LESSON 3

1.A budget deficit occurs when ___________.

A. Revenue > Spending

B. Revenue = Spending

C. Spending > Revenue

D. Target > achievement

2.What is the difference between inflation and deflation?

A. Increasing price and decreasing money value

B. Decreasing price and increasing money value

C. Increasing price and increasing money value

D. Increasing money value and increasing price level.

3.Economics helps to understand trends and links between consumers and ___________.

A. producers

B. market behavior

C. consumption

D. production

4.Who calculates the Consumer Price Index on a monthly basis in the USA?

A. Bureau of Economic Analysis

B. Bureau of Census

C. Bureau of Labor Statistics

D. Federal Bureau of Investigation

5.The Consumer Price Index is based on the __________ price of goods and services.

A. mode

B. medium

C. mean

D. neutral

(6 skipped)

7.GDP is used as a way to indicate a country's _______________.

A. standard of living

B. wants and needs

C. healthy life

D. living style

8.The value of money will ______ when there is inflation.

A. increase

B. decrease

C. not change

D. be neutral

9.Who regulates the stock market in the United States?

A. U.S. Federal Trade Commission

B. U.S. Securities and Exchange Commission

C. U.S. Financial Crisis Inquiry Commission

D. Hoover Commission

10.The FDIC guarantees the safety of checking and savings deposits up to _______ per depositor per bank.

A. $249,999

B. $250,000

C. $250,001

D. $250,002

LESSON 4

1.Who owns the factors of production in a pure market economy?

A. Private individuals

B. The government

C. A board of directors

D. Manufacturers

2.Choose the correct answer.

In a market economy low prices indicate ______________.

A. an abundant supply of a product

B. a high demand of a product

C. a low supply of a product

D. scarcity of a product

3.Choose the correct answer.

Individuals own factors of production in a ______________.

A. command economy

B. traditional economy

C. free market economy

D. mixed economy

4.There are three economic questions any economy must answer. Which of the following is NOT one of those questions?

A. What should be produced?

B. When should it be produced?

C. How should it be produced?

D. For whom should it be produced?

5.Choose the correct answer.

Prices are signals of what should be produced in a ___________.

A. mixed economy

B. command economy

C. market economy

D. traditional economy

6.Competition is the driving force in which economic model?

A. A mixed economy

B. A market economy

C. A command economy

D. All of the choices

7.Which of the following is a signal of what to produce and how much to produce?

A. Quality of goods and services

B. Size of goods and services

C. Prices of goods and services

D. Producers opinion

8.In which type of economy does the government control the factors of production and make all decisions about their use?

A. Command economy

B. Demand economy

C. Market economy

D. Mixed economy

9.Choose the correct answer.

An abundant supply of goods and services in a market economy will lead to __________.

A. a rise in prices

B. a drop in prices

C. no change in prices

D. Inflation

10.Choose the correct answer.

A disadvantage of a free market economy is ____________.

A. individuals have career choices

B. individuals can own private property

C. inventions are encouraged

D. unequal distribution of income