1) When the national gross domestic product (GDP) decreases in size, we say that the economy is experiencing _____.
2) This group of economists advocates for extreme cuts in government spending, to prevent inflationary spending during an economic downturn.
- aThe Chicago School
- bThe Berlin School
- cThe French School
- dThe New York School
- eThe Austrian School
3) _____ allow(s) governments to use public money to influence private markets, without exercising direct ownership over a particular company or sector.
- bPublic trading
4) Keynes’s position that a government should continue to spend money during a recession, as borrowing rates are low, is referred to as _____.
- apopular solidarity
- bbudget austerity
- cdeficit spending
- dfiscal responsibility
- emonetary activism
5) When mortgage holders are unable to make minimum payments on their housing loan, their house can go into _____.
6) Which of the following did NOT contribute to the Import Substitution Industrialization model?
- aHigh tariffs limited imports
- bRegulations prevent some foreign products from entering domestic markets
- cConsumers demanded more international products
- dDe-colonization made it politically unattractive to import from abroad
- eComparative advantage showed the model was inefficient
7) This model of economic management derived its philosophy from political Marxism-Leninism.
- aBureaucratic socialism
- cImport Substitution Industrialization
- dExport-led Industrialization
- eLaissez-faire economics
8) Why was the 2008 financial crisis also a more complex monetary crisis for Europeans in a way that was not the case in the United States?
- aThe European Union was powerless to do anything.
- bThe common euro currency did not coincide with common fiscal law.
- cThe components of the crisis were different than in the United States.
- dThe human nature of Europeans meant that they responded more slowly.
- eGovernments were less involved in their economies than in the United States.
9) Which phenomenon best explains the shift away from command economics and toward free market development across the world?
- aFall of communism
- bThird wave of democracy
- cGeorge W. Bush’s foreign policy
- dGlobal warming
10) Which of the following sectors has traditionally been run as a government-backed monopoly, due to high start-up costs and economies of scale?
- dWater and sewage
- eAll of the above