.