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Exploring Economics
Quiz and Exam Book
Answer Key
Ray Notgrass
Design by Mary Evelyn Notgrass
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Exploring Economics Quiz and Exam Book Answer Key 1
10. Less income now could mean more income b (4); 14. d (4); 15. b (5); 16. a (5); 17. c (22); 18. a
later; not attending college now could make it (22); 19. b (24); 20. c (6); 21. b (6); 22. b (7); 23. a (7);
harder to go to college later in life; going to col- 24. a (9); 25. a (10); 26. c (11); 27. d (12); 28. a (13);
lege could mean not being able to start ones own 29. b (16); 30. a (17); 31. c (17); 32. d (18); 33. b (18);
business. Other answers possible. 34. a (19); 35. b (20); 36. c (23); 37. d (23); 38. d (23);
39. a (23); 40. d (2); 41. c (2); 42. a (1); 43. d (22);
Lesson 25 44. production, distribution, and consump-
tion (1); 45. traditional (or barter), capitalist (or
1. In capitalism, the millions of people who par- market or free market); command (or socialist
ticipate in buying and selling in the market make or government-controlled) (2); 46. material re-
economic decisions; in socialism, central planners sources, human resources, capital (23); 47. d; 48.
make decisions about what will be oered and at c; 49. b; 50. e; 51. a (47-51: Lesson 25)
what price.
2. Economic eciency: people in the economy Unit 6
being as productive as possible in making goods
and services for consumers Lesson 26
3. Economic equity: having goods and services
shared as equally as possible among the people 1. A market is anywhere sellers oer goods and
in a society services and buyers purchase them.
4. Economic freedom: allowing people to buy 2. Increased demand in the oil market can raise
and sell whatever they want in an economy prices in the corn market because corn is used for
5. Economic security: guaranteeing that people ethanol. A decrease in the price for personal MP3
have jobs, health care, and other things that are players might lead to a decrease in the price for
considered necessities of life compact discs, as the demand for compact discs
6. Economic stability: protection from fluctuation decreases. Other answers possible.
in economic activity (boom and bust cycles), or 3. Capital goodsitems such as machinery that
at least protection from serious loss during these produce other goods; producer goodstools
fluctuations and raw materials used in production; consumer
7. Not collecting property taxes, building new goodsgoods that are purchased by the end
roads, providing other benefits to attract a busi- user to meet his wants and needs and are con-
ness to a place; oering tax breaks for certain sumed; durable goodsconsumer goods that are
activities, such as exempting mortgage interest intended to last a long time
from taxable income 4. Markets define the nature and extent of econom-
8. Redistributing wealth by taxing some citizens ic freedom for an economy; markets accomplish
and using the revenue to give others direct pay- the allocation of resources and the distribution of
ments or goods and services goods and services that most fairly reflect what
9. Political science buyers and sellers value; markets determine the
10. Self-interest amount of goods and services that are produced
and the prices that are charged for those goods
Unit 5 Quiz and services.
5. Perfect competitionthe situation in which
1. d; 2. a; 3. d; 4. c; 5. d; 6. a; 7. c; 8. c; 9. b; 10. d there are many sellers and buyers and where each
individual seller and buyer has a negligible eect
First Exam (Units 1-5) on the price that is charged; monopolywhere
there is one seller of a good or service without a
100 points total. Questions 1-43 are worth two close substitute, and that seller can determine the
points each. Questions 44, 45, and 46 are worth price for and availability of what it oers; mo-
three points each. Questions 47-51 are worth one nopolistic competitionwhen several producers
point each. The lesson in which each answer is oer dierent unique goods and services that still
found is in parentheses. compete with each other; natural monopolya
situation in which economies of scale are such
1. c (1); 2. b (2); 3. d (2); 4. a (2); 5. a (2); 6. c (2); 7. b that production and distribution of a particular
(3); 8. c (3); 9. d (4); 10. c (4); 11. b (4); 12. d (4); 13. good or service is most eciently accomplished
Exploring Economics Quiz and Exam Book Answer Key 7
1.25
$3.00
r ve
Cu
pply
Equilibrium Su
1.00
$2.50
Price
0.75
$2.00 Shortage Surplus
0.50
$1.50
De
ma
nd
Cu
rv
e
0.25
$1.00
00 100
50,000 200
100,000 300
150,000 400
200,000
Quantity Supplied
Unit 7 9.
