Final Exam Practice Questions – This is a sample Final Exam. Some of the questions are the same questions that are on the final and others are similar. The answers are come after all of the questions and they tell you where you can learn more about this question in the textbook.
Multiple Choice
Identify the choice that best completes the statement or answers the question. Each Question is worth 3 points
____ 1. Making a trade-off involves
a. / eliminating the opportunity cost.b. / sacrificing one product for another.
c. / determining the value of the next best alternative.
d. / explaining production possibilities.
____ 2. A demand curve shows that the relationship between price and quantity purchased is
a. / inverse. / c. / reversed.b. / linear. / d. / direct.
____ 3. Economists keep track of inflation by calculating the
a. / lagging indicators. / c. / reserve requirements.b. / net domestic product. / d. / consumer price index.
____ 4. One option the Federal Reserve has when it wants to increase the money supply is to
a. / buy government securities. / c. / raise the Federal funds rate.b. / sell government securities. / d. / print money.
____ 5. The main purpose of antitrust laws is to
a. / ensure fair competition. / c. / increase exports.b. / reform interstate trade. / d. / restrict foreign investment.
____ 6. In perfect competition,
a. / large sellers can easily control prices.b. / the workings of supply and demand control the market.
c. / single sellers can dominate the market.
d. / buyers can manipulate price and supply.
____ 7. Under a fractional reserve banking system,
a. / all banks must keep their deposits with the Federal Reserve System.b. / national banks must keep their deposits with the Federal Reserve System.
c. / banks that belong to the Federal Reserve System must keep some of their deposits on hand or deposit them with the Federal Reserve.
d. / banks must pay a fraction of their profits as interest to depositors.
____ 8. A production possibilities curve describes
a. / all of the combinations of goods and services that can be produced with a given amount of resources.b. / costs of various goods and services that the economy can produce.
c. / costs and benefits of various goods and services that the economy can produce.
d. / the most efficient way to produce all goods and services.
____ 9. In response to a drop in aggregate demand, a Keynesian would
a. / increase the money supply. / c. / increase government spending.b. / decrease the money supply. / d. / decrease government spending.
____ 10. If demand for a product is very elastic,
a. / quantity demanded will not equal the quantity supplied.b. / quantity demanded will remain largely unchanged when the price rises.
c. / quantity demanded will rise when the price rises.
d. / quantity demanded will fall when the price rises.
____ 11. Global integration has come about largely because of advances in
a. / transportation. / c. / computer science.b. / telecommunications. / d. / medicine.
____ 12. In which type of economy are the factors of production controlled by the government?
a. / command economy / c. / mixed economyb. / traditional economy / d. / pure market economy
____ 13. The use of government spending and taxation to affect the economy is called
a. / monetary policy. / c. / laissez-faire economics.b. / monetarism. / d. / fiscal policy.
____ 14. An entrepreneur is
a. / a small business incubator.b. / an advertising and marketing specialist.
c. / a person who assumes the risks of starting up a new business.
d. / a stockholder in a corporation who has voting rights at annual meetings.
____ 15. Property tax is an example of
a. / a proportional tax. / c. / the ability-to-pay principle.b. / a regressive tax. / d. / the benefits-received principle.
Completion
Complete each statement.
16. ______consist of statistics used to measure different aspects of the economy.
17. ______is widely used for making large purchases that can be repaid over several months or years.
18. When the price of a currency falls through the action of supply and demand, it is termed ______.
19. The American economy, besides being termed capitalist, is also known as a ______.
20. ______pay a higher rate of interest than ______.
21. ______is a broader definition of the money supply than ______.
22. To help determine if it should expand, a business may make a standard ______.
23. A ______is an association of workers organized to improve wages and work conditions for its members.
24. ______arises because needs and wants are unlimited, but resources are limited.
25. Any money income that a person has left after all taxes have been paid is a person’s ______.
26. Developing nations generally have high rates of ______.
27. The U.S. share of worldwide ______is more than 40 percent.
28. The ______is responsible for controlling the money supply.
29. One of the benefits of owning a home is that houses build up ______, which is the market value of the property minus the mortgage amount owed.
30. When conducting ______, a company gathers, records, and analyzes data about the types of goods and services people want.
Matching
Using Key Terms
Match each item with the correct statement below.
a. / laissez-faire / k. / division of laborb. / barriers to entry / l. / minimum wage law
c. / capital gain / m. / time lags
d. / commercial bank / n. / subsistence agriculture
e. / demand schedule / o. / World Trade Organization (WTO)
f. / public-assistance programs / p. / points
g. / e-commerce / q. / reserve requirement
h. / bait and switch / r. / sole proprietor
i. / factors of production / s. / depression
j. / multinational / t. / medium of exchange
____ 31. major slowdown of economic activity
____ 32. company that does business and has offices and factories in many countries
____ 33. world’s largest trade agreement
____ 34. business transactions conducted over the Internet
____ 35. economic system in which the government minimizes its interference with the economy
____ 36. raising just enough food for a family to take care of its own needs
____ 37. government programs that make payments to citizens based on need
____ 38. institution whose main functions are to accept deposits, lend funds, and transfer funds among banks, individuals, and businesses
____ 39. increase in the value of an asset between the time it is purchased and the time it is sold
____ 40. deceptive advertising practice that attracts consumers with a low-priced product, then tries to sell them a higher-priced product
____ 41. federal law that sets the lowest legal hourly wage that employers can pay
____ 42. land, labor, capital, and entrepreneurship
____ 43. breaking down a job into small tasks performed by different workers
____ 44. table showing quantities demanded at different possible prices
____ 45. periods between the time fiscal policy is enacted and the time it becomes effective
____ 46. fees paid to a lender and computed as a percentage of a loan
____ 47. use of money for exchange for goods or services
____ 48. obstacles to competition that prevent others from entering a market
____ 49. business owned and operated by one person
____ 50. percentage of a bank’s deposits it needs to keep on hand
Final Exam Practice Questions
Answer Section
MULTIPLE CHOICE
1. ANS: B PTS: 1 DIF: Average REF: Page 15
NOT: Learn more about this question in Economics Today and Tomorrow, page 15, and in the Reading Essentials and Notetaking Guide, Chapter 1, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
2. ANS: A PTS: 1 DIF: Average REF: Pages 179-180
NOT: Learn more about this question in Economics Today and Tomorrow, pages 179-180, and in the Reading Essentials and Notetaking Guide, Chapter 7, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
3. ANS: D PTS: 1 DIF: Average REF: Page 343
NOT: Learn more about this question in Economics Today and Tomorrow, page 343, and in the Reading Essentials and Notetaking Guide, Chapter 13, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
4. ANS: A PTS: 1 DIF: Challenging REF: Page 406
NOT: Learn more about this question in Economics Today and Tomorrow, page 406, and in the Reading Essentials and Notetaking Guide, Chapter 15, Section 3. For additional practice, visit this book's Online Learning Center at glencoe.com.
