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Economics Final Exam Review

Which of the following items is a want?

a. water
b. shelter
c. a new entertainment system
d. clothes

c. a new entertainment system

Which of the following was known as the father of economics?

a. Thomas Malthus
b. Adam Smith
c. Grover Cleveland
d. David Ricardo

b. Adam Smith

Which of the following terms did Adam Smith use to discuss the motivations of producers in the market place?

a. production possibilities
b. the want factor
c. the invisible hand
d. consumer sovereignty

c. the invisible hand

The study of economics involves looking at

a. limited wants and unlimited resources.
b. unlimited wants and unlimited resources.
c. limited wants and limited resources.
d. unlimited wants and limited resources

d. unlimited wants and limited resources

According to the economic theories promoted by Thomas Malthus, providing charity to those in need would

a. be self-defeating to the betterment of society.
b. be beneficial to the betterment of society.
c. have no effect on the betterment of society
d. none of the above

a. be self-defeating to the betterment of society.

The rules of government distribution do not eliminate competition.

True
False

True

Shortage and scarcity mean the same thing.

True
False

False

All goods and services are scarce.

True
False

True

Scarcity always exists.

True
False

True

Market competition allows people to have all that they want.

True
False

False

The allocation rule of “first come-first served” promotes productive cooperation.

True
False

False

An important function of government is to outlaw the use rule of force.

True
False

True

Competition through force remains common between governments in the form of wars.

True
False

True

In the United States economy, few resources, goods, and services are allocated through markets.

True
False

False

Market competition doesn’t eliminate scarcity.

True
False

True

All of the other options that are given up when a business makes one choice over another are called

a. opportunity costs.
b. trade-offs.
c. limited resources.
d. none of the above

b. trade-offs.

The cost of an economic decision that is the most attractive option that is given up because one choice was made over another. What is this called?

a. opportunity cost
b. trade-off
c. limited resource
d. none of the above

a. opportunity cost

All economic questions and problems arise from

a. opportunity costs.
b. trade-offs.
c. scarcity.
d. none of the above

c. scarcity.

A business chooses to build army tanks rather than butter-making machines, bread machines, or candy vending machines. What are these other alternatives called?

a. opportunity cost
b. trade-off
c. scarcity.
d. none of the above

b. trade-off

What is the main reason people make economic choices?

a. Their resources are unlimited.
b. There is an abundance of goods available.
c. Their resources are limited.
d. none of the above

c. Their resources are limited.

Which of the following cannot be shown on a production possibilities graph?

a. growth
b. efficiency
c. the allocation method
d. opportunity cost

c. the allocation method

Using the factors of production to produce one item means there are ________ resources to use in the production of another.

a. more
b. less
c. the same
d. none of the above

b. less

Which of the following is the name of the law that says that as a country produces less of one product and more of another, there is an increase in the resources needed to expand production of the second product?

a. law of decreasing costs
b. law of diminishing returns
c. law of increasing exchanges
d. law of increasing costs

d. law of increasing costs

Any intersection of points outside the frontier (line) on a production possibilities graph would show that the economy is

a. growing due to an increase of resources.
b. decreasing due to a decrease of resources.
c. growing due to a decrease of resources.
d. decreasing due to an increase in resources.

a. growing due to an increase of resources.

Any intersection of points inside the frontier (line) on a production possibilities graph would show that the economy is

a. using its resources to its full potential.
b. not using its resources to its full potential.
c. continuing to grow to its full potential.
d. stagnant and not growing to its full potential.

b. not using its resources to its full potential.

A country decides to produce wool. Which of the following key economic questions does this decision address?

a. What should be produced?
b. How should it be produced?
c. Who will be the consumers?
d. Who will market the products?

a. What should be produced?

Which of the economic goals correlates with the explanation “the ability of people to make choices”?

a. equity
b. innovation
c. efficiency
d. freedom

d. freedom

Which of the economic goals correlates with the explanation “decisions about how much workers should receive in income”?

a. security
b. equity
c. efficiency
d. innovation

b. equity

What is the main reason countries must carefully decide how they will produce the items they need?

a. Taxes must be paid to the United Nations.
b. Workers must be paid fairly
c. Resources are scarce
d. Unions will riot.

c. Resources are scarce

The location of resources around the world greatly influences which of the following?

a. The prices of those resources that are exported to other countries.
b. The prices of products that are made from those resources that are located in limited areas around the world.
c. The types of products that some countries can produce.
d. all of the above

d. all of the above

Adam Smith said that the free market economy is regulated by

a. competition and government intervention.
b. self-interest and government intervention.
c. self-interest and competition.
d. competition and cultural traditions.

c. self-interest and competition.