Lesson 31 Assets Liabilities
Reserves $500 Deposits $2,500
1. What a person can obtain with it Loans $2,000
2. Money is a commonly agreed-upon object of
value to both parties in an exchange. The bank can lend $250 more and still meet the
3. It is a way to show value to those with whom fractional reserve requirement.
you are doing business.
4. It is a way to maintain the value of your labor 10. Answers will vary. The Old Testament Law
over a long period of time. only forbade Israelites from charging interest
5. It is a way to demonstrate success or failure in to their fellow countrymen. The parable of the
a business or other endeavor. talents referred to banks paying interest (which
6. Money in the form of a commodity that has they could not do without charging interest)
value in itself without comment (see Matthew 25:27).
7. Money that has value not based on its relation
to a commodity but by the declaration of a na- Lesson 33
tions government that the money is legal tender
8. Information-based 1. A loan
9. The practice of technology, using knowledge 2. A certificate of indebtedness
and intelligence to convert seemingly useless 3. Corporate and government
matter into useful products, to generate wealth 4. A small part of the ownership of the company
where none existed before that is issuing the stock
10. The nations of the West will no longer be able 5. Bondholders
to lead. 6. Mutual funds are investment companies that
oer shares to the public. The mutual fund in-
Lesson 32 vests the money in a range of other companies.
7. A hedge fund buys and sells securities in an-
1. Banks provide a safe place to keep money, they ticipation of what the fund manager thinks the
enable people to earn money by paying interest securities are going to be worth in the future.
on savings, they encourage the buying of goods 8. Buying securities on credit by paying a small
and services by enabling people to use checks amount of money
and debit cards instead of having to use cash, 9. The gain or increase in value of capital assets
and they provide a central place for borrowers to 10. Answers will vary. An investment is a form
obtain loans. of borrowing in that the recipient is using money
2. Saving enables people to be less reliant on debt, that another person has put in his trust. The
it enables investments that help the economy to investor has the greater risk in such a situation
grow, and it gives people an opportunity to have because he could lose his investment, but the
a higher standard of living. recipient should feel a moral obligation to repay
3. Multiple-deposit expansion the investment if the business is profitable.
4. The practice of loaning out the majority of
money that a bank has on deposit and keeping Lesson 34
only a relatively small fraction of depositors
money on hand 1. A general increase in prices for goods and
5. The ability to carry debt services
6. The FDIC is an independent agency established 2. Friedman said that it is a printing press
by Congress. It insures the deposits of individu- phenomenon and a monetary phenomenon,
als in financial institutions. meaning that it is caused by the government
7. Interest printing too much money, specifically, when the
8. Nominal interest rates are the stated rates of quantity of money rises more rapidly than the
interest that are paid or charged. Real interest output of goods and services.
rates are the dierence between the nominal rate 3. Borrowing and printing more money
and the rate of inflation. 4. Increases in inflation and in unemployment
10 Exploring Economics Quiz and Exam Book Answer Key
trading with another country the U.S. government, and America developed an
7. Government payments to industries increasing dependence on foreign products, such
8. Money earned by foreign companies is rein- as oil and consumer goods.
vested in the U.S. 5. Exports, borrowing
9. They are whimsical and inconsistent. 6. Price
10. It is a form of extortion. 7. If we want to export to other countries, we have
to import from those countries.
Lesson 38 8. Both countries that engage in trade are better
o in the big picture.
