Test Bank for Economics, 14th Edition
by Roger A. Arnold - Chapter 1
Assignment 2 (Updated for 2025/2026)
In countries like _____________ the command economy predominates.
A. China and Vietnam
B. Cuba and North Korea
C. South Africa and Kenya
D. Germany and France - correct answers--B. Cuba and North Korea
. In which of the following countries will the national government have the greatest
influence with respect to the nation's economy?
A. China
,B. Cuba
C. Canada
D. Chile - correct answers--B. Cuba
. In a command economy, the __________ either makes most economic decisions itself
or at least strongly influences how the decisions are made.
A. government
B. market
C. firm
D. business sector - correct answers--A. government
Because of their relatively small national economies, which of the following is most likely
considered to be the most important factor for Belgium, Korea, and Canada to take full
advantage of specialization?
A. division of labor
B. international trade
C. economies of scale
D. command economy - correct answers--B. international trade
. In a discussion of economics, which of the following would exert the most influence on
an individual firm's decision to hire workers?
A. wage levels
B. the macroeconomy
C. the firm's income
D. household income - correct answers--B. the macroeconomy
. In a _______________________, most economic decisions about what to produce,
how to produce it, and for whom to produce it are made by buyers and sellers.
A. market-oriented economy
B. macroeconomy
C. microeconomy
D. command economy - correct answers--A. market-oriented economy
Which of the following best denotes the reason for the existence of substantial black
markets?
A. a market-oriented economy
B. a command economy
C. government laws and rules
D. the microeconomy - correct answers--B. a command economy
,. Which of the following is generally accepted as a valid criticism of the production of
useful goods and services?
A. government involvement
B. the black market
C. environmental pollution
D. economic freedom - correct answers--C. environmental pollution
In the first chapter of The Wealth of Nations, Smith introduces the idea of the
__________, which means the way in which the work required to produce a good or
service is divided into a number of tasks that are performed by different workers.
A. division of labor
B. interconnected economy
C. task economy
D. modern economy - correct answers--A. division of labor
If macroeconomics looks at the economy as a whole, it focuses on which of the
following?
A. households
B. business firms
C. unemployed people
D. the division of labor - correct answers--C. unemployed people
In the ____________, households work and receive payment from firms.
A. financial investment market
B. financial capital market
C. labor market
D. savings market - correct answers--C. labor market
In the ______________, households receive goods and services and pay firms for
them.
A. labor market
B. financial capital market
C. goods and services market
D. savings market - correct answers--C. goods and services market
Which of the following best describes a monetary policy tool?
A. interest rates
B. taxes
C. household savings
D. government spending - correct answers--A. interest rates
, . Which of the following best describes a fiscal policy tool?
A. government spending
B. bank lending
C. financial capital markets
D. household spending - correct answers--A. government spending
The two main tools of macroeconomic policy include monetary policy, and fiscal policy,
which involves __________ spending.
A. business
B. government
C. household
D. capital market - correct answers--B. government
When nations desire a healthy macroeconomy, they typically focus on three goals, one
of these being:
A. balanced budget
B. prudent monetary policy
C. low inflation
D. assuring competition between firms
v - correct answers--C. low inflation
The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual markets while macroeconomics focuses
primarily on international trade.
B. microeconomics concentrates on the behaviour of individual consumers while
macroeconomics focuses on the behaviour of firms.
C. microeconomics concentrates on the behaviour of individual consumers and firms
while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on
the causes of unemployment. - correct answers--C. microeconomics concentrates on
the behaviour of individual consumers and firms while macroeconomics focuses on the
performance of the entire economy.
Which of the following is most likely a topic of discussion in macroeconomics?
A. an increase in the price of a hamburger
B. a decrease in the production of DVD players by a consumer electronics company
C. an increase in the wage rate paid to automobile workers
D. a decrease in the unemployment rate - correct answers--D. a decrease in the
unemployment rate
by Roger A. Arnold - Chapter 1
Assignment 2 (Updated for 2025/2026)
In countries like _____________ the command economy predominates.
A. China and Vietnam
B. Cuba and North Korea
C. South Africa and Kenya
D. Germany and France - correct answers--B. Cuba and North Korea
. In which of the following countries will the national government have the greatest
influence with respect to the nation's economy?
A. China
,B. Cuba
C. Canada
D. Chile - correct answers--B. Cuba
. In a command economy, the __________ either makes most economic decisions itself
or at least strongly influences how the decisions are made.
A. government
B. market
C. firm
D. business sector - correct answers--A. government
Because of their relatively small national economies, which of the following is most likely
considered to be the most important factor for Belgium, Korea, and Canada to take full
advantage of specialization?
A. division of labor
B. international trade
C. economies of scale
D. command economy - correct answers--B. international trade
. In a discussion of economics, which of the following would exert the most influence on
an individual firm's decision to hire workers?
A. wage levels
B. the macroeconomy
C. the firm's income
D. household income - correct answers--B. the macroeconomy
. In a _______________________, most economic decisions about what to produce,
how to produce it, and for whom to produce it are made by buyers and sellers.
A. market-oriented economy
B. macroeconomy
C. microeconomy
D. command economy - correct answers--A. market-oriented economy
Which of the following best denotes the reason for the existence of substantial black
markets?
A. a market-oriented economy
B. a command economy
C. government laws and rules
D. the microeconomy - correct answers--B. a command economy
,. Which of the following is generally accepted as a valid criticism of the production of
useful goods and services?
A. government involvement
B. the black market
C. environmental pollution
D. economic freedom - correct answers--C. environmental pollution
In the first chapter of The Wealth of Nations, Smith introduces the idea of the
__________, which means the way in which the work required to produce a good or
service is divided into a number of tasks that are performed by different workers.
A. division of labor
B. interconnected economy
C. task economy
D. modern economy - correct answers--A. division of labor
If macroeconomics looks at the economy as a whole, it focuses on which of the
following?
A. households
B. business firms
C. unemployed people
D. the division of labor - correct answers--C. unemployed people
In the ____________, households work and receive payment from firms.
A. financial investment market
B. financial capital market
C. labor market
D. savings market - correct answers--C. labor market
In the ______________, households receive goods and services and pay firms for
them.
A. labor market
B. financial capital market
C. goods and services market
D. savings market - correct answers--C. goods and services market
Which of the following best describes a monetary policy tool?
A. interest rates
B. taxes
C. household savings
D. government spending - correct answers--A. interest rates
, . Which of the following best describes a fiscal policy tool?
A. government spending
B. bank lending
C. financial capital markets
D. household spending - correct answers--A. government spending
The two main tools of macroeconomic policy include monetary policy, and fiscal policy,
which involves __________ spending.
A. business
B. government
C. household
D. capital market - correct answers--B. government
When nations desire a healthy macroeconomy, they typically focus on three goals, one
of these being:
A. balanced budget
B. prudent monetary policy
C. low inflation
D. assuring competition between firms
v - correct answers--C. low inflation
The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual markets while macroeconomics focuses
primarily on international trade.
B. microeconomics concentrates on the behaviour of individual consumers while
macroeconomics focuses on the behaviour of firms.
C. microeconomics concentrates on the behaviour of individual consumers and firms
while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on
the causes of unemployment. - correct answers--C. microeconomics concentrates on
the behaviour of individual consumers and firms while macroeconomics focuses on the
performance of the entire economy.
Which of the following is most likely a topic of discussion in macroeconomics?
A. an increase in the price of a hamburger
B. a decrease in the production of DVD players by a consumer electronics company
C. an increase in the wage rate paid to automobile workers
D. a decrease in the unemployment rate - correct answers--D. a decrease in the
unemployment rate