Which of the following is NOT an example of a market?

a. the counter in a donut shop
b. a bulletin board that contains advertisements
c. a garage sale
d. a teacher’s lesson plan book

d. a teacher’s lesson plan book

Which of the following statements is FALSE regarding the self-regulation of the market?

a. Producers are motivated by self-interest to produce a product.
b. Producers will increase their prices if they have too many products on hand.
c. Producers are motivated to provide products that consumers want.
d. Producers will sell products at lower prices in order to compete against other producers and sell their products.

b. Producers will increase their prices if they have too many products on hand.

Why do markets exist?

a. to provide a place for people to trade goods and services
b. to provide the government a place to enforce efficiency
c. to help producers dump unwanted products
d. to give consumers a place to sell their products

a. to provide a place for people to trade goods and services

Which of the following is NOT an advantage of a free market economy?

a. efficiency
b. growth
c. equality
d. freedom

c. equality

Which of the following economic goals is a major one of command economies?

a. equity
b. freedom
c. efficiency
d. innovation

a. equity

Which of the following statements regarding command economies is FALSE?

a. Consumer goods are in short supply.
b. Central planners decide what is produced.
c. The government owns the factors of production.
d. Self-interest influences the decisions made about production.

d. Self-interest influences the decisions made about production.

Which of the following usually involves one political party being in control?

a. republicanism
b. communism
c. socialism
d. capitalism

b. communism

Which of the following statements is TRUE?

a. Socialism developed from communism.
b. Capitalism developed from communism.
c. Communism developed from socialism.
d. Socialism developed from capitalism.

c. Communism developed from socialism.

Which of the following is NOT an advantage of command economies?

a. Citizens are guaranteed jobs.
b. People have little economic freedom.
c. Central plans can accomplish certain goals.
d. Certain businesses can be targeted for growth..

b. People have little economic freedom.

In a mixed economy, some government involvement in the economy is evident.

True
False

True

In a mixed economy, the government tries to help meet the needs of the public on a limited basis.

True
False

True

Government always plays the same role in any mixed economy.

True
False

False

In mixed economies, citizens pay taxes to fund government services.

True
False

True

Economic goals have no effect on the amount of government involvement in the economy.

True
False

False

Governments in mixed economies ensure the provision of a number of public goods, in hopes of providing equal access to them.

True
False

True

People living in the United States have less economic freedoms than those living in centrally planned economies.

True
False

False

Norway’s government owns a large portion of electric utilities.

True
False

True

France’s government has done little to encourage growth of jobs.

True
False

False

Citizens of Sweden receive free, government-supported health care.

True
False

True

Which benefit of the American Free Enterprise System is best represented by the following statement? “American consumers are kept from purchasing products that could cause them serious injury or illness.”

a. Economic Freedom
b. Variety of Goods
c. Government Protection
d. Responsive Prices

c. Government Protection

Which principle of the American Free Enterprise System is best represented by the following statement? “Buyers and sellers can easily buy and sell goods.”

a. Profit Motive
b. Private Property
c. Competition
d. Voluntary Exchange

d. Voluntary Exchange

John Maynard Keynes believed that the economy could be turned around and brought out of a depression by

a. passing higher taxes on businesses.
b. increasing government spending.
c. decreasing government spending.
d. increasing the minimum wage.

b. increasing government spending.

Which of the following government actions has a direct impact on the protection of consumers?

a. Manufacturers are required to put product ingredients on the label.
b. The government increases spending on interstate road projects.
c. Consumers are required to show proper identification when purchasing medications.
d. The government requires all businesses to provide hearing devices to deaf consumers.

a. Manufacturers are required to put product ingredients on the label.

What does the government provide to help protect the economic rights of citizens?

a. information about vehicle safety
b. information about interest rates
c. statistics about pollution dangers
d. statistics about traffic accidents

b. information about interest rates

Programs that give eligible citizens certain items for free or at a reduced cost are called

a. Social Security programs.
b. In-Kind Benefits.
c. Temporary Assistance for Needy Families.
d. Cash Transfer programs.

b. In-Kind Benefits.

