1. ECONOMICS PRETEST (No grade taken- merely for your self-assessment)

2. WHAT IS ECONOMICS? DEFINITION?

3. Which is always present in an economic system? (a) central planning (b) strikes (c) scarce resources (d) market decision-making

4. Which of the following taxes is mostly based on the ability to pay? A) property tax B)sales tax C) social security tax D) income tax

5. Caveat emptor means: A) the public’s right to obtain land B) let the buyer beware C) citizen’s right to own property D) noninterference by government E) special concessions to business

6. Who controls the money in circulation? A) Treasury B) Federal Deposit of Insurance Corporation C) Federal Reserve D) Banks

7. An underdeveloped country is basically A) industrial in nature B) receiving a favorable balance of trade C) automated D) agrarian in nature

8. The total value of goods and services produced in a given year is called: A) national income B) national wealth C) consumer debt D) gross domestic product

9. Federal government expenditures in the market are the greatest in which of the following areas? A) defense B) debt C) welfare d) foreign aid

10. Supply and demand in the market determine A) utility B) cost C)production D) price

11. Name the three basic economic systems in the world. A)_____________ B)_____________ C)_____________

12. The opportunity cost of a new public high school is the: A) money cost of hiring teachers for the new school B) cost of constructing the new school at a later date C) change in the annual tax rate to pay for the new school D)other goods and services that must be given up to build the new school

13. Assuming little or no government interference in the market, which of the following is the lifeblood (internal engine) of the market? A) competition B) price C) stock market D) regulation

14. Which government agency regulates antitrust formations? A) Supreme Court B) Congress C) Federal Trade Commission D) State Courts

15. FICA which is reported in your paycheck stands for what deduction? _____________________________ Federal Income Compensation Act.. (also called payroll taxes) FICA taxes are paid into the Old Age Survivors and Disability (OASDI) and Medicare trust accounts. For 2007, you pay 6.2% of your first $97,500 income to OASDI. Your employer also pays out of its pocket the same percentage. This results in a combined contribution equal to 12.4% of the amount of your income. If you are self-employed, you contribute 12.4% of your own income.OASDI

16. What is monetary policy? _________________________

17. What is fiscal policy? ___________________________

18. What does CPI measure and what does the acronym stand for? __________________________

19. Name the three basic factors of production A________________ B________________ C_________________

20. One example of a capital good would be: A) bank deposits B) roofing machine C) coal D) ink

21. Of the following, which is the most general cause of low individual incomes in the U.S.? A) lack of valuable productive services to sell B) discrimination against nonunion workers C) unwillingness to work D) progressive tax rates

22. To promote economic growth, a country must: A) increase investment B) Increase consumption C) Use the market system D) Use central economic planning

23. A government budget deficit exists when: A) government spending exceeds tax revenues B) government spending is increased C) the national debt is decreasing D) taxes are reduced

24. Ceteris paribus means: A) who cares B) the money is inflated C) all other things being equal D) the money should be equally distributed

25. Who wrote the Wealth of Nations? _________________________

26. What type of business formation is the most common in the U.S.? _________________________

27. What constitutes a favorable balance of trade? __________________________ Do we have one now?

28. Which security pays interest? A)stock B) bond

29. Name the four market models in the U.S. A)________________ B)________________ C)________________ D)________________

30. How does the First Amendment begin? _____________________________ Why is that important to know?

31. Name your Five Civil Liberties A)__________________ B)__________________ C)__________________ D)__________________ E)__________________

32. What three questions does every economy ask? A)_________________ B)_________________ C)_________________

33. What is the motivating force of a free enterprise economy? ____________________________

34. What does the acronym GDP stand for? What are the component parts of GDP?

35. With time, a decrease in the dollar price of foreign currency would cause (i.e. dollar is depreciated.) a.The nation’s imports to increase and the exports to decrease. b.The nation’s exports to increase and the imports to decrease. c.Both the imports and exports to decrease d.Both the imports and exports to increase

36. What are the two evils of every economy?

37. WELCOME TO “ECON 101” DOES ANY OF THIS STUFF AFFECT YOU? “There can be no real freedom in the presence of economic insecurity.” Chester Bowles