Economics Flashcards
Unlike command economies, market economies depend primarily on which of the following?
Entrepreneurial ventures
In the market for dog toys, the equilibrium price has risen while the equilibrium quantity has fallen. All other things being equal, which of the following scenarios could explain this change?
A major dog toy manufacturer halted production in the months before the changes.
Which of the following is characteristic of oligopoly in a particular sector of an economy?
A condition of limited competition among producers
The barriers to competition entry that exist under a monopoly are most likely to lead to which of the following market conditions?
Monopolists have the ability to maintain economic profit over the long run.
Assume the market for widgets is composed of many firms selling identical products at the same market price. The widget market is an example of which market structure?
Perfect competition
Which of the following scenarios represents a trade-off between two different factors of production?
A manufacturing business holds off on hiring new workers in order to pay for factory equipment upgrades.
Physical capital is a factor of production. Which of the following is an example of physical capital used at an automobile factory?
Machinery at the factory used to attach wheels to the automobiles
Which of the following is a key role of central banks in national economies?
Influencing interest rates to slow inflation
Assume that the United States is facing inflation of 8% while the actual unemployment rate is lower than the natural rate of unemployment. Which of the following policy combinations is most likely to return the United States economy to long-run equilibrium?
Increasing personal income taxes and raising the discount rate
Which of the following would be included in the calculation of gross domestic product (GDP) in the United States for 2022 ?
A state government spending money on infrastructure repairs in 2022
An increase in real interest rates in the United States will most likely lead to which of the following?
A decrease in the price of previously issued United States government bonds
Which of the following measures is intended to promote economic mobility?
Higher education subsidies
Which of the following policies is most likely to reduce socioeconomic inequalities in a country?
Requiring and supplying a free education for everyone in the country up through the age of 18
Use the information in the table to answer the question that follows.
Daily Production Capacity by Country
Bicycles Computers Frankalia 10,000 30,000 Ottland 20,000 40,000
The preceding table shows the maximum number of either bicycles or computers that can be produced by the fictional countries of Frankalia and Ottland with equivalent resources.
Based on the information provided, which of the following is true of the relationship between Frankalia and Ottland?
Frankalia would optimally gain from trade if it specialized in the production of computers and traded computers for bicycles with Ottland.
The United States and the United Kingdom are trade partners. In 2009, the United States trade deficit with the United Kingdom was substantially lower than it was in 2008. Which of the following scenarios would most likely lead to such a decrease?
An appreciation of the United Kingdom’s currency, the pound, relative to the United States dollar on the foreign exchange market