1. Larger markets for a nations output of goods 9. Some people lose their jobs and have trouble
and services, which in turn means more jobs, finding other work.
greater economic opportunity, and a higher 10. Unemployment assistance, help in finding
standard of living; more goods and services another job, and retraining to learn new skills
available to people at prices they can aord; and
the opportunity for interdependence and mutual Lesson 40
understanding among trading nations
2. Reciprocal trade agreements 1. The price of one countrys currency expressed
3. General Agreement on Taris and Trade in terms of another countrys currency
4. The World Trade Organization 2. By the forces of supply and demand in cur-
5. Most Favored Nation (Permanent Normal rency exchange markets
Trade Relations) status: a nation is given all of 3. Cheaper dollars encourage foreigners to buy
the advantages that other nations receive in trade more American goods, while more expensive
with the U.S. dollars mean that foreigners are less likely to buy
6. An economic movement intended to help American goods because they cost more in terms
families and small companies in less-developed of their own currency.
countries compete in the world economy 4. By obtaining the appropriate currency in a
7. Kinds and quantities of goods and services currency exchange market to pay the company
oered, better communication, better transporta- in the foreign country
tion, lower transaction costs 5. Higher interest rates in the U.S. encourage
8. To increase imports more foreign investment, which means foreign
9. An internal transfer of income and wealth to investors buy more U.S. dollars, which increases
that industry from U.S. consumers their value in exchange markets.
10. Domestic policies that expand production and 6. Political instability or an economic recession
incomes while holding down inflation; greater will likely reduce the value of the currency in
stability and balance in macroeconomic policies; exchange markets. The wealthy in that country
limit any governmental trade adjustment assis- might want to buy currencies of other countries
tance to temporary aid; acknowledge the positive in order to maintain their wealth, which would
role of multinational corporations in the world lower the value of the currency ever further. If a
economy country is enjoying economic growth, the curren-
cy will be in greater demand and worth more.
Lesson 39 7. The exchange rate at which currency demand
equals currency supply
1. Building a factory in another country, invest- 8. The rate of exchange for goods and services
ing in a company (or in government bonds) in between one country and another
another country 9. The Chinese government pegged the value of
2. American investments in other countries pro- the yuan artificially low, then it maintained this
vide the financial capital to help those nations rate by buying huge amounts of American cur-
grow economically. American-built factories rency, which put large amounts of the yuan into
provide jobs for people in that country. exchange markets.
3. China and Japan 10. The eect of this policy was to encourage
4. A large part of the Federal governments defi- other countries to buy Chinese goods because
cits were paid for by foreign banks and private those other countries could buy the yuan cheaply
foreign investors purchasing bonds issued by to pay for Chinese products. It also made imports
12 Exploring Economics Quiz and Exam Book Answer Key
1. b; 2. a; 3. b; 4. c; 5. d; 6. d; 7. d; 8. a; 9. b; 10. c Lesson 43
Unit 9 1. Prayer
Lesson 41 2. Sales
3. The idea that just because a person is good at
1. To make a profit, to fulfill a dream, to train oth- one aspect of a business, he or she will be good in
ers, to help others achieve a higher standard of all areas of business
living 4. What is the demand? What niche might need
2. Sole proprietorship to be filled? What is the current supply? Can you
3. Partners share in the profits on whatever ba- meet the demand? What is the current and future
sis the partnership is set up, but each partner is level of competition?
responsible for all of the obligations of the busi- 5. Facility, capital goods, equipment, labor, mate-
ness. rials, technology
4. Corporation 6. Advertising, informing people about the ben-
5. Shares of stock efits of a product, recommendations from satis-
6. Limited liability company, professional corpo- fied customers
ration 7. Unique Selling Position: What your product or
7. Non-profit, charitable, tax-exempt corporation service oers that people cannot find elsewhere
8. Strained baby food 8. Do I have the time to succeed? Do I have the
9. Elijah McCoy money to begin? Can I adapt to changes in the
10. They built their empires locally, they were market? Can I handle financial loss?
highly inventive and creative, they wanted to 9. Failure, change, learning from others, not
build empires more than they wanted to make having the business revolve around him, letting
money, they followed Biblical principles, they others do some of the work
were fiercely independent and were averse to 10. Management, planning, money, location,
monopolies and government solutions to prob- overexpansion
lems.
