Chapter #1- Section #1 Test

Question 1

Economics is the allocation of resources through __________ and __________.

Answer 1

Supply; demand

Question 2

What does scarcity mean?

Answer 2

Limited resources

Question 3

What kind of money is the safest kind because it is tangible?

Answer 3

Commodity money

Question 4

What are the most common items used as commodity money?

Answer 4

Silver and gold

Question 5

Writing a check is an example of using what kind of money?

Answer 5

Representative money

Question 6

What kind of money is the worst because it has no value in and of itself?

Answer 6

Fiat money

Question 7

People accept fiat money for payments of what two things because powerful governments operate on fiat money?

Answer 7

Goods and services

Question 8

Who said this life principle?:

“Never spend your money before you have earned it.”

Answer 8

Thomas Jefferson

Question 9

At the heart of every economic system is:

Answer 9

A set of ideas

Question 10

A better name for government property in the United States is:

Answer 10

Public property

Question 11

In the United States, what do individuals have the right to own?

Answer 11

Private property

Question 12

What is the term that describes a government taking a greater percentage in taxes as your income increases?

Answer 12

Progressive income tax

Question 13

Excessive government _____________ causes serious problems in private lives as well as in a nation’s _________

Answer 13

Regulation; economy

Question 14

What is inflation defined as?

Answer 14

An increase in the fiat (or paper) money supply

Question 15

What happens to businesses prices when the government increase the money supply?

Answer 15

The prices rise

Question 16

Who said this life principle?:

“By failing to prepare, you are preparing to fail.”

Answer 16

Benjamin Franklin

Question 17

Production

Answer 17

Process of turning raw materials into products

Question 18

Consumption

Answer 18

Customer purchases of goods and services

Question 19

Demand

Answer 19

Amount of goods/service consumers want to purchase

Question 20

Supply

Answer 20

Total amount of a good or service available for purchase

Question 21

A Free Enterprise System is also known as:

Answer 21

Capitalism/laissez-faire economics

Question 22

International ________ can lead to ________ quality goods due to increased competition

Answer 22

Trade; better

Question 23

Who said this life principle?:

“Never let the things you can’t do, stop you from doing what you can.”

Answer 23

Ronald Reagan

Question 24

What is federalism?

Answer 24

A union of states under a central government

Question 25

What does federalism help ensure about the federal government?

Answer 25

That the federal government does not become too powerful, forcing its will upon the states

Question 26

Municipal laws pertain to what level of government?

Answer 26

Town or city

Question 27

What document did the Pilgrims create prior to departing the Mayflower?

Answer 27

The Mayflower Compact

Question 28

The principles by which the Pilgrims agreed to govern themselves by were taken from:

Answer 28

The Bible

Question 29

The Separation of Powers incorporated into governments at the state and federal levels was based on the Founders' belief that:

Answer 29

Men might abuse their power, and men are degenerate (capable of doing wrong)

Question 30

According to Thomas Jefferson, what is bad government a result of?

Answer 30

Too much government

Question 31

What was it like in the early years of our Nation?

Answer 31

Fewer government regulations and citizens were free to pursue their dreams unrestrained by government regulations

Question 32

What are deficits?

Answer 32

Assets that exceed revenues

Question 33

In early America, belief in liberty to pursue happiness, unfettered by government intervention, resulted in the greatest _____________ and __________ the world has ever know

Answer 33

Prosperity; wealth

Question 34

Does the US government economic policies in the 21st century closely follow the policies put in place by America's Founders?

Answer 34

No

Question 35

Who said this life principle?: "Representative government can endure only with a moral population that embraces the concept of individual freedom."

Answer 35

R.E. Class

Question 36

What three things are men free to do in a free market economy?

Answer 36

1) Own property 2) Create a product or service 3) Buy, sell, or trade as desired

Question 37

Pure competition means...

Answer 37

People who create goods or provide services compete against one another for customers, and no outside entity interferes with the process

Question 38

Laissez-faire

Answer 38

Refers to a free market economy

Question 39

Based on the example Howe, Miller, and Charland, people living in America ARE NOT guaranteed what?

Answer 39

To be financially successful whether they work hard or not

Question 40

Communism is also referred to as __________ after its architect, _____ _____, and is based on a _______________ philosophy

Answer 40

Marxism; Karl Marx; collectivist

Question 41

Collectivism

Answer 41

The group as a whole is important, while individuals who comprise that group are expendable, and have few or no rights

Question 42

In communist nations, the government...

Answer 42

Owns most property and the means of production

Question 43

What are many people in socialist nations content to embrace?

Answer 43

A life subservient to the government in exchange for welfare benefits

Question 44

Who said this life principle?: "There is no difference between socialism and communism, except in the means of achieving the same ultimate end: communism...enslave (s) men by force, socialism-- by vote."

Answer 44

Ayn Rand