Matching
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Identifying Key Terms
Match each term with the correct
statement below. a. | gross domestic product | f. | macroeconomics | b. | free
rider | g. | poverty
threshold | c. | public interest | h. | market failure | d. | private sector | i. | welfare | e. | in-kind
benefits | j. | public disclosure
laws |
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1.
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the study of the behavior and decision making of entire economies
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2.
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an income level below that which is needed to support families or
households
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3.
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the part of the economy that involves the transactions of individuals and
businesses
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4.
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goods and services provided by the government for free or at greatly reduced
prices
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5.
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someone who would not choose to pay for a certain good or service, but who
would get the benefits of it anyway if it were provided as a public good
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6.
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requirements for companies to provide full information about their
products
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7.
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the concerns of the people as a whole
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8.
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the total value of all final goods and services produced in a particular
economy
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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9.
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Which of the following is a private organization that attempts to influence
public officials to act or vote in ways that will benefit the group’s members?
a. | market research group | c. | public policy group | b. | free enterprise group | d. | interest group |
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10.
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What is the most effective way for consumers to make their desires known to
businesses?
a. | through mail and phone surveys | b. | by protesting and boycotting
products | c. | by the purchases they make | d. | by hiring lobbyists and joining consumer
groups |
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11.
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Why does the government use its powers to make sure that businesses disclose so
much information to the public?
a. | to make buyers more knowledgeable and safer | b. | to make it hard for
businesses to make an excess profit | c. | to make it easier for consumers to save
money | d. | to make it easy for businesses to have good
information |
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12.
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What is a positive externality?
a. | a way to generate trade that will benefit people who are from other
countries | b. | an economic side effect that generates unexpected benefits | c. | a cash flow that
will benefit both the government and the businesses who interact with it | d. | an extra payment to
welfare recipients |
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13.
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What does the Temporary Assistance for Needy Families program provide?
a. | retirement income for the elderly | b. | cash to the states to help run their welfare
programs | c. | compensation to all who lose jobs | d. | cash to workers injured on the
job |
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14.
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What is the difference between a business cycle and the day-to-day ups and downs
of the market?
a. | The day-to-day ups and downs of the market can be much more extreme than a business
cycle. | b. | The day-to-day fluctuations are more likely to have an impact on people’s
finances. | c. | A business cycle is usually more restricted, whereas market fluctuations are
worldwide. | d. | A business cycle is a major, prolonged fluctuation rather than a day-to-day
movement. |
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15.
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When did U.S. government become more and more involved in economic matters of
public interest?
a. | 1930s | c. | 1980s | b. | 1960s | d. | 1990s |
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16.
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What effect does new technology usually have on an economy?
a. | It makes the economy stronger and more efficient. | b. | It reduces the
dependence of the economy on business. | c. | It slows an economy down for at least a
while. | d. | It reduces the available jobs. |
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17.
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Which of the following is a critical rule for determining whether something is a
public good?
a. | The benefit to each individual who uses the facility is greater than the
cost. | b. | The benefits of the facility are greater for the society than for the individuals
using it. | c. | The total benefits to society are greater than the total cost. | d. | The total cost is
small for each individual taxpayer. |
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18.
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Which of the following is NOT an example of a public good?
a. | shopping malls | c. | highways | b. | national parks | d. | municipal
libraries |
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Short Answer
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Reading a Table| Federal
Program | Purpose | | Temporary Assistance for Needy Families | Provides welfare programs | | Unemployment insurance | Provides payments to the
unemployed | | Consumer Product Safety
Commission | Regulates consumer products | | Environmental Protection Agency | Protects human health and environment | | Equal Employment Opportunity Commission | Promotes
equal job opportunities | | Social Security
Administration | Provides payments to the elderly | | |
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19.
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Which program helps support people who have retired?
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20.
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Which programs provide short-term safety nets for people in direct need?
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21.
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Which programs provide indirect safety for all residents?
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Essay
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Critical Thinking
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22.
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Identifying Central Issues What is the difference between a positive and
a negative externality? Give an example of each.
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23.
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Synthesizing Information How might the changes brought about by the
influence of interest groups affect the public?
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24.
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Identifying Assumptions What kinds of intervention or protection have
U.S. residents come to expect from the government that a totally free market would not
provide?
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