Lesson 44
Lesson 42
1. The money a business makes by selling goods
1. 100 and services. It is the dierence between total
2. A person can be his own boss, make his own revenue and total cost.
decisions, start with relatively little money, and 2. Profit motivates eciency, taking risks, product
know his customers personally. Small businesses quality, lower prices, proper maintenance, and
can fill specialized niches and adapt to changes oering good wages and rewards to workers.
in the market. They give women and minorities 3. Multiplying the unit price of goods sold by the
their best opportunity to own and operate a busi- quantity sold
ness. 4. Quantity sold
3. Owners are personally responsible for all 5. Accounting profit is what can be shown in the
aspects of the business, they often have to work accounting books: revenue minus ledger costs.
long hours, and they answer to many people Economic profit also considers the opportunity
namely, their customers. Controlling costs is a cost as a real cost of the business.
major issue. 6. Fixed costs have to be paid regardless of the
4. A large company sells the right to use its name rate of production. Variable costs change depend-
and business model to a local person. ing on the amount of production.
5. Small businesses create 60-80% of new jobs in 7. Productivity of an input decreases as the quan-
the American economy each year. tity of the input increases.
6. If it lasts at least four years 8. Average marginal cost is determined by di-
7. Entrepreneur viding the change in total cost by the change in
Exploring Economics Quiz and Exam Book Answer Key 13
up interest rates and reduce the supply of money economic freedom, while Republicans were
available for loans to private entities timid about defending the ideas that had brought
6. Political courage to raise taxes, cut spending, about increased prosperity.
or enact some combination of both
7. Keeping the deficit to a low ratio of the gross Lesson 57
domestic product
8. The person who borrows money is obligated 1. Gross domestic product, inflation, and unem-
to repay it. ployment
9. Those who approve the borrowing do not face 2. An estimation of what a typical urban con-
the obligation to repay the creditors, but instead sumer has to pay for goods and services
that obligation is passed on to future genera- 3. A sampling of the prices in several cities for a
tions. market basket of goods and services
10. When the funds are devoted to capital invest- 4. The index does not reflect consumer prices
ment projects or when there are extraordinary in rural areas. It also does not reflect changes in
demands on revenues such as in war emergencies buying habits, and it does not immediately reflect
new products that come onto the market or how
Unit 11 Quiz consumers respond to changes in existing goods
and services.
1. a; 2. d; 3. c; 4. c; 5. b; 6. b; 7. b; 8. d; 9. a; 10. b 5. A monthly telephone survey of 60,000 homes
6. For every two percentage point change in the
Unit 12 real GDP above or below 3%, the unemployment
rate will change by about 1%.
Lesson 56 7. A figure that is an estimation of future economic
actvity based on information gathered by the
1. The market value of a nations total domestic Conference Board on ten areas of the economy
output of all final goods and services over a pe- 8. Lagging and coincident
riod of time 9. Layos generally occur after sales have started
2. The production of a nations permanent resi- to decline, while hiring increases after the level of
dents, whether that production occurs within the sales has begun to rise.
country or elsewhere 10. Levels of personal income and disposable
3. By totaling all expenditures or by totaling all personal income, consumer spending, producer
income prices, orders for durable goods, sales of new
4. 3% and existing homes, productivity
5. The nominal GDP is the actual total figure,
while the real GDP expresses output in terms Lesson 58
of a previous years dollar value (called the base
year) to account for the impact of inflation. 1. A marketreal or virtualwhere shares of
6. A way to compare the per capita GDP of vari- stock are bought and sold
ous countries by taking into account the dier- 2. The New York Stock Exchange
ences in the cost of living in various countries. 3. Fear and greed
PPP considers the long-term exchange rate be- 4. By investing in a mutual fund managed by
tween currencies to arrive at a common currency professional investors with a plan to keep invest-
of expression. ments in the fund for several years
7. The health of individual industries, how wealth 5. The DJIA takes the stock values of a few key
is distributed among the population, the value of companies traded on the NYSE and uses a for-
many things that are important to people, a direct mula to determine a cumulative value for those
indication of some quality of life issues stocks.