Which of the following is NOT an example of a public good?

a. state park
b. interstate highway
c. bridge
d. underwater theatre

d. underwater theatre

Which of the following is NOT an action taken by the government to encourage innovation?

a. funding research
b. underwriting unemployment insurance programs
c. giving patents
d. employing scientists

b. underwriting unemployment insurance programs

Which of the following entrepreneurs is best known for revolutionizing the communications industry with his inventions?

a. Alexander Graham Bell
b. Michael Dell
c. Charles Duryea
d. Henry Ford

a. Alexander Graham Bell

Which of the following entrepreneurs is best known for making computers easy enough for anyone to use?

a. Charles Duryea
b. Michael Dell
c. Bill Gates
d. Peter Goldmark

c. Bill Gates

Which of the following is a characteristic of discretionary spending?

a. required by law
b. covers spending on entitlement programs
c. government can make decisions on how to spend the money
d. includes spending in categories of education and national defense

c. government can make decisions on how to spend the money

State governments use taxes to fund which of the following?

a. national defense
b. customs administration
c. national elections
d. highway construction

d. highway construction

Which of the following is NOT a source of tax revenue of the federal government?

a. sales taxes
b. excise taxes
c. estate taxes
d. import taxes

a. sales taxes

Which of the following is the biggest source of revenue for local governments?

a. gift taxes
b. property taxes
c. excise taxes
d. import taxes

b. property taxes

Which of the following best explains why governments collect taxes?

a. to fund programs that promote the health and general welfare of the population
b. to discourage immigrants from settling in the country
c. to ensure that no one gets too rich
d. to create a savings account for the nation’s farmers

a. to fund programs that promote the health and general welfare of the population

The Office of Management and Budget does NOT perform which of the following functions?

a. manages the budget
b. prepares the budget
c. vetoes the budget
d. recommends changes in the budget

c. vetoes the budget

Congress can override the President’s veto of the budget by

a. appealing to the Supreme Court.
b. a 2/3 majority vote.
c. adding an amendment to the Constitution.
d. a 2/3 majority vote of state governors.

b. a 2/3 majority vote.

Expansionary fiscal policies are designed to

a. boost the economy.
b. slow the economy.
c. balance the economy.
d. have no effect on the economy.

a. boost the economy.

When the government increases taxes

a. the economy prospers.
b. consumers are not affected.
c. consumers have more money to spend.
d. the economy slows down.

d. the economy slows down.

Which of the following is not one of the results of having a national debt?

a. There is less money to invest.
b. Interest must be paid to those who buy bonds.
c. There is more money to invest.
d. Funds are diverted from important social programs.

c. There is more money to invest.

Which of the following is known as the research branch of the Federal Reserve?

a. Interest Rate Board
b. Board of Governors
c. Federal Advisory Council
d. Federal Open Market Committee

c. Federal Advisory Council

Which of the following is NOT a function of the Federal Reserve?

a. check clearing
b. enforcing truth in lending laws
c. performing bank examinations
d. supervising the New York Stock Exchange

d. supervising the New York Stock Exchange

Which of the following is NOT a tool used by the Federal Reserve to implement monetary policy?

a. buying and selling foreign stocks
b. adjusting reserve requirements
c. adjusting the discount rate
d. buying and selling bonds

a. buying and selling foreign stocks

Which of the following situations would most likely cause the Fed to increase the money supply?

a. when the discount rate is high
b. when the prime rate is low
c. when the economy is in an expansion
d. when the economy is in a contraction

d. when the economy is in a contraction

Which of the following actions of the Fed is performed most often?

a. adjusting reserve requirements
b. conducting open market operations
c. adjusting the discount rate
d. overseeing the national budget

b. conducting open market operations

In terms of the law of demand, which of the following is said to occur when the price of a good increases?

a. The quantity demanded remains the same.
b. The quantity demanded increases.
c. The quantity demanded decreases.
d. There is no affect on the quantity demanded.

c. The quantity demanded decreases.

If a seller notices he or she is not selling much of a particular product, he or she is most likely going to

a. pull the item off of the shelf.
b. reduce the price of the item.
c. increase the price of the item.
d. place more of the item on the shelf.

b. reduce the price of the item.

When someone chooses to purchase one item over another because it is cheaper, this is known as the

a. Substitution Effect.
b. Income Effect.
c. Budget Effect.
d. Version Effect.

a. Substitution Effect.

The Income Effect states that if a change in prices causes consumers to have lower real incomes, then consumers would

a. demand a greater quantity of goods than normal.
b. demand a lesser quantity of goods than normal.
c. demand the same quantity of goods as normal.
d. stop demanding a good.

b. demand a lesser quantity of goods than normal.

