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Ultimate Guide to Units 3-5 of Economics 1.
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Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. According to the scenario, what is the greatest economic challenge that Country D is facing? unemployment inflation high production high wages - ansb When an economy suffers from low production, a country cannot worry about unemployment. change the tax rate. provide adequate funding for public safety. enjoy a steady rate of economic growth. - ansd Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. Based on the scenario, who is most affected by the situation taking place within Country D? the government of Country D the workers of Country D the businesses of Country D the government, workers, and businesses of Country D - ansd The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. What course of action might a government take to respond to the downturn revealed in this graph? reducing the size of its armed forces laying off unnecessary workers investing in job-training programs encouraging people to travel overseas - ansc
Ultimate Guide to Units 3-5 of Economics 1.
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The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. The best conclusion that can be drawn from the graph is that the number of nonfarm jobs remained consistent over time. started going down in 2008. went up every year since 2008. started going down in 2010. - ansb Public policy can be best defined as a course of action the government takes in response to an issue or problem. a decision made by all registered voters to change a government program. the annual review of a government's plans to spend taxpayers' money. a forum where citizens can debate the merits of a government proposal. - ansa Economic interdependence means that economic policies must balance the needs of all governments in the world. governments, individuals, and businesses. small businesses and large corporations. both wealthy and poor individuals. - ansb In a free enterprise system, governments address public problems through policy to ensure that citizens' needs are met and protected. economic operations of businesses are controlled. workers earn more than workers in other countries. the nation's level of productivity remains steady. - ansa The diagram shows a challenge for government policy-makers. Which of these statements describes what the diagram is showing? A country's needs are more important than its ideals. The most important aspect of economic policy is citizens' safety. Economic policy must reach a balance between needs and ideals. Private property is somewhat less important than fairness. - ansb A government's monetary policy is its plan to control taxation and spending. prices.
Ultimate Guide to Units 3-5 of Economics 1.
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When revenues are higher than expenditures in a budget, that budget shows a deficit. is in balance. must be discarded. shows a surplus. - ansd "Meeting the spending targets in this budget meant some very difficult choices." President Barack Obama, 2012 Budget Message of the President Read the passage. What did the president mean when he said he had to face "very difficult choices" when creating a federal budget? deciding which country to borrow from to finance spending deciding what would be funded and what would be cut deciding how to keep interest rates low on the national debt deciding how much to increase tax rates - ansb The pie chart shows federal spending in 2010. Which of the following was the highest spending priority for the federal government in 2010? labor and transportation veterans' affairs education/health and human services international assistance - ansc Which of the following statements most accurately describes the federal government and its employees? Millions of Americans work for the federal government. The federal government is not allowed to hire employees. The majority of Americans are employed by the federal government. The number of federal employees is too small to affect government spending. - ansa The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed. - ansproportionally Which are examples of programs or projects most likely funded by taxes paid by citizens of the United States? Check all that apply. constructing a highway collecting garbage
Ultimate Guide to Units 3-5 of Economics 1.
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developing a vacation resort building a shopping center maintaining state parks - ans1 25 How are progressive taxes and regressive taxes similar? Both charge high-income individuals more. Both are considered flat taxes. Both are determined based on income. Both are types of indirect taxes. - ansc If a sales tax is the same for all goods sold within a given area, why are sales taxes considered regressive? High-income earners avoid paying sales tax through deductions. Sales taxes tend to be higher in areas with large low-income populations. Sales tax disproportionately affects low-income earners. Low-income earners make purchase decisions based exclusively on sales tax. - ansc A(n) is a tax issued by the federal government on imported goods. - anstariff Property taxes are usually determined based on the property owner's income. the amount of money invested in the property. the earnings generated by the property. the value of the property. - ansd Which of these is most likely the US government's aim in taxing imported goods? to protect domestic businesses to decrease international trade to end reliance on foreign goods to make US markets less desirable - ansa Which best explains how contractionary policies can hamper economic growth? They slow demand. They help increase consumer debt. They reduce consumer confidence. They reduce disposable income. - ansd If expansionary taxation policies encourage growth, are they always appropriate to implement? No, government services could be reduced and cause serious problems for individuals and businesses. Yes, the private sector can easily and affordably replace all services and facilities cut by the government. No, the government is capable of providing many but not all services individuals and businesses need.
