Econ Final Exam questions provided
with correct answers.
Dividend ANS - that part of the earnings of a corporation that is distributed to its shareholders
Monetary Policy ANS - Government policy that attempts to manage the economy by controlling the
money supply and thus interest rates.
Traditional Economy ANS - An economy in which production is based on customs and traditions and
economic roles are typically passed down from one generation to the next.
Bond ANS - a certificate of debt (usually interest-bearing or discounted) that is issued by a government
or corporation in order to raise money
Corporation ANS - A business owned by stockholders who share in its profits but are not personally
responsible for its debts.
Fiscal Policy ANS - The federal government efforts to keep the economy stable by increasing or
decreasing taxes or government spending
Regressive Tax ANS - A tax whereby people with lower incomes pay a higher fraction of their income
than people with higher incomes.
S.E.C ANS - an independent federal agency that oversees the exchange of securities to protect investors
Law of Supply ANS - the principle that suppliers will normally offer more for sale at higher prices and
less at lower prices
D.J.I.A ANS - Dow Jones Industrial Average; stock market economy indicator
, Substitute Goods ANS - goods that can be used in place of other goods (Colgate/Crest, Toyota/Honda)
Business Cycle ANS - recurring fluctuations in economic activity consisting of recession and recovery and
growth and decline
Scarcity ANS - the condition that results from society not having enough resources to produce all the
things people would like to have
Crash of 1929 ANS - October 29; fell 23% over black monday and tuesday; borrowed funds to buy stocks
was the cause of the crash- potential to borrow 78% of the price; took 25 years to recover
Investment ANS - spending on capital equipment, inventories, and structures, including household
purchases of new housing
Peak ANS - of a period of maximal use or demand or activity
Barriers of Trade ANS - things that restrict the free exchange of goods and services between countries.
They include tariffs, quotas, rivers, mountains, and oceans
Deficit ANS - the property of being an amount by which something is less than expected or required
Quota ANS - a limitation on imports
Oligopoly ANS - (economics) a market in which control over the supply of a commodity is in the hands
of a small number of producers and each one can influence prices and affect competitors
3 tools of Federal Reserve ANS - money supply, interest rates, reserve requirements
Proportional Tax ANS - a tax for which the percentage of income paid in taxes remains the same for all
income levels
with correct answers.
Dividend ANS - that part of the earnings of a corporation that is distributed to its shareholders
Monetary Policy ANS - Government policy that attempts to manage the economy by controlling the
money supply and thus interest rates.
Traditional Economy ANS - An economy in which production is based on customs and traditions and
economic roles are typically passed down from one generation to the next.
Bond ANS - a certificate of debt (usually interest-bearing or discounted) that is issued by a government
or corporation in order to raise money
Corporation ANS - A business owned by stockholders who share in its profits but are not personally
responsible for its debts.
Fiscal Policy ANS - The federal government efforts to keep the economy stable by increasing or
decreasing taxes or government spending
Regressive Tax ANS - A tax whereby people with lower incomes pay a higher fraction of their income
than people with higher incomes.
S.E.C ANS - an independent federal agency that oversees the exchange of securities to protect investors
Law of Supply ANS - the principle that suppliers will normally offer more for sale at higher prices and
less at lower prices
D.J.I.A ANS - Dow Jones Industrial Average; stock market economy indicator
, Substitute Goods ANS - goods that can be used in place of other goods (Colgate/Crest, Toyota/Honda)
Business Cycle ANS - recurring fluctuations in economic activity consisting of recession and recovery and
growth and decline
Scarcity ANS - the condition that results from society not having enough resources to produce all the
things people would like to have
Crash of 1929 ANS - October 29; fell 23% over black monday and tuesday; borrowed funds to buy stocks
was the cause of the crash- potential to borrow 78% of the price; took 25 years to recover
Investment ANS - spending on capital equipment, inventories, and structures, including household
purchases of new housing
Peak ANS - of a period of maximal use or demand or activity
Barriers of Trade ANS - things that restrict the free exchange of goods and services between countries.
They include tariffs, quotas, rivers, mountains, and oceans
Deficit ANS - the property of being an amount by which something is less than expected or required
Quota ANS - a limitation on imports
Oligopoly ANS - (economics) a market in which control over the supply of a commodity is in the hands
of a small number of producers and each one can influence prices and affect competitors
3 tools of Federal Reserve ANS - money supply, interest rates, reserve requirements
Proportional Tax ANS - a tax for which the percentage of income paid in taxes remains the same for all
income levels
