FREE NAEP Economics Grade 12 Questions and Answers

0%

What alteration is most likely to result in an increase in employment?

Correct! Wrong!

An increase in consumer spending is generally expected to cause an increase in employment. When consumers spend more money on goods and services, businesses experience higher demand for their products. To meet this increased demand, businesses often need to expand their operations, which typically leads to the creation of new jobs.

Which of the following is most likely to occur if the United States Congress imposed a tariff on aluminum imports?

Correct! Wrong!

A tariff on aluminum imports into the US would raise the cost of producing goods made of aluminum by increasing the price of foreign aluminum for businesses and consumers. The cost of living for consumers could rise as a result of higher prices for products made of aluminum. The tariff may benefit some domestic industries, but it is likely to have a negative overall impact due to higher consumer prices and possible international retaliation.

Which of the following determines the majority of decisions in a market economy regarding the goods and services to produce, how to produce them, and who will consume them?

Correct! Wrong!

In a market economy, supply and demand on free markets govern resource allocation, production, and distribution. When making decisions, consumers and producers express their preferences and demands. Producers are encouraged to produce more when consumers demand more of them. Resource allocation is guided by this dynamic interaction, which also affects production, distribution, and consumption. The economy is shaped by individual preferences and decentralized decision-making.

Which of the following measures can the Federal Reserve take to ease the country's inflationary pressures?

Correct! Wrong!

When the cost of goods and services increases and the purchasing power of money decreases, inflationary pressures are present. The US central banking system, the Federal Reserve, raises interest rates to combat inflation. This reduces aggregate demand, discourages borrowing and spending, and supports long-term employment. This helps keep inflationary pressures in check and maintain price stability.

How would a significant increase in business and personal bankruptcies over a number of years affect the interest rates that banks charge on loans?

Correct! Wrong!

Banks may become more cautious about making loans due to increased credit risk if there is a significant increase in personal and business bankruptcies. Banks modify lending policies and raise interest rates to cover potential losses from loan defaults. Due to higher borrowing costs, borrowers may borrow less and spend less as a result. Increased bankruptcies have a knock-on effect on borrowing, spending, and overall economic activity.

Which of the following measures would most likely help to address the nursing shortage mentioned in the headline?

Correct! Wrong!

By paying nurses more, the nursing field attracts more candidates and attracts more people interested in nursing careers. Additionally, higher pay can help with nurse retention because it gives current nurses a reason to stick with the profession. In order to address the shortage and enhance healthcare services in the United States, raising the wage rate is probably going to result in an increase in the number of qualified nurses.

When a government offers copyright protection for recorded music, which of the following economic roles are they fulfilling?

Correct! Wrong!

Creators who are protected by copyright are given exclusive rights that acknowledge their ownership of their intellectual property, such as musicians and songwriters. This economic function encourages innovation and creativity in the music industry by preventing unauthorized duplication and distribution of the creators' work. Additionally, copyright protection encourages a fair and competitive music distribution market, deters unauthorized copying, and levels the playing field for authorized distributors and platforms. In general, copyright protection promotes creativity, helps artists, and keeps a legal music industry alive.

Jamie chooses to leave school and pursue a full-time job instead. When compared to a classmate who stays and completes college, what is most likely to happen to Janet's income?

Correct! Wrong!

The income that Jamie would have made had she stayed in school and graduated is the opportunity cost of Janet leaving. Since she won't have to pay for tuition or other expenses in the near future, her income might be higher. In contrast, because she lacks the same level of education as her classmate, who has graduated from college and has more opportunities for higher-paying jobs and higher promotions, her income is likely to be lower in the long run.

Consider a scenario in which the Japanese yen loses value on currency exchange markets in comparison to the US dollar. Which of the following scenarios most likely describes how US exports to Japan and US imports from Japan will change?
 United States Exports 
United States Imports             to Japan                             from Japan

Correct! Wrong!

American consumers must pay more for Japanese goods when the value of the yen drops, which reduces the amount of goods imported from Japan. Conversely, when the yen to dollar exchange rate falls to 200, American goods are less expensive for Japanese consumers, increasing exports to Japan. The overall purchasing power of Japanese goods and their appeal to American consumers are both impacted by this change in exchange rates.

Which of the following explanations best explains why the demand for gasoline will only slightly decrease despite a significant increase in price?

Correct! Wrong!

Due to the lack of close substitutes, gasoline demand remains stable despite significant price increases. Because there are few alternatives available to consumers, there is a "inelastic" demand for gasoline. Due to the lack of viable alternatives, consumers continue to purchase gasoline at a stable level.

Which of the following has the greatest impact on raising a nation's human capital?

Correct! Wrong!

Enhancing a nation's human capital is essential for promoting economic growth and productivity. It entails people learning new skills and honing their current ones to become more effective and productive. A workforce that is skilled and better able to meet the demands of an economy that is changing quickly results from investing in job training. Skilled workers have a higher chance of landing fulfilling jobs, making more money, and maintaining their relevance in the labor market. Job training promotes innovation, boosts productivity, and supports the expansion of the world economy.

How will T-shirt manufacturers in a cutthroat market react as the demand for T-shirts grows and the price of T-shirts rises?

Correct! Wrong!

T-shirt manufacturers must increase production as a result of rising demand and costs in a cutthroat market. They need to buy more raw materials, like cotton fabric, to meet this demand. This guarantees an adequate supply and increases manufacturing capabilities, gaining a larger market share and profiting from rising prices and increased demand. This maximizes earnings and revenue in the cutthroat market and is consistent with supply and demand principles.

Which of the following is most likely to cause short-term interest rates to decline?

Correct! Wrong!

A central bank's expansion of the money supply boosts the ability to borrow and lend, which increases bank competition. Because of this competition, short-term loan interest rates are lowered, encouraging consumers to borrow and spend more money and thereby fostering economic growth.

Lita ,discovers that a movie she rented is not as good as she expected after viewing a portion of it. Which of the following should she take into account when deciding whether to continue watching the movie?

Correct! Wrong!

Lita, is debating whether to keep watching a movie she rented after finding it to be less engaging than she had hoped. She ought to think about the lost opportunity cost of her time as well as the potential substitute activity. Lita may decide to stop watching the movie and start the substitute activity if it appeals to her more.

Which of the following sources provides the federal government with the most tax revenue?

Correct! Wrong!

The main sources of federal tax revenue are income taxes on individuals and corporations, which together will generate 40% and 10% of total revenue in 2021, respectively. Payroll taxes, excise taxes, estate taxes, which are paid by employers and employees on wages and salaries, and estate taxes on property transfers, are some additional sources of revenue.

In comparison to Country B, Country A spends more on worker training and education programs as a percentage of GDP. Which of the following statements is most likely to be accurate over time?

Correct! Wrong!

Country A invests more in training and education programs, resulting in higher skill development and human capital compared to Country B.

Lifetime Ad-Free Access @ $4.99

$4.99

Premium Tests $49/mo
FREE June-2024