5. ANS: A PTS: 1 DIF: Average REF: Page 246
NOT: Learn more about this question in Economics Today and Tomorrow, page 246, and in the Reading Essentials and Notetaking Guide, Chapter 9, Section 3. For additional practice, visit this book's Online Learning Center at glencoe.com.
6. ANS: B PTS: 1 DIF: Average REF: Page 233
NOT: Learn more about this question in Economics Today and Tomorrow, page 233, and in the Reading Essentials and Notetaking Guide, Chapter 9, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
7. ANS: C PTS: 1 DIF: Challenging REF: Page 400
NOT: Learn more about this question in Economics Today and Tomorrow, page 400, and in the Reading Essentials and Notetaking Guide, Chapter 15, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
8. ANS: A PTS: 1 DIF: Average REF: Page 17
NOT: Learn more about this question in Economics Today and Tomorrow, page 17, and in the Reading Essentials and Notetaking Guide, Chapter 1, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
9. ANS: C PTS: 1 DIF: Challenging REF: Pages 448-449
NOT: Learn more about this question in Economics Today and Tomorrow, pages 448-449, and in the Reading Essentials and Notetaking Guide, Chapter 17, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
10. ANS: D PTS: 1 DIF: Average REF: Pages 182-183
NOT: Learn more about this question in Economics Today and Tomorrow, pages 182-183, and in the Reading Essentials and Notetaking Guide, Chapter 7, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
11. ANS: B PTS: 1 DIF: Average REF: Page 518
NOT: Learn more about this question in Economics Today and Tomorrow, page 518, and in the Reading Essentials and Notetaking Guide, Chapter 20, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
12. ANS: A PTS: 1 DIF: Average REF: Pages 35-40
NOT: Learn more about this question in Economics Today and Tomorrow, pages 35-40, and in the Reading Essentials and Notetaking Guide, Chapter 2, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
13. ANS: D PTS: 1 DIF: Average REF: Page 448
NOT: Learn more about this question in Economics Today and Tomorrow, page 448, and in the Reading Essentials and Notetaking Guide, Chapter 17, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
14. ANS: C PTS: 1 DIF: Average REF: Page 208
NOT: Learn more about this question in Economics Today and Tomorrow, page 208, and in the Reading Essentials and Notetaking Guide, Chapter 8, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
15. ANS: D PTS: 1 DIF: Challenging REF: Pages 431-433
NOT: Learn more about this question in Economics Today and Tomorrow, pages 431-433, and in the Reading Essentials and Notetaking Guide, Chapter 16, Section 4. For additional practice, visit this book's Online Learning Center at glencoe.com.
COMPLETION
16. ANS: Economic indicators
PTS: 1 DIF: Average REF: Page 358
NOT: Learn more about this question in Economics Today and Tomorrow, page 358, and in the Reading Essentials and Notetaking Guide, Chapter 13, Section 5. For additional practice, visit this book's Online Learning Center at glencoe.com.
17. ANS: Installment debt
PTS: 1 DIF: Average REF: Page 88
NOT: Learn more about this question in Economics Today and Tomorrow, page 88, and in the Reading Essentials and Notetaking Guide, Chapter 4, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
18. ANS: depreciation
PTS: 1 DIF: Average REF: Page 474
NOT: Learn more about this question in Economics Today and Tomorrow, page 474, and in the Reading Essentials and Notetaking Guide, Chapter 18, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
19. ANS: free-enterprise system
PTS: 1 DIF: Average REF: Page 44
NOT: Learn more about this question in Economics Today and Tomorrow, page 44, and in the Reading Essentials and Notetaking Guide, Chapter 2, Section 2. For additional practice, visit this book's Online Learning Center at glencoe.com.
20. ANS: Time deposits, savings accounts
PTS: 1 DIF: Average REF: Page 144
NOT: Learn more about this question in Economics Today and Tomorrow, page 144, and in the Reading Essentials and Notetaking Guide, Chapter 6, Section 1. For additional practice, visit this book's Online Learning Center at glencoe.com.
21. ANS: M2, M1
PTS: 1 DIF: Average REF: Page 383
NOT: Learn more about this question in Economics Today and Tomorrow, page 383, and in the Reading Essentials and Notetaking Guide, Chapter 14, Section 3. For additional practice, visit this book's Online Learning Center at glencoe.com.