Economics Quiz

Question 1 (10 points)

The contention that tariffs should be imposed when a foreign government provides financial assistance to its producers is:

Question 1 options:

the infant industry argument.

dumping.

to counter foreign subsidies.

a national defense concern.

Question 2 (10 points)

To prevent the dollar from depreciating, the U.S. central bank that tries to fix the currency value of the dollar can:

Question 2 options:

buy foreign currencies in the foreign exchange market.

abandon the U.S. dollar and use another country’s currency as its legal currency.

sell U.S. dollars in the foreign exchange market.

buy U.S. dollars in the foreign exchange market.

Question 3 (10 points)

If an economy is at long-run equilibrium, and consumers’ confidence in the economy rises:

Question 3 options:

aggregate demand will shift leftward and the price level will rise.

aggregate demand will shift rightward and the price level will rise.

aggregate demand will shift leftward and the price level will fall.

aggregate demand will shift rightward and the price level will fall.

Question 4 (10 points)

Which of the following situations best demonstrates the law of demand?

Question 4 options:

Moviegoers see fewer movies per year due to an overall decrease in the quality of newly released motion pictures.

A drought causes a decrease in the availability of pumpkins, resulting in fewer jack-o-lanterns displayed on Halloween.

Moviegoers react to an increase in the price of a theater ticket by seeing fewer movies per year.

An increase in the number of people writing Economics textbooks results in a decrease in average textbook prices.

Question 5 (10 points)

In the automobile industry, workers have just negotiated a new contract giving workers a large raise. There has also been an increase in the number of licensed drivers who are in the market for a new car. In the market for new automobiles, the effects that these changes will have on the equilibrium price and quantity include:

Question 5 options:

price will increase, and quantity will decrease.

price will increase, and the effect on quantity is indeterminate.

price will decrease, and the effect on quantity is indeterminate.

price will decrease, and quantity will increase.

Question 6 (10 points)

The rate of unemployment is calculated as the number of:

Question 6 options:

unemployed divided by the number of people in the civilian labor force.

unemployed workers divided by the number of employed workers.

people in the civilian labor force divided by the number of unemployed.

employed workers divided by the number of unemployed workers.

Question 7 (10 points)

The part of the Federal Reserve System that determines monetary policy actions is the:

Question 7 options:

Comptroller’s Office.

District Bank Board.

Federal Open Market Committee.

Federal Deposit Insurance Corporation (FDIC).

Question 8 (10 points)

Suppose we observe the following two simultaneous events in the market for beef. First, there is a decrease in the demand for beef due to changes in consumer tastes. And second, there is a reduction in supply due to cattle farmers selling their land to real estate developers. We know with certainty that these two simultaneous events will cause which of the following?

Question 8 options:

A decrease in the equilibrium quantity and an indeterminate change in the equilibrium price

No change in the equilibrium quantity and a reduction in the equilibrium price

A decrease in the equilibrium quantity and an increase in the equilibrium price

An increase in the equilibrium quantity and in the equilibrium price

Question 9 (10 points)

Which one of the following statements is false?

Question 9 options:

TC = TFC + TVC

AFC = TFC divided by Q

ATC = AFC + AVC

MC = TC divided by Q

Question 10 (10 points)

The infant-industry argument for tariff protection is that tariffs should be imposed to protect from competition:

Question 10 options:

industries that are essential if a country is to become an industrial nation.

industries needed for national defense.

industries that can compete with foreign competitors at this point in time and are deemed essential by the government.

industries that cannot compete with foreign competitors at this point in time, but will be able to once

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