Principles Of Economics Pretest

19 Questions | Total Attempts: 8232

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Principles Of Economics Pretest

This test is based on the ACEE's survey that produced the most common misconceptions concerning economics. By the end of the course, students will understand all the concepts touched on here. Read the following questions carefully and take your time. So, let's try out the quiz. All the best!


Questions and Answers
  • 1. 
    For most people, the largest protion of their personal income comes from:
    • A. 

      Rent paid to them on their property

    • B. 

      Interest on stocks and bonds

    • C. 

      Wages and salries from their jobs

    • D. 

      The federal and state governments.

  • 2. 
    • A. 

      Only the person renting the apartment

    • B. 

      Only the landlord

    • C. 

      Both the renter and the landlord

    • D. 

      Mortgage companies

  • 3. 
    When deciding which of two items to purchase, you should always:
    • A. 

      Choose after comparing costs and benefits of both items

    • B. 

      Choose the item that costs less

    • C. 

      Chosse the item with the greatest benefits

    • D. 

      Choose the item that you want

  • 4. 
    If the price of beef doubled and the price of poultry stayed the same, people would most likely buy:
    • A. 

      Less poultry and more beef

    • B. 

      More poultry and less beef

    • C. 

      The same amount of pultry and beef

    • D. 

      Less poultry and beef

  • 5. 
    In the United States, who determines what goods and services will be porduced?
    • A. 

      Producers and the government

    • B. 

      Government

    • C. 

      Consumers

    • D. 

      Producers, consumers, and government

  • 6. 
    • A. 

      Reduce the use of those resources

    • B. 

      Try to get more resources

    • C. 

      Focus on their most abundant resource

    • D. 

      Make choices about how to use resources

  • 7. 
    • A. 

      Lower jean prices and more jeans bought

    • B. 

      Higher jean prices and fewer jeans bought

    • C. 

      No change

    • D. 

      Lower jean prices and fewer jeans bought

  • 8. 
    A person who starts a business to produce a new product is known in the marketplace as:
    • A. 

      A bureaucrat

    • B. 

      A manager

    • C. 

      An entrepreneur

    • D. 

      A Chief Executive Officer (CEO)

  • 9. 
    Which of the following would most likely accelerate innovation in the computer industry?
    • A. 

      Taxing all new inventions in the industry

    • B. 

      Investing more into research and development

    • C. 

      Increased government regulation of the industry

    • D. 

      Greater use of PCs by individuals

  • 10. 
    If interest rates charged by banks decreased, business would be most likely to:
    • A. 

      Increase investment spending

    • B. 

      Decrease the number of employees

    • C. 

      Increase their prices

    • D. 

      See an increase in their stock prices

  • 11. 
    The stock market is an example of an institution that exists to help people achieve their goals. The existence of the stock market:
    • A. 

      Helps predict stock prices

    • B. 

      Helps predict corporate earnings

    • C. 

      Brings together buyers and sellers of stocks

    • D. 

      Generally increases the prices of stocks

  • 12. 
    • A. 

      It holds its value during times of inflation

    • B. 

      It makes saving more difficult

    • C. 

      It makes buying and selling easier

    • D. 

      It doesn't hold its value

  • 13. 
    Which of the following are most likely to be helped by inflation?
    • A. 

      Banks that loaned money at a fixed interest rate

    • B. 

      People living on fixed incomes

    • C. 

      People who borrowed money at fixed interest rates

    • D. 

      Businesses

  • 14. 
    Assume that one US Dollar is the same as 10 Japanese Yen. If the Dollar becomes worth 15 Yen, which of the following occurs?
    • A. 

      The price of all japanese goods increases

    • B. 

      Japan will import more goods into the US

    • C. 

      Americans in Japan will see that their dollar will buy more goods and services

    • D. 

      America will increase its exports to Japan

  • 15. 
    If your city sets a maximum amount that landlords can charge for rent, what is the most likely result?
    • A. 

      Available apartments will equal the number of people who want to rent them

    • B. 

      There will be fewer apartments than people who want to rent them

    • C. 

      There will be more apartments than people who want to rent them.

    • D. 

      No change.

  • 16. 
    Whihc of the following methods for reducing pollution would most economists support?
    • A. 

      Increased regulation on polluting companies

    • B. 

      Eliminating all air pollution

    • C. 

      Reducing air pollution until the cost of further reductions outweighs the benefits

    • D. 

      Government sponsored "green" automobiles

  • 17. 
    If the United States stopped importing cars from Japan, who would most likely benefit?
    • A. 

      Japanese automakers

    • B. 

      American automakers

    • C. 

      American consumers

    • D. 

      Japanese consumers

  • 18. 
    If real Gross Domestic Product (GDP) has increased, which of the following has also definitely increased?
    • A. 

      The amount of final goods and services produced

    • B. 

      The number of resources used to produce goods and services

    • C. 

      Prices of final goods and services

    • D. 

      Demand for final goods and services

  • 19. 
    When a government's expenses for a year are hihger than its revenue for that year, the difference is know a/an
    • A. 

      Surplus

    • B. 

      Shortage

    • C. 

      Budget deficit

    • D. 

      National debt