FBLA Economics Objective Test
Questions and Answers
As supply decreases and demand decreases, what effect does this have on equilibrium
price and quantity? - Answer-Price indeterminant, quantity decreases
Which of the following would all decrease supply? - Answer-Higher business taxes,
higher resource costs, fewer suppliers
Suppose a price floor is placed on wheat, what is the likely effect? - Answer-A surplus
Suppose a binding price ceiling is placed on gasoline, what is the likely effect? -
Answer-A shortage
A supply increase will - Answer-a decrease in equilibrium price
An equal increase in demand and supply will always result in an increase in the market
price. - Answer-False
Comparative advantage argues that if two countries specialize and engage in free trade
- Answer-they will both gain
The appreciation of the yen versus the dollar means a vacation for Japanese tourists
coming to the United States is - Answer-cheaper
The appreciation of the yen versus the dollar means the value of the dollar has -
Answer-depreciated
Monetary policy to fight demand-pull inflation would - Answer-increase reserve
requirement, raise discount rate, and buy government securities
Government borrowing that leads to less private borrowing and investing is called -
Answer-crowding out effect
A fiscal policy to fight demand-pull infaltion would - Answer-raise taxes
A recession caused by too little aggregiate demand would require which of the following
policies? - Answer-expansionary fiscal policy
Suppose $200 cash is deposited in a bank and the reserve requirement ratio is 10%.
How much can demand deposits expand? - Answer-$1,800
Suppose $200 cash is deposited in a bank and the reserve requirement ratio is 10%.
What is considered the excess reserves? - Answer-$180
Questions and Answers
As supply decreases and demand decreases, what effect does this have on equilibrium
price and quantity? - Answer-Price indeterminant, quantity decreases
Which of the following would all decrease supply? - Answer-Higher business taxes,
higher resource costs, fewer suppliers
Suppose a price floor is placed on wheat, what is the likely effect? - Answer-A surplus
Suppose a binding price ceiling is placed on gasoline, what is the likely effect? -
Answer-A shortage
A supply increase will - Answer-a decrease in equilibrium price
An equal increase in demand and supply will always result in an increase in the market
price. - Answer-False
Comparative advantage argues that if two countries specialize and engage in free trade
- Answer-they will both gain
The appreciation of the yen versus the dollar means a vacation for Japanese tourists
coming to the United States is - Answer-cheaper
The appreciation of the yen versus the dollar means the value of the dollar has -
Answer-depreciated
Monetary policy to fight demand-pull inflation would - Answer-increase reserve
requirement, raise discount rate, and buy government securities
Government borrowing that leads to less private borrowing and investing is called -
Answer-crowding out effect
A fiscal policy to fight demand-pull infaltion would - Answer-raise taxes
A recession caused by too little aggregiate demand would require which of the following
policies? - Answer-expansionary fiscal policy
Suppose $200 cash is deposited in a bank and the reserve requirement ratio is 10%.
How much can demand deposits expand? - Answer-$1,800
Suppose $200 cash is deposited in a bank and the reserve requirement ratio is 10%.
What is considered the excess reserves? - Answer-$180
