Practice EOC #2
starstarstarstarstarstarstarstarstarstar
by Suzanne Morse
| 25 Questions
1
1
The basic economic problem facing ALL societies is
too much government control.
scarcity of resources.
lack of technology.
lack of public services.
2
1
Which sentence describes a rational economic decision?
It has no opportunity costs.
It has no voluntary exchanges.
Its marginal benefits equal or exceed its marginal costs.
It has no emotional benefits.
3
1
Pablo starts a taxi cab business. He buys three taxi cabs, hires three drivers, and adverstises in the local newspaper. Which of his actions represents capital investment?
renting a garage
buying three taxi cabs
hiring three drivers
advertising in the newspaper
4
1
Which government decision below demonstrates possible effects of deregulation?
The government requires seat belts on all cars, resulting in safer cars for consumers but high costs for producers.
The government controls the prices the utilities can charge, resulting in declining service from utility companies.
The government forbids job discrimination, resulting in fairer hiring practices.
The government stops controlling the fares and routes of airlines, resulting in increased competition and lower fares.
5
1
Which sentence BEST describes the types of skills and personal qualities needed in the workplace?
Every job requires a completely different set of skills.
There is very little agreement about the skills needed in the workplace.
There are some skills that apply to many different kinds of work.
The desire to work hard is the only ability required in most jobs.
6
1
In which situation might the Federal Reserve buy government bonds/securities, or lower its discount rate?
in a recession
in the middle of an expansionary phase
when inflation is too high
when aggregate demand is too high
7
1
Patents are important in a market economy because
governments depend on fees from inventors and drug companies
entrepreneurs are motivated by the chance to earn profits
corporations require patents in order to begin operation
sole proprietors require patents in order to begin operation
8
1
How are NAFTA, the EU, and ASEAN similar?
Each increases trade barriers among neighboring nations.
Each decreases trade barriers among neighboring nations.
Each promotes free trade among member nations.
Each promotes protectionist policies against all nations of the world.
9
1
A person who favors a protectionist trade policy would MOST likely
support free trade
support a reduction in tariffs
call for an end to quotas
call for supporting American industries
10
1
The Federal Reserve System is made up of
the president, Congress, and the Cabinet.
the Internal Revenue Service and the Office of Management and Budget
12 banks in different regions of the US and the Federal Open Market Committee
all banks, savings and loans, and credit unions in the United States.
11
1
Use the supply & demand graph above to answer the question.

How much orange juice will be supplied and demanded at the market clearing price?
5 million gallons will be supplied; 10 million gallons will be demanded
10 million gallons will be supplied; 5 million gallons will be demanded
5 million gallons will be supplied; 5 million gallons will be demanded
10 million gallons will be supplied; 10 million gallons will be demanded
12
1
Which of the following are usually the BEST predictors of financial and career sucess?
high school grades and extracurricular activities
athletic achievement and personal popularity
education/training level and workplace skills
level of personal ambition and determination to succeed at any cost
13
1
When the value of a nation's exports is greater than the value of its imports, that nation definitely has
a trade surplus
a trade deficit
a positive balance of payments
a negative balance of payments
14
1
Refer to the production possibilities curve above to answer the question.

A country is currently investing in new technology for all its businesses. What change in the graph shows how this investment will affect production?
a shift from curve X to curve Y
a shift from curve Y to curve X
a movement from point A to point B
a movement from point B to point A
15
1
If you switched to an insurance policy with a higher deductible, you could probably expect
a higher premium.
a lower premium.
a higher coverage limit.
no coverage limit.
16
1
Use the table above to answer the question.

Based on the data in the table, which conclusion is MOST likely?
The two nations will not trade either shoes or phones
US will export both shoes and phones to Brazil
US will export shoes to Brazil; Brazil will export phones to US
US will export phones to Brazil; Brazil will export shoes to the US
17
1
Use the table above to answer the question.

Which currency appreciated in value from 2006 to 2007?
the Euro
the US dollar
both
neither
18
1
If aggregate demand and real GDP are slowly beginning to rise, and the unemployment rate is just beginning to fall, which conclusion is MOST likely?
The economy is in a recovery phase.
The economy is facing a slowdown.
There are serious risks of high inflation.
Aggregate supply is sharply decreasing.
19
1
How is monetary policy different from fiscal policy?
Monetary policy involves the money supply, while fiscal policy involves government taxing and spending decisions.
Fiscal policy involves the money supply, while monetary policy involves government taxing and spending decisions.
Fiscal policy involves specific steps taken to carry out the overall monetary policy.
They are the same.
20
1
If the government's fiscal policy involves stopping high inflation, which choices should Congress consider?
either cut taxes or increase government spending
either increase taxes or cut government spending
either lower the discount rate or sell bonds
either raise the discount rate or buy bonds
21
1
Use the table to answer the question.

The data shown in the table is a good example of
a proportional tax
a regressive tax
a progressive tax
an excise tax
22
1
When a society invests in education, it improves its standard of living by improving its
capital goods
human capital
labor
land
23
1
Which one of the following groups benefits from high rates of inflation?
people who have borrowed money
people who have savings in banks
people who have investments
bankers who have lent money
24
1
What is the relationship between a budget deficit and the national debt?
They are the same.
The national debt makes a budget deficit more likely.
A budget deficit adds to size of the national debt.
There is no connection between a budget deficit and the national debt.
25
1
Saving money for expensive things you want but do not need is a rational economic decision because
there are no opportunity costs involved in saving.
you sacrifice a small benefit now for a greater benefit later.
the rewards of saving are intellectual rather than emotional.
it is more rational to focus on short-term goals, rather than long term goals.
Add to my formatives list

Formative uses cookies to allow us to better understand how the site is used. By continuing to use this site, you consent to the Terms of Service and Privacy Policy.