Ultimate Guide to Units 3-5 of Economics 1.
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reducing unemployment and maintaining cash flow controlling stagflation and reducing unemployment managing credit and ensuring the money supply's liquidity - ansa Why does the Fed pay interest to banks? It is interest on money held in reserve. It is interest on credit available to the Fed. It is interest on loans taken by the Fed. It is interest on government investments. - ansa Which statement best describes how the Fed responds to recessions? It sells more securities. It charges banks more interest. It increases reserve requirements. It increases the money supply. - ansd Which best describes what a central bank uses monetary policy to do? ensure that the government has a balanced budget influence financial institutions globally ensure that the government is sufficiently funded steer the economy away from recession and toward growth - ansd How long is a representative's term of office? one year two years four years six years - ansb What is the proper order for how a bill passes through the House? submission, debate, hearing, vote submission, hearing, debate, vote hearing, submission, debate, vote hearing, debate, submission, vote - ansb How can the Senate limit the power of the House? by not sending bills to the House by not approving the House's bills by being the upper chamber by having six-year terms - ansb What power does the House hold in regard to impeachment? It forms a committee to hear complaints against an official. It brings charges against an official to remove him or her from office. It holds a trial to present evidence against an official on the charges of impeachment.
Ultimate Guide to Units 3-5 of Economics 1.
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It decides whether the official is guilty and should be removed from office. - ansb What happens first when a bill is introduced in the House? The House votes to approve or reject the bill. Representatives debate the bill on the floor of the House. The Speaker decides whether the House will consider the bill. The bill is assigned to a committee, who looks into it and recommends changes. - ansd Read the quote from a member of the House. In order to do our job well, we spend a lot of time meeting with people who live in our states to tell them about what is happening in government and to listen to their ideas about how to improve life in our country. —Representative Mike Honda California District 17 San Jose, CA To which duty of a House member does this quote most likely refer? to propose and draft state laws to hire and manage staff in Washington D.C. and in the district to meet with constituents in Washington D.C. and in the district to serve on committees in the House - ansc How many members are there in the House of Representatives? 100 200 435 535 - ansc Who in the House has the power to lead the caucus and control the agenda? the Majority Whip the Majority Floor Leader the Speaker of the House the Committee Chair - ansc Which of the House's functions is the most important? electing a president in a deadlock impeaching a federal employee reviewing Senate tax bills creating laws - ansd Which of these is an exclusive power of the House of Representatives?
Ultimate Guide to Units 3-5 of Economics 1.
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discourage producers from taking harmful actions. encourage producers to follow the Constitution. discourage producers from making a profit. - ansb Regulatory policy requires a balance between protecting safety and protecting constitutional rights. improving corporate profits. improving environmental conditions. protecting states' rights. - ansa The Food and Drug Administration sets standards for advertising. product labeling. the environment. traffic safety. - ansb What makes enforcing safety standards a challenge for the Food and Drug Administration? Many foods are imported from other countries, and the FDA must ensure those foods meet the same standards as US goods. The FDA faces competition from the EPA, which sets standards for product labeling. The FDA has no control over advertising laws, which may conflict with safety standard laws. Many raw materials are exported to other countries, and the FDA must ensure those materials meet the same standards as international goods. - ansa The most efficient way to ensure that producers are responsible for products is through advertising. legislation. labeling. compliance. - ansc Regulatory agencies such as the OCC and the FDIC add to the banking system. - anssafety A mixed-market economy is best defined as an economy with some government intervention. without government intervention. with some externalities. without corporate compliance. - ansa A goal of financial regulatory agencies is to prevent monopolies. enforce workplace safety. protect the environment. enforce food safety. - ansa The chart shows a cost-benefit analysis.
Ultimate Guide to Units 3-5 of Economics 1.
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Latest Updated 2025/2026.