8. The previous 25 years have been the greatest 6. The National Association of Securities Dealers
period of prosperity in human history. Automated Quotations, an electronic stock mar-
9. A dramatic reduction in marginal tax rates, a ket
series of major deregulations, and a broad expan- 7. An index of the stock values of 500 companies
sion of trade traded on either the NYSE or the NASDAQ
10. Democrats wanted to reverse the trend of 8. A market where commodities such as farm
18 Exploring Economics Quiz and Exam Book Answer Key
products, energy sources, and metals are bought 2. Average personal worth: $100,000; average
and sold personal income: $49,000
9. An agreement for a speculator to buy a com- 3. Three times the amount of money needed for
modity from a producer at a specified time in the an economical food budget, adjusted for the
future for a price set today number of persons in a household
10. The stock market is a fairly good indicator 4. 13.2%
of the perceived success of large companies that 5. The percentage of total income earned by the
employ millions of people and that have a major wealthiest 1% of Americans increased, while the
impact on the economy. However, longer term percentage of total income earned by the rest of
trends that are published less frequently are Americans declined.
more complete indicators of economic activity. 6. In many poor households, people in the house-
Also, the stock market does not directly reflect hold do not work many hours; and the father is
what is happening with small businesses and the absent.
self-employed. 7. Answers will vary. The text explains that the
wealthy provide jobs for many people, make
Lesson 59 investments that help businesses grow, and pay
a large share of the taxes that fund government
1. Economists dier over the precise definition income redistribution programs. To say that the
of a recession and the precise determination of poor are poor because the rich are rich assumes a
when one starts and when it is over, and the me- stagnant, limited economic pie.
dia often hype coverage of economic activity. 8. He was robbed and beaten.
2. When the gross domestic product declines for 9. He was having trouble with his students, and
at least two consecutive quarters or six months almost from self-preservation he began talking
3. This definition does not consider any other to his students about business topics. He noticed
variables such as unemployment or consumer how the students started paying attention.
confidence, and most economists prefer to iden- 10. To recruit the best business and academic
tify a more precise starting point for a recession. minds to help their eorts, and to use high tech-
4. The National Bureau of Economic Research nology in all of NFTEs teaching models.
Business Cycle Dating Committee
5. A significant decline in economic activity Unit 12 Quiz
spread across the economy, lasting more than a
few months, normally visible in real GDP, real 1. J; 2. F; 3. A; 4. B; 5. G; 6. I; 7. D; 8. E; 9. H; 10. C
income, employment, industrial production, and
wholesale-retail sales Unit 13
6. Just over ten months
7. The periods between low points have generally Lesson 61
gotten longer.
8. Seven members of the Business Cycle Dating 1. One-sixth
Committee met by conference call on November 2. One-fourth
28, 2008 and determined that overall economic 3. 58%
activity peaked and began a decline in December 4. The situation in which a person does not bear
of 2007. the full risk of his decisions and actions and so
9. The NBER does not have a set definition of a tends to make dierent decisions as a result.
depression. 5. When bills from health care providers are not
10. A depression is generally understood to be a paid by the patient but by a third party (usually a
period of economic downturn that is more severe health insurance company or the government)
than a recession. One common rule of thumb is 6. Health care availability, health care costs,
that a depression involves a decline in the GDP health insurance, and personal responsibility
of more than 10%. 7. Answers will vary.
