Which of the following countries did not experience hyperinflation in the past 20 years?
a. South Korea
b. Nicaragua
c. Ukraine
d. Bolivia
e. Argentina
Question 2The fundamental economic problem is:
a. poverty.
b. unemployment.
c. scarcity.
d. inflation.
Question 3Which of the following led to an introduction of a new currency in Argentina in the mid 1980s?
a. An economic depression
b. A misguided political situation
c. Social instability
d. Hyperinflation
e. A prolonged deflation
Question 4Scarcity:
a. occurs only in centrally planned economies.
b. will likely be eliminated by technological progress.
c. exists only in poor nations.
d. occurs if there are insufficient resources to provide for human wants.
Question 5Which of the following is true of hyperinflation?
a. It causes the value of a currency to deteriorate so quickly that people become reluctant to hold that currency.
b. It is a situation in which people hoard currency expecting its value to increase in recent future.
c. It is a simultaneous increase in inflation and decrease in the quality of products.
d. It occurred in the United States in the 1970s.
e. It is a synonym for cost-push inflation.
Question 6Which of the following goods would be considered scarce?
a. iPods
b. crude oil
c. tax preparation services
d. all of the above
Question 7Demand-pull inflation is caused:
a. by increases in production costs.
b. by increases in tax rates by the government.
c. by trade unions' pressure for wage hike.
d. when spending increases in an economy producing at its maximum capacity.
e. when increases in the supply of goods are exactly offset by increases in spending.
Question 8Economics is primarily the study of:
a. human greed.
b. how firms compete for profits in the marketplace.
c. how limited resources are allocated to satisfy unlimited wants.
d. how successful investors make money in the stock market.
Question 9Which of the following could contribute to cost-push inflation?
a. Greater demand for exports
b. Lower income taxes
c. An increase in consumption demand
d. Higher government spending
e. Higher wage demands by trade unions
Question 10Economics is a social science that primarily explores how:
a. businesses market products under competitive conditions.
b. stock and bond prices fluctuate when there are changes in demand or supply.
c. the government allocates its budget among competing political interests.
d. goods and services are consumed, produced and distributed in a world with limited resources.
Question 11Which of the following is most likely to result if the Congress passes the living wage law?
a. Cost-push inflation
b. Demand-pull inflation
c. Deflation
d. Recession
e. Stagnation
Question 12Scarcity exists because of:
a. the allocation of goods by prices.
b. specialization and division of labor.
c. the market mechanism.
d. unlimited wants and limited resources.