Multiple Choice
1. What is the main advantage of using money instead of bartering? (1 point)
Many more people today use money than bartering to get goods and services.
Not all countries use the same types of money in their economies.
Money comes in many different values to pay for goods and services.
People do not have to have a good or a service that another person wants.
ANSWER=C
2. In January of 2008, the average price of a gallon of milk was $3.87. In January of 2012, the average price of a gallon of milk was $3.58. This is an example of (1 point)
inflation.
interest.
deflation.
productivity.
ANSWER=D
3. What is the best definition of the term interest rate? (1 point)
the rate of return on a business risk
the price for borrowing or saving money
the cost of improving productivity
the influence of supply and demand on loans
ANSWER=A
4. Why do interest rates on home mortgages increase when demand for housing increases? (1 point)
Banks want to decrease incentives to buyers when demand is high.
When the demand for mortgages increases, lenders can increase the cost of borrowing money.
Interest rates do not move in response to consumers’ actions.
When demand is high, interest rates decrease.
ANSWER=C
5. Workers mostly sell their labor in order to (1 point)
earn income.
grow their productivity.
become entrepreneurs.
avoid inflation.
ANSWER=B
6. Which of these factors does not contribute to the income potential of a job? (1 point)
the education required to be successful at a job
the amount of income a person wants to make at a job
the special skills needed to do a job well
the enjoyment a person finds in a job
ANSWER=A
7. Which of these actions is an entrepreneur most likely to take? (1 point)
Develop and market a new product.
Begin working for a large corporation.
Ignore ways to solve economic problems.
Specialize in just one type of task.
ANSWER=D
8. What is one non-monetary positive incentive for becoming an entrepreneur? (1 point)
working long hours
earning a profit
being your own boss
organizing productive resources
ANSWER=B
9. Increased productivity most often leads to (1 point)
higher standards of living.
better educational opportunities.
shorter working hours.
lower profits and outputs.
ANSWER=A
10. XYZ Gaming Inc. wants to invest in some new goods or services to raise its overall productivity. Which of these would be the best choice? (1 point)
bigger desks for workers
faster Internet service
a new lunchroom
health training for employees
ANSWER=D
25 answers
1. d
2. c
3. b
4. b
5. a
6. b
7. a
8. c
9. a
10.b
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2. c
3. b
4. b
5. a
6. b
7. a
8. c
9. a
10. b
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2.C
3.B
4.B
5.A
6.D
7.A
8.C
9.A
10.B
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B
D
D
A
C
A
B
B
B
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16 answers