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PBM Test 2 Review

Which of the following is true during Prosperity?

B - Consumer sales are weak

A - GDP falls rapidly

C - Most people who want to work are working

D - Businesses lower production

C - Most people who want to work are working

If GDP per capita is increasing, what does it mean?

B – The economy is in recession

A – The economy is growing

C – The economy is shrinking

D – The economy is stagnant

A – The economy is growing

Which of the following is true about inflation?

B - During inflation, the buying power of the dollar decreases.

A - It is a problem that most nations have to cope with.

C - It is an increase in the general level of prices.

D - All of these are true about inflation.D - All of these are true about inflation.

Which of the following would NOT be counted in GDP?

B – Business spending for equipment

A – Intermediate goods used in manufacturing

C - Consumer spending for housing

D – None of these would be counted in GDP

A – Intermediate goods used in manufacturing

Which of the following would be counted in GDP?

B – Consumer spending for housing

A – Business spending for equipment

C - Government spending to pay employees

D - All of these would be counted in GDPD - All of these would be counted in GDP

Deflation usually occurs during which economic period(s)?

B – Depression

A – Recession

C – Prosperity

D – Both Recession and DepressionD – Both Recession and Depression

Which of the following are examples of jobs that have been created in our region because of world trade?

B – Improvements to roads

A – New railways

C – New port facilities

D – All of these examples are correctD – All of these examples are correct

What is the correct order of the phases of the Business Cycle?

B – Prosperity, Depression, Recession, Recovery

A – Prosperity, Recovery, Recession, Depression

C – Recession, Prosperity, Depression, Recovery

D – Prosperity, Recession, Depression, RecoveryD – Prosperity, Recession, Depression, Recovery

Limits that a government sets on the quantity of a product that can be imported or exported are called

B - Quotients

A - Embargoes

C - Quotas

D – Tariffs

C - Quotas

The willingness and ability of a supplier to produce a product is

B – A Substitute

A – Supply

C – A Complement

D – Demand

A – Supply

Which of the following is true about deflation?

B – During deflation, the buying power of the dollar decreases.

A – It is an decrease in the general level of prices.

C – It is a problem that most nations have to cope with.

D – All of these are true about deflation.

A – It is an decrease in the general level of prices.

How is GDP per capita calculated?

B – Divide working population by GDP

A – Divide GDP by total population

C – Divide total population by GDP

D – Divide GDP by working population

A – Divide GDP by total population

Which of the following can affect supply?

B – Changes in desire for a product

A – Cost of production

C – Changes in income

D – All of these can affect supply

A – Cost of production

What is the point at which the supply and demand curves cross?

B – Equilibrium

A – Balance

C – Equilateral

D – Fair Trade

B – Equilibrium

Which of the following is true during a depression?

B – Unemployment is high for a prolonged period of time

A – Consumer sales are weak

C – GDP falls rapidly

D – All of these are true during a depressionD – All of these are true during a depression

Which of these are reasons a country would set quotas?

B - To control supply and keep prices at a certain level

A - To express displeasure at another country’s policies

C - To protect its own industries

D - All of these are reasons a country would set quotasD - All of these are reasons a country would set quotas

What is the value of money of one country expressed in terms of the money of the other country?

B - Exchange Rate

A - Dollar Calculator

C - Money Ratio

D - Balance of Payments

B - Exchange Rate

If a substitute product is offered at a lower price, what will happen to demand for the initial product?

B – Demand for the initial product will not be affected

A – Demand for the initial product will go down

C – Demand for the initial product will go up

D - Demand for the initial product will not go down

A – Demand for the initial product will go down

Which of the following is true during a recovery?

B – Businesses fail

A – Consumer sales are weak

C – GDP begins to rise again

D – All of these are true during a recoveryD – All of these are true during a recovery

What is the total dollar value of all final goods and services produced in a country during one year?

B - GDP (Gross Domestic Product) per capita

A – GDP (Gross Domestic Product)

C - TDP (Total Domestic Product) per capita

D - TDP (Total Domestic Product)

A – GDP (Gross Domestic Product)

Which of the following are benefits of world trade?

B - Improvement in product quality

A – Political alliances with other countries

C - Greater variety of goods and services

D - These are all benefits of world tradeD - These are all benefits of world trade

Which of these are issues with world trade?

B – Trade barriers

A – Impacts of exchange rates on trade

C – Increased economic interdependence among countries

D – All of these are issues with world tradeD – All of these are issues with world trade

Which of the following can affect demand?

B – Changes in the prices of related products

A – Changes in desire for a product

C – Changes in income

D – All of these can affect demandD – All of these can affect demand

If prices increased 10 percent during the last year, how much would items that cost $300 last year cost now?

B - $297

A - $330

C - $303

D - $270

A - $330

Which of these totally stops the export or import of a product?

B – Embargoes

A – Quotients

C – Tariffs

D – Quotas

B - Embargoes

The willingness and ability of a person to buy a product is

B – supply

A – demand

C – a complement

D – a substitute

A - demand

Taxes that a government places on certain imported products are called

B – Tariffs

A – Embargoes

C – Quotients

D – Quotas

B – Tariffs

Which of the following are problems of world trade?

B – Decreased tax revenue from loss of manufacturing

A – Political alliances with other countries

C – Greater variety of goods and services

D – These are all problems of world trade

B – Decreased tax revenue from loss of manufacturing