Economics Test: Original DO NOT EDIT

What are the three basic economic questions that every economic system must address?

What is economics?

The choices all societies must make about production are driven by:

• capitalism.
• price systems.
• scarcity.
• total cost.

Which factor is most likely to cause the supply of a product to decrease?

• a decrease in consumer demand
• a decrease in the price of resources used to make the product
• an increase in the number of consumers
• an increase in the number of suppliers

Which of the following will happen when the federal government spends more than it collects in revenues?

• The federal budget will show a deficit.
• The federal budget will show a surplus.
• The federal government will decrease sales taxes.
• State governments will help decrease the national debt.

What does Holmes think about natural resources?

• They are less important than human resources.
• They are more important than human resources.
• They are not being destroyed.
• They are not important.

What does Holmes believe is the greatest tragedy in America?

• the destruction of human ingenuity
• the destruction of human resources
• the destruction of natural resources
• the destruction of people’s abilities

Which is an example of how to produce?

• building new roads
• making weapons
• providing services for citizens
• regulating the amount of pollution factories can produce

Two countries have the same GDP. Country A has a population of 37 million. Country B has a population of 15 million. Which country has a higher GDP per capita?

• Country A
• Country B

What is a potential impact of government spending on economic growth?

• Decreased inflation which encourages economic growth
• Increased inflation which limits economic growth
• Decreased inflation which limits economic growth
• Increased inflation which encourages economic growth