Economics Study Quiz #2

43 Questions | Total Attempts: 206

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Economics Study Quiz #2

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Questions and Answers
  • 1. 
    The personal distribution of income refers to the
    • A. 

      Division of income between personal taxes, consumption expenditures, and savings

    • B. 

      Division of income on the basis of industry sources, for example, agriculture, transportation, and mining

    • C. 

      Distribution of income to basic resource classes, that is, wages, rents, interest, and profits

    • D. 

      Way income is distributed among specific households or spending units

  • 2. 
    The largest functional share of the national income consists of
    • A. 

      Wages and salaries

    • B. 

      Interst and rental income

    • C. 

      Proprietors' income, that is, the income of unincorporated businesses

    • D. 

      Corporate profits

  • 3. 
    The distribution of income among individual households is known as
    • A. 

      Income differentials

    • B. 

      The personal distribution of income

    • C. 

      The functional distribution of income

    • D. 

      The concentration ratio

  • 4. 
    Listed in descending order of relative size, households divide their total incomes among
    • A. 

      Consumption expenditures, savings, and taxes

    • B. 

      Savings, consumption expenditures, and taxes

    • C. 

      Consumption expenditures, taxes, and savings

    • D. 

      Taxes, consumption expenditures, and savings

  • 5. 
    Households in the aggregate use the largest share of their total income to
    • A. 

      Pay taxes

    • B. 

      Consume

    • C. 

      Save

    • D. 

      Buy capital goods

  • 6. 
    The majority of personal consumption expenditures go to purchase
    • A. 

      Nondurable goods

    • B. 

      Durable goods

    • C. 

      Capital goods

    • D. 

      Services

  • 7. 
    In economics, a group of firms that produce identical or similar products is called a(n)
    • A. 

      Industry

    • B. 

      Plant

    • C. 

      Conclomerate

    • D. 

      Firm

  • 8. 
    An industry is best defined as a group of firms that
    • A. 

      Compete for labor

    • B. 

      Product identical or similar products

    • C. 

      Use identical production techniques

    • D. 

      Are located in the same city or geographic area

  • 9. 
    Which form of business enterprise accounts for the largest number of firms in the United States?
    • A. 

      Corporations

    • B. 

      Proprietorships

    • C. 

      Partnerships

    • D. 

      Cooperatives

  • 10. 
    Which form of business enterprise accounts for the largest proportion of total output?
    • A. 

      Corporations

    • B. 

      Proprietorships

    • C. 

      Partnerships

    • D. 

      Cooperatives

  • 11. 
    The three basic legal forms of business enterprise are
    • A. 

      Monopolists, competitors, and enterprises

    • B. 

      Proprietorships, partnerships, and corporations

    • C. 

      Vertical, horizontal, and conglomerate corporations

    • D. 

      Conglomerates, multinationals, and partnerships

  • 12. 
    An owner's liability for the debts of a business is
    • A. 

      Limited in a corporation to the assets of preferred stockholders

    • B. 

      Limited in a corporation to the assets of bondholders

    • C. 

      Limited to the owner's investment in a single proprietorship

    • D. 

      Unlimited in a partnership

  • 13. 
    Limited liability means that
    • A. 

      Creditors have no legal claim on the personal assets of a proprietor

    • B. 

      Corporations cannot be sued

    • C. 

      Creditors have no legal claim on the personal assets of a corporate stockholder

    • D. 

      Corporations have a legal life independent of their owners and managers

  • 14. 
    Most output in the United States is produced by
    • A. 

      Cooperatives

    • B. 

      Partnerships

    • C. 

      Sole proprietorships

    • D. 

      Corporations

  • 15. 
    The largest category for Federal spending is for
    • A. 

      Agriculture and rural development

    • B. 

      Science, space, and technology

    • C. 

      Pensions and income security

    • D. 

      Highway construction

  • 16. 
    Which of the following is NOT an important source of revenue for the Federal government?
    • A. 

      Corproate income taxes

    • B. 

      Property taxes

    • C. 

      Payroll taxes

    • D. 

      Personal income taxes

  • 17. 
    The United States' most important trading partner in terms of dollar volume is
    • A. 

      Mexico

    • B. 

      Canada

    • C. 

      Germany

    • D. 

      China

  • 18. 
    In terms of absolute volumes of imports and exports, the world's leading trading nation is
    • A. 

      France

    • B. 

      Japan

    • C. 

      The United States

    • D. 

      South Korea

  • 19. 
    In recent years the United States has
    • A. 

      Exported more goods and services than it has imported

    • B. 

      Imported more goods and services than it has exported

    • C. 

      Realized an approximate balance in its imports and exports

    • D. 

      Experienced a falling absolute dollar amount of imports and a rising absolute dollar amount of exports

  • 20. 
    The major goods exports of the United States (in dollar volume) are
    • A. 

      Chemicals, consumer durables, agricultural products, and semiconductors

    • B. 

      Petroleum, automobiles, clothing, and household appliances

    • C. 

      Iron and steel, clothing, beef, and sugar

    • D. 

      Aircraft, glassware, television sets, and furniture

  • 21. 
    The major goods imports of the United States (in dollar volume) are
    • A. 

      Chemicals, consumer durables, aircraft, and grain

    • B. 

      Petroleum, automobiles, household appliances, and computers

    • C. 

      Iron and steel, clothing, electronic equipment, and sugar

    • D. 

      Aircraft, paper products, television sets, and furniture

  • 22. 
    Depreciation of the dollar will
    • A. 

      Increase the price of U.S. imports, but decrease the prices of U.S. exports

    • B. 

      Decrease the price of U.S. imports, but increase the prices of U.S. exports

    • C. 

      Increase the price of both U.S. imports and exports

    • D. 

      Decrease the price of both U.S. imports and exports

  • 23. 
    Import quotas are
    • A. 

      Maximum limits on the quantity or total value of specifc products imported to a nation

    • B. 

      Excise taxes or duties placed on imported products

    • C. 

      Licensing requirements, unreasonable quality standards, and the like designed to impede imports

    • D. 

      Government payments to domestic producers to reduce the world prices of exported goods

  • 24. 
    The Smoot-Hawley Act
    • A. 

      Bound the world's nations to a gradual process of tariff reduction

    • B. 

      Established very high tariffs on goods imported to the United States

    • C. 

      Exempted American exporters from the Sherman Antitrust Act

    • D. 

      Established the reciprocal trade agreements program

  • 25. 
    The Reciprocal Trade Agreements Act
    • A. 

      Exempted American exporters from the Sherman Antitrust Act

    • B. 

      Provided technological assistance to developing countries

    • C. 

      Brough about considerable reductions in American trade barriers

    • D. 

      Eliminated American subsidies to agricultural exports

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