1. Unit 5
Economics EOC Review

2. Question 1 A recession is (a) a period of steady economic growth.
(b) a prolonged economic expansion.
(c) an especially long or severe economic contraction.
(d) a prolonged economic contraction.

3. Question 1 A recession is (a) a period of steady economic growth.
(b) a prolonged economic expansion.
(c) an especially long or severe economic contraction.
(d) a prolonged economic contraction.

4. Question 2
When the economy is working properly, what is the unemployment rate?
A. 0 to 3 percent
B. 8 to 10 percent
C. 4 to 6 percent
D. 10 to 12 percent

5. Question 2
When the economy is working properly, what is the unemployment rate?
A. 0 to 3 percent
B. 8 to 10 percent
C. 4 to 6 percent
D. 10 to 12 percent

6. Question 3
Which of the following is an example of a final good or service?
A. Wheat a bakery purchases to make bread
B. Coffee beans a coffee shop purchases to make coffee
C. Lumber purchased by a construction company to use in building houses
D. A cake purchased from a bakery for a wedding

7. Question 3
Which of the following is an example of a final good or service?
A. Wheat a bakery purchases to make bread
B. Coffee beans a coffee shop purchases to make coffee
C. Lumber purchased by a construction company to use in building houses
D. A cake purchased from a bakery for a wedding

8. Question 4 Which is an example of discretionary spending?
A. Social Security
B. Medicaid
C. Medicare
D. Education

9. Question 4 Which is an example of discretionary spending?
A. Social Security
B. Medicaid
C. Medicare
D. Education

10. Question 5
What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?
A. Social Security and Medicaid
B. Social Security and Medicare
C. Medicare and Medicaid
D. Medicaid and Supplemental Security Income

11. Question 5
What do taxes collected under the Federal Insurance Contribution Act (FICA) fund?
A. Social Security and Medicaid
B. Social Security and Medicare
C. Medicare and Medicaid
D. Medicaid and Supplemental Security Income

12. Question 6 An example of a durable good would be A. a used car.
B. a box of cereal.
C. a paperback book.
D. a pack of baseball cards.

13. Question 6 An example of a durable good would be A. a used car.
B. a box of cereal.
C. a paperback book.
D. a pack of baseball cards.

14. Question 7 GDP expressed in constant, or unchanging, prices is called
A. real GDP.
B. nominal GDP.
C. price level.
D. net national product.

15. Question 7 GDP expressed in constant, or unchanging, prices is called
A. real GDP.
B. nominal GDP.
C. price level.
D. net national product.

16. Question 8 The lowest point in an economic contraction is called
A. a peak.
B. a recession.
C. a trough.
D. a depression.

17. Question 8 The lowest point in an economic contraction is called
A. a peak.
B. a recession.
C. a trough.
D. a depression.

18. Question 9
How does the Bureau of Labor Statistics determine how the market basket should change over time?
A. by evaluating the census
B. by conducting a Consumer Expenditure Survey
C. by calculating the inflation rate
D. by computing the Consumer Price Index

19. Question 9
How does the Bureau of Labor Statistics determine how the market basket should change over time?
A. by evaluating the census
B. by conducting a Consumer Expenditure Survey
C. by calculating the inflation rate
D. by computing the Consumer Price Index

20. Question 10
In a typical business cycle, what stage immediately follows a peak?
A. contraction
B. trough
C. expansion
D. growth

21. Question 10
In a typical business cycle, what stage immediately follows a peak?
A. contraction
B. trough
C. expansion
D. growth

22. Question 11 An example of a nondurable good is A. a new car.
B. a paperback book.
C. a used car.
D. a washing machine.

23. Question 11 An example of a nondurable good is A. a new car.
B. a paperback book.
C. a used car.
D. a washing machine.

24. Question12
If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is
A. cyclically unemployed.
B. structurally unemployed.
C. seasonally unemployed.
D. frictionally unemployed.

25. Question12
If Bob loses his job at the GM plant because car manufacturing is slow due to a downturn in the economy, you can conclude that he is
A. cyclically unemployed.
B. structurally unemployed.
C. seasonally unemployed.
D. frictionally unemployed.

26. Question 13 What is an entitlement?
A. a social welfare program providing benefits to people who meet certain eligibility requirements
B. a social welfare program paying bills for government spending such as supplies and utilities
C. a social welfare program spending funds over which legislators have direct control
D. a social welfare program providing payments that the government receives for certain services

27. Question 13 What is an entitlement?
A. a social welfare program providing benefits to people who meet certain eligibility requirements
B. a social welfare program paying bills for government spending such as supplies and utilities
C. a social welfare program spending funds over which legislators have direct control
D. a social welfare program providing payments that the government receives for certain services

28. Question 14 How is the federal income tax a progressive tax?
(a) The higher the income a person has, the higher the percentage that person pays as tax.
(b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.
(c) Two married people who file their taxes together will pay more taxes than a single person will.
(d) Children pay no taxes, regardless of whether they earn a large income.

29. Question 14 How is the federal income tax a progressive tax?
(a) The higher the income a person has, the higher the percentage that person pays as tax.
(b) A person with a higher income pays more money in taxes, although the percentage he or she pays as tax is less.
(c) Two married people who file their taxes together will pay more taxes than a single person will.
(d) Children pay no taxes, regardless of whether they earn a large income.

30. Question 15 What term matches the following definition?
a general increase in prices

31. Question 15 What term matches the following definition?
a general increase in prices
Answer: Inflation

32. Question 16 What term matches the following definition?
a tax for which the percentage of income paid in taxes remains the same for all income levels

33. Question 16 What term matches the following definition?
a tax for which the percentage of income paid in taxes remains the same for all income levels
Answer: Proportional Tax

34. Question 17 What term matches the following definition?
spending on certain programs that is required by existing law

35. Question 17 What term matches the following definition?
spending on certain programs that is required by existing law
Answer: Mandatory Spending

36. Question 18 What term matches the following definition?
percentage of the nation’s labor force that is not employed

37. Question 18 What term matches the following definition?
percentage of the nation’s labor force that is not employed
Answer: Unemployment Rate

38. Question 19 What term matches the following definition?
taking tax payments out of an employee’s pay before he or she receives it

39. Question 19 What term matches the following definition?
taking tax payments out of an employee’s pay before he or she receives it
Answer: Withholding