Unit 5 Economics EOC Review. Question 1 A recession is (a) a period of steady economic growth. (b) a prolonged economic expansion. (c) an especially long.

Unit 5

Economics EOC Review

Question 1

A recession is

• (a) a period of steady economic growth.• (b) a prolonged economic expansion.• (c) an especially long or severe economic

contraction.• (d) a prolonged economic contraction.

Question 1

A recession is

• (a) a period of steady economic growth.• (b) a prolonged economic expansion.• (c) an especially long or severe economic

contraction.• (d) a prolonged economic contraction.

Question 2

When the economy is working properly, what is the unemployment rate?

• A. 0 to 3 percent• B. 8 to 10 percent• C. 4 to 6 percent• D. 10 to 12 percent

Question 2

When the economy is working properly, what is the unemployment rate?

• A. 0 to 3 percent• B. 8 to 10 percent• C. 4 to 6 percent• D. 10 to 12 percent

Question 3

Which of the following is an example of a final good or service?

• A. Wheat a bakery purchases to make bread• B. Coffee beans a coffee shop purchases to

make coffee• C. Lumber purchased by a construction

company to use in building houses• D. A cake purchased from a bakery for a

wedding

Question 3

Which of the following is an example of a final good or service?

• A. Wheat a bakery purchases to make bread• B. Coffee beans a coffee shop purchases to

make coffee• C. Lumber purchased by a construction

company to use in building houses• D. A cake purchased from a bakery for a

wedding

Question 4

Which is an example of discretionary spending?

• A. Social Security• B. Medicaid• C. Medicare• D. Education

Question 4

Which is an example of discretionary spending?

• A. Social Security• B. Medicaid• C. Medicare• D. Education

Question 5

• What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?

• A. Social Security and Medicaid• B. Social Security and Medicare• C. Medicare and Medicaid• D. Medicaid and Supplemental Security

Income

Question 5

• What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?

• A. Social Security and Medicaid• B. Social Security and Medicare• C. Medicare and Medicaid• D. Medicaid and Supplemental Security

Income

Question 6

An example of a durable good would be

• A. a used car.• B. a box of cereal.• C. a paperback book.• D. a pack of baseball cards.

Question 6

An example of a durable good would be

• A. a used car.• B. a box of cereal.• C. a paperback book.• D. a pack of baseball cards.

Question 7

GDP expressed in constant, or unchanging, prices is called

• A. real GDP.• B. nominal GDP.• C. price level.• D. net national product.

Question 7

GDP expressed in constant, or unchanging, prices is called

• A. real GDP.• B. nominal GDP.• C. price level.• D. net national product.

Question 8

The lowest point in an economic contraction is called

• A. a peak.• B. a recession.• C. a trough.• D. a depression.

Question 8

The lowest point in an economic contraction is called

• A. a peak.• B. a recession.• C. a trough.• D. a depression.

Question 9

How does the Bureau of Labor Statistics determine how the market basket should change over time?

• A. by evaluating the census• B. by conducting a Consumer Expenditure

Survey• C. by calculating the inflation rate• D. by computing the Consumer Price Index

Question 9

How does the Bureau of Labor Statistics determine how the market basket should change over time?

• A. by evaluating the census• B. by conducting a Consumer Expenditure

Survey• C. by calculating the inflation rate• D. by computing the Consumer Price Index

Question 10

In a typical business cycle, what stage immediately follows a peak?

• A. contraction• B. trough• C. expansion• D. growth

Question 10

In a typical business cycle, what stage immediately follows a peak?

• A. contraction• B. trough• C. expansion• D. growth

Question 11

An example of a nondurable good is

• A. a new car.• B. a paperback book.• C. a used car.• D. a washing machine.

Question 11

An example of a nondurable good is

• A. a new car.• B. a paperback book.• C. a used car.• D. a washing machine.

Question12

• If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is

• A. cyclically unemployed.• B. structurally unemployed.• C. seasonally unemployed.• D. frictionally unemployed.

Question12

• If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is

• A. cyclically unemployed.• B. structurally unemployed.• C. seasonally unemployed.• D. frictionally unemployed.

Question 13

What is an entitlement?• A. a social welfare program providing benefits to

people who meet certain eligibility requirements• B. a social welfare program paying bills for

government spending such as supplies and utilities• C. a social welfare program spending funds over

which legislators have direct control• D. a social welfare program providing payments

that the government receives for certain services

Question 13

What is an entitlement?• A. a social welfare program providing benefits to

people who meet certain eligibility requirements• B. a social welfare program paying bills for

government spending such as supplies and utilities• C. a social welfare program spending funds over

which legislators have direct control• D. a social welfare program providing payments

that the government receives for certain services

Question 14

How is the federal income tax a progressive tax?

• (a) The higher the income a person has, the higher the percentage that person pays as tax.

• (b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.

• (c) Two married people who file their taxes together will pay more taxes than a single person will.

• (d) Children pay no taxes, regardless of whether they earn a large income.

Question 14

How is the federal income tax a progressive tax?

• (a) The higher the income a person has, the higher the percentage that person pays as tax.

• (b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.

• (c) Two married people who file their taxes together will pay more taxes than a single person will.

• (d) Children pay no taxes, regardless of whether they earn a large income.

Question 15

• What term matches the following definition?

a general increase in prices

Question 15

• What term matches the following definition?

a general increase in prices

Answer: Inflation

Question 16

• What term matches the following definition?

a tax for which the percentage of income paid in taxes remains the same for all income levels

Question 16

• What term matches the following definition?

a tax for which the percentage of income paid in taxes remains the same for all income levels

Answer: Proportional Tax

Question 17

• What term matches the following definition?

spending on certain programs that is required by existing law

Question 17

• What term matches the following definition?

spending on certain programs that is required by existing law

Answer: Mandatory Spending

Question 18

• What term matches the following definition?

percentage of the nation’s labor force that is not employed

Question 18

• What term matches the following definition?

percentage of the nation’s labor force that is not employed

Answer: Unemployment Rate

Question 19

• What term matches the following definition?

taking tax payments out of an employee’s pay before he or she receives it

Question 19

• What term matches the following definition?

taking tax payments out of an employee’s pay before he or she receives it

Answer: Withholding