Econornics : Work And. Prosperity

Name

IEST

Date

Score

5

Econornics : Work and. Prosperity

MULTIPLE CHOICE: Choose the word or phrase that will best complete the statement or answerthe question. F2 points each)

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1. The two primary responsibilities of any government should be to punish evil

and ?

c2. In

a. keepthepeace b. discourage crime

-L

3 L J &

d.

laws

reward good

a free market society, most economic choices are made by _?_. a. private businesses re. the private seetor

b.

Cs.

c. make responsible

government offieials

d. the public sector

?

believed that government should pump money into an economy during recessions by funding massive public works projects. a. David Ricardo c. John Maynard Keynes b. IGrl Marx d. Adam Smith

4. The expansion

of the American bureaucracy during the 20th century is

primarily the result of ? a. population growth b. militar5r activity

c. d.

a strong economy increased govemmental activity

5. That part of the business cycle at which a receding lowest point is called what? a. arecessron b. a trough

expanglon enlargement

its

c. the base period d. a trench

6. The conect name for the boom part of the business

a. b.

economy reaches

cycle is

a(n) ?

c. extension d.

recession

?. Economists often compare past and present prices to those of-?-.

a. business b. GNP

cycles

ro. equilibrium d. a base period

8. When a government dumps massive emounts of created money into a nation's money supply, the likely result will be ?

a. dellation b. inflation

c. d.

debasement stagnation

I

Copyright O 1999 Pensacola Christian C,ollege . Not to br reproduced-

23

Economi.cs : Work and, Prosperity

Tbst 5, page 2

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9. In his attempt to lift the American

eeonomy out of its slump, policies based upon supply-side economics. implemented c. Ronald Reagan a" Franlrlin Roosevelt

b.

/

,/

Lyndon Johnson

President

?

d. Jimmy Carter

tO. IGrl Malx outlined the steps he felt were needed to establish Communism in his oamohlet ? c. Tlrc Carnrnunist Manifesto a. Dos Kapital d- Thp Cornrnunist Leagrc b. Humanist Manifesto

D

A

f f . Welfare capitolisn economic system

ardmanryed capitali.sm are different terms for the

of

?

a-

soeialism

c.

b.

nationalism

d.

Communism free enterprise capitalism

k:.:.. The Canadian health care system is an saample of c.

a. socialism b. nationalism

d.

?

Communism free enterprise capitalism

COHPLETION: Write the word(s) that will best complete the statement. Ge points each)

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13.

A(n) ?

is an established system of political administration by which a nation, state, society, or organization is ruled.

L4. One of the best ways to judge the prosperity of a nation is by comparing consumer wages with consumer ?

lb. A(n) ?

is t}rat phase of the business cycle that directly follows a boom.

16.,

A(n)

?

is a recession that is unusually severe and longlasting.

1?. When state planne.rs in a command economy underestimate or overestimate the demand for various g@&, shortages and ? usually result.

UATCHING: Match the term with the correct definition or description.

(

f,T-

18. socialism L9. bureaucracy

r

20. IGynesianism

B

21. business cycle

11

22. Ieading indicator

p

._T

23. demand-pull inflation

to as Marxism / Kr"oreferred /"' ./,E ,/tlyct;rlrates up and down

/

25. supply-side economics

rt

26. Communism

/

basedupon collective ownership and control of many or most national resources

when the supply becomes /{. "r*ed greater than the demand of appointed officials and

,/dmadeup their numeroun agencies and ,. departments ,F. rejects the idea that "supply crreates

24. cost-pushinflation

6

Fl point each)

its own demand"

/ S.

advocatns reducing taxes to make more money available for private

investment in capital and research

,/

/

,,rt.

tnnds to change before the rest of the economy

/ '

caused by rising production costs that result in businesses pushing up prices

J.

caused when the demand becomes

greater than the supply MODIFIEDTRUE-FALSE: lf the statement is true, write true. ll it is fialse, replace the italicized word(s) with the word(s) that will'make the statement lrue. G2 points eaclt)

LlT el o*aa€4. lhe

subject of government's role in an economy is part of the field of rnicreconornies, the study of national and international economies and how they are affected by large-scale choices and public policies.

lc,, e

28. In the United States,

t}ae

priuafe sector is the larger of the

two sectors.

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29. \{hen too much money is placed in the money supply, the result is deflatian. 25

Tbst 6, page 4

Eeonomies: work and Prwperity

, , td f t^J

of the Great Depression, Americans accepted increased governmental control of the economy under the leadership of Franklin Roosevelt and his Great

80. During the midst Soei,etY-

{

l(u7.

31. l{he opportunlty costs of obtaining goods are normally much higher in a country with a command economy than in one with a free enterPrise economy.

LcoSS Dox<sri P'od'gt. Gross national prd,uct is the value of atl finished goods and senrices produced within a country during a year's time-

35. Stagletinnisthe

economic condition in which high inflation

is combined with high unemployment, resulting in or no inc:rease in ProductivitY.

T? --, €-

little

34. Ttre promotion of one's own count4r and government

regardless of moral considerations is a philosophy known as nationalisrn.

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I C- L-,

35. Karl Max, the Father of communism, advocated the violent overthrow of the bourgeois.

f-

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rrCi

S

BG. During the Cold War, West Berlin displayed the poverty and lack of freedom typically found in command economies.

lis a(

gT. One of the main dangers af Communismis its deceptiveness' a quality which allows it to creep into an economy without people realizing what is happening'

SHORT ANSWER: Write the correct answer in the blank.

EX C.

S,

;

,re.

Pl

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three of the five ways discussed in the text by which governments can damage their economies'

146.

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41. For what common

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42. Ttre

economic tool do the letters

cPl

stand?

1g1? Bolshevik Revolution ocsurred in which eountry?

Name

Tbst 5, page 5

Ecotwmi.es: Work and. Prosperity

ESSAY: Answer the following questions clearly and completely. (4 points total per questiorz,) 4{}. Explain how excessive taxation can seriously harm or eyen destroy an

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44. Discuss some of the problems inherent in socialism. Why do people continue to accept socialistic policies in spite of the dangers? 36 rI L o F +t4 e- Ppg bteprs t,;t,1h 6o C,a-( i<1 q_ (<_ -th(e_y

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