When someone is willing to continue to purchase a good even though its price rises dramatically, the demand for the good is said to be

a. elastic.
b. inelastic.
c. flexible.
d. unaffected.

b. inelastic.

Quantities listed in market demand schedules are ______________ those found in individual demand schedules.

a. smaller than
b. larger than
c. the same as
d. none of the above

b. larger than

Angela loves to shop for clothes and receives a raise. Applying what you have learned about changes in demand, an individual demand curve will probably show which of the following?

a. Angela will not shop as much as she previously did.
b. Angela’s demand for clothing will decrease.
c. There will be no change in Angela’s demand for clothing.
d. Angela’s demand for clothing will increase.

d. Angela’s demand for clothing will increase.

The population of Barneyville decreases because a local plant has downsized and cut 200 jobs. A market demand curve for housing will probably show which of the following?

a. New residents will not buy as many houses.
b. The demand for houses will decrease.
c. There will be no change in the demand for houses.
d. The demand for houses will increase

b. The demand for houses will decrease.

The law of supply states that

a. producers will produce or supply more of a good as the price of the good decreases.
b. producers will produce or supply more of a good as the price of the good increases.
c. as demand increases, supply decreases.
d. as demand decreases, supply decreases.

b. producers will produce or supply more of a good as the price of the good increases.

As prices rise, producers will increase production of a product because

a. they are required to by law.
b. they want to decrease the volume of sales.
c. they want to obtain higher profits.
d. they are spending less money on resources.

c. they want to obtain higher profits.

Which of the following are factors that can cause a shift in supply?

a. demand decreases and competition increases
b. demand increases and competition decreases
c. less availability of products and increasing market share
d. production increases and establishment of new companies

d. production increases and establishment of new companies

Which of the following statements is the best example of the in-elasticity of supply?

a. A barber shop changes its hours of operation.
b. A wheat farmer must harvest his crop when it is ripe.
c. A pizza parlor makes twice as many pizzas on Saturdays than on Wednesdays.
d. A grocery store expands its produce section.

b. A wheat farmer must harvest his crop when it is ripe.

In the long term, the elasticity of supply is affected most by

a. time.
b. resources.
c. labor.
d. capital.

a. time.

Supply curves are created when the data from a

a. demand curve is graphed.
b. demand schedule is graphed.
c. supply schedule is graphed.
d. store’s daily receipts is collected.

c. supply schedule is graphed.

Which of the following statements is FALSE?

a. Individual supply schedules show the amount that one firm is willing to supply at a variety of prices.
b. Supply curves move up and to the right.
c. Market supply schedules include all firms that sell a product in one market.
d. Supply schedules take a variety of factors into account and assume that nothing stays the same.

d. Supply schedules take a variety of factors into account and assume that nothing stays the same.

Which of the following involves government payments to suppliers?

a. regulations
b. subsidies
c. excise taxes
d. bonds

b. subsidies

The location where the quantity supplied and the quantity demanded meet on a graph is called

a. disequilibrium.
b. equilibrium.
c. shortage point.
d. surplus point.

b. equilibrium.

Equilibrium can only occur at

a. one price.
b. two prices.
c. three prices.
d. four prices.

a. one price.

Which of the following statements is FALSE?

a. At equilibrium, quantity supplied equals quantity demanded.
b. At equilibrium, the market is stable.
c. Surpluses cause problems for suppliers.
d. Excess demand is handled by decreasing prices.

d. Excess demand is handled by decreasing prices.

Price ceilings are often established in order to

a. help farmers.
b. create excess supply.
c. keep products affordable for consumers.
d. keep products affordable for suppliers.

c. keep products affordable for consumers.

Which of the following will NOT cause a shortage?

a. war
b. increase in prices
c. scarcity of resources
d. extreme weather

b. increase in prices

Sole proprietorship are owned by

a. one person.
b. two people.
c. three people.
d. an investment group.

a. one person.

Partnerships in which only one person takes responsibility and the rest of the partners provide only money is called

a. general partnership.
b. limited partnership.
c. limited liability partnership.
d. liability partnership.

b. limited partnership.

Corporations are owned by

a. brokerage firms.
b. one person.
c. the government.
d. stockholders.

d. stockholders.