8. The problem is the approaching huge increase
Lesson 60 in the number of people who will soon be expect-
ing Social Security, Medicare, and private pen-
1. $53 trillion sion benefits, and the lack of resources to pay for
Exploring Economics Quiz and Exam Book Answer Key 19
cap over time, the permits become less numerous of the market as much as possible.
and thus more valuable and should increase in
price. Lesson 69
6. The United States competes in the world
economy on an unlevel playing field. The U.S. 1. Overall, it was a period of significant growth.
has some of the worlds most stringent environ- 2. Putting down 10-25% of the stock values and
mental regulations; but other countries, such as borrowing the rest from the broker, hoping to
China, have fewer regulations and as a result make a profit as stock prices rise
have lower production costs. 3. 40%
7. Christians should see the environment as Gods 4. An inadequate money supply and depositors
handiwork and its protection as a stewardship demanding their money in cash
from God. 5. It hurt U.S. trade and as a result hurt the
8. To develop more eective techniques for bring- economy.
ing mans economic activities into equilibrium 6. During World War II
with the natural world 7. It probably helped some, but it also hurt
9. A strategy of economic incentives to achieve some.
those goals 8. He says they were not nearly so desperate as
10. Our biological knowledge is so small that we some textbooks would have us believe.
do not have the basis to decide whether a species 9. He believes that a revolution was not likely at
should be preserved. all.
10. UAW members and college students
Lesson 68
Lesson 70
1. Output divided by hours worked
2. GDP divided by aggregate hours worked 1. Debt, government encouragement of home-
3. The technology used in production makes the ownership, and greed
inputs more productive. 2. Home buying increased, but many of those
4. A higher level of training and skill leads to who were granted mortgages were not prime
greater productivity by helping workers gain candidates for mortgages.
from improved technology and adapt to new 3. Investment instruments made up of bundles of
work situations. mortgages
5. All else being equal, the larger the workforce, 4. Many people defaulted on their mortgages,
the greater will be the productivity. and those properties became less valuable.
6. Immigration 5. Short term loans granted to businesses
7. Generally speaking, the more hours worked, 6. The government rescued investment com-
the greater the productivity. panies, sent stimulus checks to Americans, and
8. Investment in training, new equipment, and bought up toxic assets from lenders.
new technology enables a business to be more 7. They declared bankruptcy.
productive. 8. A large influx of investments from abroad
9. Business owners have to invest in new technol- 9. Bad decisions about granting mortgages, many
ogy and capital goods in order for their workers mortgage holders defaulting on their loans, and
to be more productive. Owners have to make a housing construction boom that led to a decline
sure that their workers are trained well. Manag- in house prices
ers have to use good people skills to motivate 10. To purchase troubled assets so that banks
workers. Owners have to provide or to seek out could resume making loans to families and busi-
investment so that their companies can grow. nesses
10. By keeping tax, debt, and inflation rates low;
by maintaining stable financial markets; by pro- Unit 14 Quiz
viding economic and political stability and elimi-
nating corruption; by encouraging education and 1. fewer, larger
job training programs as well as research and 2. foreign oil, harmful emissions
development; by seeking to expand international 3. carbon
trade; by staying out of the way of the operation 4. stewards
22 Exploring Economics Quiz and Exam Book Answer Key
5. Technology Lesson 72
6. investments
7. money supply 1. The moral economy is a concept that is used
8. marginal income to describe economic activity based on moral
9. Mortgage-backed principles such as goodness, fairness, honesty,
10. bankruptcy and justice.
2. Trust
Unit 15 3. When market activity was concentrated in lo-
cal communities
Lesson 71 4. As economic activity expanded and as produc-
ers and consumers became connected over long
1. Individuals make all of the dierence. Indi- distances and involved people they never met
viduals make economic decisions. If something who had dierent moral standards, the applica-
happens in the United States economy, it happens tion of moral principles in economic activity be-
because of individuals. A large economic activity came less assured. Consumers increasingly did
is engaged in by many individuals. Individuals not know the suppliers with whom they engaged
make decisions, consider opportunity costs, face in transactions. Addressing issues of product
tradeos, and deal with unintended consequenc- quality and honesty became more dicult.
es. Supply and demand in the market are created 5. Saving
by individuals. The largest companies, the most 6. Be honest in everything you do. Do not pres-
powerful labor unions, and the actions of govern- sure people. Always pay your bills on time.
ment all involve individuals. 7. Treat well those who work with you or for
2. On one hand, we believe that the spiritual you. Be aware of your impact on the environ-
realm is all that ultimately matters. On the other ment. Look for ways that you can give to other
hand, we live in the physical world. people or to good causes.