Which most likely explains why the costs and benefits shown by the EPA are higher than the other regulatory agencies? The EPA legislates and enforces more regulations that reap greater benefits than the other agencies. The EPA legislates and enforces food regulations that reap greater benefits than the other agencies. The EPA has a larger budget than the other agencies, and its employees work longer hours. The EPA is less efficient than the other agencies, and its employees spend more money. - ansa What is the definition of collective bargaining? ongoing salary negotiations between an employee and a factory owner an agreement among a group of factory owners to raise worker wages a written set of guidelines about legal and illegal workplace conditions labor union and employer negotiations about wages and other issues - ansd What is the definition of minimum wage? the lowest hourly pay that workers can receive the average pay for qualified workers the starting salary for all new employees the required pay when an employee is injured - ansa What event had an enormous effect on US workplace safety? a new minimum wage the first labor union a worker strike a deadly factory fire - ansd Both newspaper journalists and postal workers have been negatively affected by the popularity of electronic communication and the Internet. declining literacy rates and lack of interest in reading. government budget cuts that led to fewer jobs in these fields. competition with cheaper labor performed by overseas workers. - ansa What is one benefit for US workers who have a college degree rather than a high school diploma? More than 80 percent of jobs require a college degree. Those with a college degree report higher job satisfaction. Most workers with a college degree are immune to layoffs. Those with a college degree earn nearly twice as much as those without college. - ansd The graph shows labor union membership.
Ultimate Guide to Units 3-5 of Economics 1.
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All states had safety laws, but no one bothered to enforce them. - ansb Why must the government consider companies' needs as well as those of workers? Workers often take advantage of safety and wage laws and regulations. Company owners can easily vote government officials out of office. Employers deserve the same benefits and protections as employees do. Regulations can be costly and may drive companies out of business. - ansd One argument in favor of labor unions is that they help create many new jobs. support both owners and workers. give workers job security. eliminate unqualified workers. - ansc Which workers are most likely to be in demand in the future? those with high-tech skills those with construction skills those in government jobs those in manufacturing jobs - ansa Read the excerpt from a letter about the early trade union movement. The trade union movement came into being as a movement of hunger. It was made necessary by conditions. It was in the beginning formed in response to a hunger for enough to eat... As it became possible to secure more food, other hungers demandedsatisfaction... The demands were for more and better food, for better clothes and for better homes. It required a struggle to satisfy these needs... [A]t every step of the way it was necessary to overcome the stubborn opposition of employers who were resolved not to recede and not to relinquish any of the powers and privileges which they possessed. —Samuel Gompers, 1920 What does the author believe about factory owners? They struggle just as workers do. They earned their privileges. They are greedy and selfish. They are stubborn but hardworking. - ansc laws ensure that workers are paid if they are injured on the job. - answorker's compensation Which document determines the number of shares a company can sell? a stock prospectus an annual bill of rights a corporate charter an annual report - ansc
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Franchising is typically done by cooperatives. partnerships. sole proprietors. corporations. - ansd What happens to earnings in a cooperative? They are used to pay middlemen for services. They are shared with member owners. They are used to buy more stock for members. They are shared with customers through dividends. - ansb The main advantage that corporations have is limiting liability for owners and stockholders. giving many owners a say in business decisions. being inexpensive and easy to establish. requiring fewer state and federal regulations. - ansa How do corporations raise money and resources to expand? They request a bank loan. They save business profits. They cash in dividends. They agree to sell stocks. - ansd Which best describes the difference between preferred and common stocks? Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights. Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends. Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends. - ansb People who buy stock in a company are known as. - ansshareholders Analyze the chart, which depicts a typical corporate structure. Based on the chart, the primary responsibility of shareholders is to run the business by electing a board of directors, who then hire the company's leaders. run the business by electing a board of directors and hiring a president and other leaders. make business decisions on the advice of a board of directors, a president, and other leaders.
Ultimate Guide to Units 3-5 of Economics 1.
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Cooperatives save members money by purchasing supplies and services as a group. securing financing from banks as a group. charging more to sell their products as a group. sharing all profits democratically as a group. - ansa The most common business organizations in the United States are partnerships. sole proprietorships. corporations. franchises. - ansb What must an entrepreneur assume when starting a business? that the correct location guarantees success that every product has a customer who wants it that clever market strategies may still fail to sell a product that raising funds is the most difficult step in starting a business - ansc What is a main reason why entrepreneurs experience daily stress? They have considerable responsibility. They need to spend time training employees. They need to have sufficient income to pay loans. They have to contribute both to the market and society. - ansa An entrepreneur would most likely be a low risk taker. trained manager. person who works well alone. person who has a brief work week. - ansc Read the graph. What can the reader reasonably conclude from information in the graph? Fewer new businesses were started in 2010 than in other years. The opening of new businesses peaked between 2007 and 2008. More new businesses were started in 2006 than in 2005. The number of new businesses remained constant between 2006 and 2009. - ansa An entrepreneur is someone who starts and runs a business. is an employee of a business.
