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EOCT REVIEW
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EOCT REVIEW

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  1. EOCT REVIEW

  2. 1.Which of the following is a microeconomic calculation? • A. Calculating GDP • B. Calculating the unemployment rate • C. Calculating the interest rate on a loan • D. Calculating the Consumer Price Index

  3. C

  4. 2.Which of the following benefits from the declining value of money during a period of high inflation? • A. a person with a savings account • B. A person with investments • C. a person who has borrowed money • D. A bank that has lent money

  5. C

  6. 3.Which of these is the MOST likely effect of a weak US Dollar? • A. Travel abroad will become more affordable for Americans • B. Goods imported from other countries will become more expensive • C. Foreigners will buy fewer US exports • D. Foreign investment in US businesses will decline

  7. B

  8. 4.If the government’s fiscal policy is designed to end a recession, which action would congress MOST likely take? • A. lower income taxes • B. raise income taxes • C. reduce government spending • D. raise the discount rate

  9. A

  10. 1. In a market economy, the allocation of goods and services is determined MOSTLY by • A. regulations of the federal government • B. decisions of advertisers • C. the needs of individuals • D. the incomes of individuals

  11. D

  12. 2. When people use their resources so that marginal benefits exceed marginal costs, they • A. make rational economic decisions • B. make irrational economic decisions • C. Eliminate the opportunity costs of decisions • D. Fail to use resources efficiently

  13. A

  14. 3. The main function of the Federal Reserve System in the US economy is to • A. establish monetary policy • B. establish fiscal policy • C. establish trade policy • D. balance the federal budget

  15. A

  16. 4. A major problem that both producers and consumers face in market economies is • A. lack of freedom • B. lack of efficiency • C. lack of profit motive • D. lack of economic security

  17. D

  18. 1. Which sentence describes the MOST likely effect of a US quota on Japanese imports? • A. reduced trade barriers for American exports to Japan • B. increased trade barriers for American exports to Japan • C. a positive trade balance • D. more choices and lower prices for American consumers.

  19. B

  20. 2. Which of the following is an example of a capital investment for a retail store? • A. hiring sales clerks and managers • B. renting retail space at a mall • C. Buying ads in a local newspaper • D. buying cash registers and displays

  21. D

  22. 3. In which of the following situations are two nations NOT likely to trade? • A. each nation has an absolute advantage in producing one of the two products both want • B. Each nation has a comparative advantage in producing one of the two products both want • C. Neither nation has an absolute advantage in producing the product • D. Neither nation has a comparative advantage in producing either product

  23. D

  24. 4. When a product is selling at its equilibrium price • A. producers cannot supply enough of it • B. consumers want more of it than is available • C. producers supply as much as consumers demand • D. the price changes from day to day

  25. C

  26. 1.What is one advantage of choosing an insurance policy with a higher deductible, rather than a lower deductible? • A. Lower premiums • B. lower out-of-pocket costs for claims • C. higher coverage limit • D. lower coverage limit

  27. A

  28. 2. When a society invests in education, it improves its standard of living by improving its • A. Labor • B. Capital Goods • C. Human Capital • D. Entrepreneurship

  29. C

  30. 3. Which of the following is a total ban on the import of items from a particular country? • A. Quota • B. Embargo • C. Tariff • D. Standard

  31. B

  32. 4. In which situation might the Federal Reserve buy gov’t securities and lower the discount rate? • A. In a recession • B. When the inflation rate is too high • C. When aggregate demand is too high • D. When the economy is expanding

  33. A

  34. 1. When is it a benefit for workers to have a contract with a cost of living adjustment? • A. During a recession • B. During a depression • C. During an inflationary period • D. During a strike, or work stoppage

  35. C

  36. 2. Which type of business organization has the advantage of specialization but the disadvantage of unlimited liability? • A. Sole Proprietorship • B. Partnership • C. Corporation • D. Oligopoly

  37. B

  38. 3. Which form of credit has the disadvantages of variable interest rates and finance charges compounded monthly? • A. Bank Loans • B. Credit Union Loans • C. Installment Plans • D. Credit Cards

  39. D

  40. 4. If aggregate demand begins decreasing, followed by a decrease in aggregate supply, which stage of the business cycle is the economy entering? • A. A period of expansion • B. A period of slowdown • C. An inflationary period • D. A period of equilibrium

  41. B

  42. 1. Why does every economic decision involve an opportunity cost? • A. Because resources are scarce and wants are unlimited • B. Because few decisions have a marginal benefit • C. Because prices in a market economy are always too high • D. Because trade-offs are impossible to make in rational decisions

  43. A

  44. 2.When people invest in stocks, rather than bonds, what trade-off are they making? • A. Lower risks for lower returns • B. Higher risks for higher returns • C. Lower risks for higher returns • D. Higher risks for lower returns

  45. B

  46. 3. The shampoo market has a structure of monopolistic competition. What is one important feature of this market structure? • A. One large firms controls prices in the market • B. A few large firms fix prices and control the market • C. A few large firms are interdependent and engage in frequent price wars • D. Firms with many similar products depend on product differentiation, or branding

  47. D

  48. 4. Keisha deposited $400 in a savings account that pays a simple interest of 3.5%/year. If she made no other deposits or withdrawals, how much interest had she earned at the end of the 3 years. • A. $14 • B. $28 • C. $42 • D. $50

  49. C

  50. 1. If a nation’s imports for one year are worth $8.6 billion and its exports are worth $8.5 billion the same year, that nation definitely has • A. A trade deficit • B. A trade surplus • C. A negative balance of payments • D. A positive balance of payments