What combination results when a corporation purchases other corporations that don’t produce the same types of goods?

a. horizontal mergers
b. vertical mergers
c. conglomerates
d. multinational

c. conglomerates

When one firm is able to dominate the market and no other firm is able to enter the market, a(n) ______________ has formed.

a. oligopoly
b. monopoly
c. conglomerate
d. vertical merger

b. monopoly

Which of the following is NOT a characteristic of money?

a. It is transferable.
b. It is accepted everywhere.
c. It is difficult to divide.
d. It is easy to carry around.

c. It is difficult to divide.

You are able to purchase goods with paper money because it acts as a

a. unit of account.
b. store of value.
c. certificate of debt
d. medium of exchange

d. medium of exchange

Which of the following government agencies determines how much money is in the economy?

a. Treasury Department
b. Federal Reserve
c. Bureau of Minting and Engraving
d. Office of Management and Budgeting

b. Federal Reserve

Which of the following functions is NOT provided by financial institutions?

a. collecting taxes
b. storing money
c. providing opportunities for investing
d. lending money

a. collecting taxes

Which of the following financial institutions is known as a cooperative association?

a. commercial banks
b. credit unions
c. savings banks
d. finance companies

b. credit unions

Municipal bonds are issued by

a. state and local governments.
b. the federal government.
c. corporations.
d. nonprofit organizations.

a. state and local governments.

An investor owns a piece of the company when he/she buys

a. bonds.
b. certificates of deposit.
c. mutual funds.
d. stocks.

d. stocks.

Which of the following is considered a low-risk investment?

a. stocks
b. certificates of deposit
c. mutual funds
d. junk certificates

b. certificates of deposit

Which of the following statements is FALSE?

a. Investing is beneficial to the economy.
b. Financial intermediaries are beneficial to investors.
c. Bonds are a high-risk type of investment.
d. Certificates of deposit earn more interest than savings accounts.

c. Bonds are a high-risk type of investment.

Many companies depend on the sale of shares of stock when they

a. want to downsize.
b. want to expand.
c. are being audited.
d. hire a new president or executive on the board.

b. want to expand.

What do we call the total value of all final goods and services produced within a country in a given year?

a. Gross National Product
b. Gross Final Product
c. Gross Domestic Product
d. Gross Capital Product

c. Gross Domestic Product

Which of the following is NOT a specific goal of U.S. economic policy?

a. security
b. freedom
c. growth
d. increased importation

d. increased importation

What do we call GDP that uses constant, unchanging prices?

a. real GDP
b. factual GDP
c. nominal GDP
d. constant GDP

a. real GDP

Adding up all of the income in an economy in a given year is one approach to calculating which of the following?

a. Gross National Product
b. Gross Domestic Product
c. Gross Final Product
d. Gross Capital Product

b. Gross Domestic Product

Which of the following definitions most accurately defines the phrase “final goods and services”?

a. Those goods used in the production of another good.
b. Those goods used in the production of secondary equipment.
c. Those goods purchased by consumers.
d. Those goods exported to other countries.

c. Those goods purchased by consumers.

At which phase of the business cycle do GDP figures level off after a period of growth?

a. expansion
b. trough
c. peak
d. contraction

c. peak

What is it called when GDP figures decline but prices rise?

a. stagflation
b. expansion
c. recession
d. depression

a. stagflation

Which of the following is NOT a factor that influences the business cycle?

a. interest rates
b. income tax figures
c. customer viewpoints
d. capital investment

b. income tax figures

Which of the following is NOT considered a leading indicator used by the Conference Board?

a. stock prices
b. orders for new goods
c. interest rates
d. Social Security figures

d. Social Security figures

Typically, the Stock Market will often _____________ before a recession occurs.

a. remain steady
b. drop sharply
c. rise sharply
d. none of the above

b. drop sharply

Which of the following types of unemployment is due to a change in the business cycle?

a. structural
b. frictional
c. cyclical
d. seasonal

c. cyclical

Sara decided to leave her teaching job because the commute was too long. What type of unemployment is this?

a. cyclical unemployment
b. structural unemployment
c. seasonal unemployment
d. frictional unemployment

d. frictional unemployment

Which of the following is the correct calculation for determining the unemployment rate?

a. The number of unemployed divided by 100.
b. The number of unemployed divided by the number of total labor force multiplied by 100.
c. The number of the labor force multiplied by 100 and then subtract the number of unemployed.
d. The number of the total labor force divided by the number of unemployed multiplied by 100.

b. The number of unemployed divided by the number of total labor force multiplied by 100.