Ultimate Guide to Units 3-5 of Economics 1.
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invents products for other businesses. works for multiple developing businesses. - ansa An entrepreneur must accept being accountable for the failure of the company because the entrepreneur is part of the management team. responsible for organizing the business. expected to contribute positively to society. expected to dedicate the most hours to the business. - ansb What is one purpose of writing a business plan before entering the market? to prove that the new company will be successful to show that the enterprise is realistically based to have a useful tool when applying for funding to differentiate the new company from the competition - ansd To be successful, an entrepreneur must be willing to invest money, considerable effort, and
. - ansnot tome probably time How are Bill Gates and Henry Ford similar? Check all that apply. They both streamlined factory production. They both became wealthy and successful. They both helped better the lifestyles of others. They both developed products that filled a human need or needs. They both founded a company when they were very young. - ans Henry Ford was a successful entrepreneur because he gained great wealth from his company. helped workers achieve better conditions. designed a useful mode of transportation. built his own factory to produce a product. - ansb According to the article by Brooks, successful entrepreneurs are most interested in job security. financial gain. personal fulfillment. a flexible working environment. - ansc According to Brooks's article, what was the main effect of entrepreneurship in China? Poverty noticeably declined. Foreign investment declined. New products were invented. Product exports exceeded imports. - ansa
Ultimate Guide to Units 3-5 of Economics 1.
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decreased available credit increased money supply increased inflation increased interest rates decreased interest rates - ans What part does interest play in deficit spending? Governments must pay interest on money they borrow when they take on debt. Citizens must pay interest when their governments borrow money. Governments may charge foreign countries interest when they borrow money. Interest is not a factor when a government's budget is in deficit. - ansa What happens when a bank is required to hold more money in reserve? It has less money for loans. It has less money for operations. It has less money for interest payments. It has less money for withdrawals. - ansa What circumstances during the early days of industrialization led to a need for reform? Check all that apply. Factory equipment was dangerous to operate. There were too few capable workers to fill positions. There was little government regulation of workplaces. A typical work shift might be twelve to sixteen hours long. It was very expensive to keep factories running. - ans Which group does the Fed serve? financial institutions consumers government bodies bankers - ansa Among the changes that labor reformers wanted after the Industrial Revolution was more jobs for untrained workers. a ban on child factory workers. jobs for women factory workers. equal pay for owners and workers. - ansb Labor unions were certain to advocate for the best interests of workers because the government shut down factories that did not improve work conditions. the top factories were run by owners who wanted to retain their workers. the government required all labor unions to promote workplace reform. the labor unions were created by workers and made up of workers. - ansd Two doctors who join forces in business form a - anspartnership
Ultimate Guide to Units 3-5 of Economics 1.
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Which best explains why a sole proprietor would want a partner? to reduce the number of responsibilities to make it easier to raise funds for expansion to move into a more favorable tax bracket. to take advantage of little government oversight. - ansb The development of many new businesses helps limit unemployment. taxation. revenue. risk. - ansa Before creating a business plan, an entrepreneur must research businesses in the past. - anssimilar Expansionary spending takes place when a government makes the decision to put a freeze on the number of its employees. raise taxes to balance its budget. raise taxes to run a budget surplus. raise spending to stimulate the econom - ansd Which best describes why governments collect taxes? to control the value of currency to keep the government running to ensure surplus funds to fund government programs - ansd A business owner would most likely create a cooperative instead of buying a franchise because cooperatives give majority owners the most control, while franchises make decisions with a parent company. cooperatives make it easy to accumulate supplies, while franchises come with supplier relationships already in place. cooperatives are well financed by members, while franchises must raise large sums of money to launch a business. cooperatives allow all owners to share profits, while franchises are required to share profits with a parent company. - ansd Which of these factors would strengthen demand for a nation's currency on the international market? Select all that apply. high domestic inflation stability of government victory in war high gross domestic product