3. God places us in this physical world and tells 8. The capacity a person has to determine right
us to live well in it. We are to be wise in how we and wrong
handle our resources. We are to be compassionate 9. Making purchases in a way that helps other
toward the poor and the victims of injustice. We people and that is in keeping with your beliefs
are to work to provide for ourselves and to teach and standards
others to do the same. We are to live responsibly 10. You can help people you know, you can de-
in this world before the Judge of the universe. velop relationships with the people with whom
4. We give God the glory, and we can work with you do business, you can talk to a real person if
Him instead of against Him. you have a problem, and you can make a dier-
5. Since we have been given abilities, we have a ence for others in the community.
responsibility to use our abilities to support our-
selves and to bless others. Lesson 73
6. How you spend your time and how you spend
your money 1. A married couple needs to be together in their
7. God does not expect the impossible, but He thinking. They have to come together to develop
expects us to live up to our potential, with no a plan that is better than either one of them could
excuses. have devised individually.
8. UPS has been able to oer an alternative to 2. Give ten percent, save ten percent, and live on
the Postal Service for nationwide small package the rest with thanksgiving and praise.
delivery. UPS has transformed itself because of 3. Planning, prayer, and action
competition and has become the world leader in 4. Making it and keeping it
package distribution. The company is an innova- 5. Spending no more than what you earn
tor in transportation logistics and information 6. You will always be able to find someone who
technology. has more than you do and risk being depressed;
9. Teamwork and you will always be able to find someone who
10. He checked on a customer whose screen had has less than you do and risk being prideful.
come o a window, and he replaced the screen. You do not know what is going on in the other
persons life.
Exploring Economics Quiz and Exam Book Answer Key 23
those countries, and encouraging greater produc- 14. Training, knowing how to use technology,
tivity and political freedom in those countries. working enough hours, and making wise deci-
See Lessons 36, 38, and 39. sions early in life are possible answers. See Les-
9. These measurements tell us about productiv- son 68.
ity, inflation, where the economy appears to be 15. Possible answers: the danger of greed, debt,
headed, and the health of the largest corpora- or the problems associated with the government
tions. See Lessons 56-58. bailing out failing businesses. See Lesson 70.
10. Possible answers: allowing market forces to 16. Being responsible, doing what is right regard-
work through competition and personal respon- less, trusting God and not material things, and
sibility for medical costs, allowing insurance setting a good example are possible answers; but
companies to compete across state lines, allow- other answers are possible. See Lesson 71.
ing Medicare recipients to control at least some of 17. Setting goals, making a budget, deciding not
their health care dollars. See Lessons 61-62. to go into debt, giving faithfully; other answers
11. Possible answers: domestic oil production, possible. See Lesson 73.
concentration on alternative energy sources, 18. Possible answers: not getting caught up in
developing cars that run on electricity, and gov- materialism, trying to support justice, helping
ernment encouragement of these developments. those in need, seeing greed and shady business
Other ideas possible. See Lesson 63. tactics as just as wrong as government waste. See
12. Answers will vary. The government bailouts Lessons 73 and 75.
kept many people working, but they also inter- 19. Answers will vary. Look for specific ideas and
fered with market forces. See Lesson 64. reasons.
13. Some government regulation is probably es- 20. Answers will vary. Again, look for specifics.
sential, but finding market-based solutions will
oer the best answers. See Lesson 67.
Also by Ray Notgrass
Exploring America
Exploring Government
A complete, one-semester study for high school students about American Federal,
state, and local government, with special emphasis on the U.S. Constitution.
Package includes a collection of historical documents, speeches, and essays.