An unemployment rate of _________ percent shows a healthy economy.

a. 24
b. 15
c. 4
d. 0

c. 4

When businesses have to compete for workers and raise wages, this can cause

a. an increase in prices.
b. a decrease in prices.
c. an increase in the unemployment rate
d. an increase in the total labor force.

a. an increase in prices.

The Consumer Price Index is used to calculate how

a. prices have changed over the years.
b. goods have changed over the years
c. taxes have changed over the years
d. wages have changed over the years.

a. prices have changed over the years.

Which of the following is NOT one of the theories of the causes of inflation?

a. Cost-Push Theory
b. Demand-Pull Theory
c. Quantity Theory
d. Quality Theory

d. Quality Theory

Inflation is used as a measure of economic performance because it can

a. show increases or decreases in the business cycle.
b. show economists if the prices of goods have changed over time or if the economy has expanded
c. represent the tax rate of certain products.
d. show economists if the purchasing power of consumers has impacted the economy

b. show economists if the prices of goods have changed over time or if the economy has expanded

Which of the following statements best explains the term inflation?

a. Inflation is the decrease of taxes over time
b. Inflation is the increase of taxes over time.
c. Inflation is the increase of prices over time.
d. Inflation is the decrease of interest rates over time.

c. Inflation is the increase of prices over time.

What might the government or the central bank do to counteract the effects of inflation?

a. increase taxes
b. decrease spending
c. decrease the amount of money in circulation
d. all of the above

d. all of the above

Which of the following is NOT a major benefit of international trade?

a. Countries improve efficiency through producing goods in which they have the lowest opportunity cost.
b. Countries earn revenues from tariffs that are placed on imported goods
c. Companies gain the goods and services they need.
d. Host countries benefit by gaining jobs and tax revenue from multinational corporations.

b. Countries earn revenues from tariffs that are placed on imported goods

A(n) ______________ advantage is the ability of one person or nation to produce a particular good at a lower cost than another person or nation.

a. comparative
b. trade
c. protective
d. absolute

d. absolute

Which of the following is NOT a major import of the United States?

a. coal
b. vehicles
c. clothing
d. chemicals

a. coal

Which of the following is NOT a type of trade barrier?

a. import quotas
b. voluntary export restraints
c. income taxes
d. tariffs

c. income taxes

Which of the following allowed Congress to grant Most Favored Nation status to U.S. trading partners?

a. World Trade Agreement Act
b. Reciprocal Trade Agreement Act
c. North American Free Trade Agreement Act
d. National Trading Partner Act

b. Reciprocal Trade Agreement Act

Which of the following areas of the world or countries is NOT considered developed economically?

a. United States
b. Australia
c. Northern Africa
d. Western Europe

c. Northern Africa

Which of the following is NOT considered in determining the level of development of a country?

a. level of education
b. health of citizens
c. availability of essential and nonessential products
d. number of social organizations

d. number of social organizations

Which of the following is a characteristic of a less developed country?

a. high literacy rates
b. high unemployment
c. generally healthy population
d. few subsistence farmers

b. high unemployment

Countries with traditional economies are often less developed because

a. people are resistant to change.
b. people have political freedom.
c. farmers institute new farming techniques.
d. there is little need for medical facilities.

a. people are resistant to change.

Which of the following is a characteristic of a developed country?

a. low level of education
b. many subsistence farmers
c. high rates of industrialization
d. high unemployment

c. high rates of industrialization

Which of the following statements about the World Bank is FALSE?

a. It makes loans to LDCs for economic development.
b. It helps fund improvements in transportation.
c. It receives donations from developed countries.
d. It receives loans from developed countries

d. It receives loans from developed countries

Which of the following statements about the United Nations Development Program is FALSE?

a. It was organized in the mid 1960s.
b. Its main goal is the eradication of poverty.
c. Its funding comes from required donations from UN member nations.
d. It provides grants to LDCs to help them improve their economies.

c. Its funding comes from required donations from UN member nations.

Which of the following statements about the International Monetary Fund is FALSE?

a. It was established to oversee one world currency.
b. It was originally established to stabilize international exchange rates.
c. It aids and oversees development projects.
d. Its aid is not usually monetary in focus.

a. It was established to oversee one world currency.

Exchange rate systems in which governments try to keep their currency values consistent with each other are called __________ exchange rate systems

a. constant
b. fixed
c. similar
d. parallel

b. fixed

Flexible exchange rate systems are calculated according to

a. global currency values.
b. United Nations regulations.
c. supply and demand.
d. world trade agreements.

c. supply and demand.
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