Economics for Social Sciences
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Course Introduction
Economics for Social Sciences introduces students to the foundational principles of economics with a specific focus on their application within the social sciences, such as sociology, political science, and psychology. The course explores core economic concepts including supply and demand, market structures, resource allocation, and public policy and examines how these concepts influence and are influenced by social behavior and societal institutions. Emphasis is placed on understanding the interplay between economic theories and real-world issues such as inequality, poverty, welfare, and development, providing students with analytical tools to critically evaluate social phenomena from an economic perspective.
Recommended Textbook
ECON MACRO 5th Edition by William A. McEachern
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19 Chapters
2883 Verified Questions
2883 Flashcards
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Chapter 1: The Art and Science of Economic Analysis
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Sample Questions
Q1) Unlike a service,a good:
A)is desirable.
B)uses resources to satisfy wants.
C)is physical and tangible.
D)is abundant and free.
E)is a resource.
Answer: C
Q2) The basic purpose of economic models is to:
A)construct simplifying assumptions about the real world.
B)explain reality in all its complexity.
C)collect empirical data to support the facts.
D)construct situations where controlled experiments can be carried out.
E)explain and predict economic events.
Answer: E
Q3) One problem with rent controls is that policy makers often ignore its secondary effects.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Economic Tools and Economic Systems
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Sample Questions
Q1) Which of the following is an example of the division of labor?
A)An author writing a book one chapter at a time
B)A firm trying to get rid of a labor union
C)Separating resources into four categories: land,labor,capital,and entrepreneurial ability
D)Allocating revenue among a firm's resource suppliers
E)Dividing an assembly process into separate steps
Answer: E
Q2) Each point along a nation's production possibilities frontier represents efficient use of all resources.
A)True
B)False
Answer: True
Q3) At all points along the production possibilities frontier,_____.
A)the greatest achievable output levels are illustrated
B)resources are not fully employed
C)more of one good can be obtained without giving up more of the other
D)more efficient output levels are possible
E)society is equally well off
Answer: A
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Chapter 3: Economic Decision Makers
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Sample Questions
Q1) In terms of the numbers of firms in the U.S.economy,the most common type of firm is the:
A)corporation.
B)partnership.
C)sole proprietorship.
D)nonprofit organization.
E)limited partnership corporation.
Answer: C
Q2) An import quota taxes an import but does not set a limit on how much may be imported.
A)True
B)False
Answer: False
Q3) Which of the following includes the four basic resources supplied by households?
A)Natural resources,labor,intelligence,capital
B)Money,labor,natural resources,entrepreneurial ability
C)Intellectual ability,physical ability,money,natural resources
D)Labor,capital,intelligence,entrepreneurial ability
E)Labor,natural resources,entrepreneurial ability,capital
Answer: E
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Chapter 4: Demand, supply, and Markets
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Sample Questions
Q1) A decrease in the price of peanuts will cause a leftward shift in the supply curve of peanut butter.
A)True
B)False
Q2) Suppose a market is in equilibrium.An increase in demand in this market will lead to a(n):
A)increase in supply.
B)decrease in supply.
C)decrease in quantity supplied.
D)increase in quantity supplied.
E)decrease in equilibrium price.
Q3) The income effect of a decrease in the price of potatoes,an inferior good,is a(n):
A)increase in the demand for onions.
B)decrease in the quantity demanded of potatoes.
C)increase in the demand for potatoes.
D)increase in the quantity demanded of potatoes.
E)decrease in the demand for onions.
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6
Chapter 5: Introduction to Macroeconomics
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Sample Questions
Q1) According to Keynes,the adoption of an expansionary fiscal policy will cause:
A)both equilibrium price level and equilibrium output to rise.
B)equilibrium price level to rise and equilibrium output to fall.
C)equilibrium price level to fall and equilibrium output to rise.
D)both equilibrium price level and equilibrium output to fall.
E)equilibrium price level to remain the same and equilibrium output to fall.
Q2) Which of the following is most likely to happen if the aggregate demand curve for an economy (which was initially in equilibrium)shifts to the left?
A)The equilibrium real GDP will decrease.
B)The equilibrium price level in the economy will increase.
C)The aggregate supply curve will shift rightward.
D)The aggregate supply curve will shift leftward.
E)The economy will experience an expansion.
Q3) Stagflation is a situation with high unemployment rates,high inflation rates,and little or no growth in the economy.
A)True
B)False
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Chapter 6: Tracking the Useconomy
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Sample Questions
Q1) Which of the following would be excluded from the gross domestic product (GDP)?
A)The mayor of a city hiring more workers to improve the sanitation of the city
B)The sale of mobiles decreasing significantly
C)The government reducing welfare benefits
D)A homemaker spending $20 taking the family out to lunch instead of cooking food
E)A consumer having his pickup truck tuned up at the local garage
Q2) If a toy store overestimates the demand for a toy in 2004 and,as a result,has an unexpectedly large number of toys in stock at the end of the year,the value of the inventory of these toys will be considered as:
A)investment in 2004.
B)investment in 2005.
C)consumption in 2004.
D)consumption in 2005.
E)a part of GDP when the toys are sold.
Q3) The consumer price index (CPI)tends to understate the true rate of inflation.
A)True
B)False
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Chapter 7: Unemployment and Inflation
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Sample Questions
Q1) Inflation is defined as a sustained increase in an economy's price level.
A)True
B)False
Q2) "Discouraged workers" comprise the percentage of those in the:
A)labor force who are employed and are seeking employment.
B)labor force who have chosen early retirement because they dislike their work.
C)adult population who want to be employed but have given up the search for a job.
D)labor force who are looking for a job but cannot find one.
E)adult population who are in the labor force.
Q3) The inflation experienced in the United States during the late 1960s as a result of the spending on the Vietnam War is an example of:
A)hyperinflation.
B)demand-pull inflation.
C)disinflation.
D)cost-push inflation.
E)cyclical inflation.
Q4) A sustained decrease in an economy's price level is known as deflation.
A)True
B)False
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Chapter 8: Productivity and Growth
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Sample Questions
Q1) Workers displaced due to technological change usually find it difficult to get new jobs.
A)True
B)False
Q2) An increase in the production of capital goods and a reduction in the production of consumer goods would most likely lead to a faster rate of future economic growth.
A)True
B)False
Q3) Which of the following was the average yearly increase in U.S.labor productivity growth between the 1870s and the early years of the 21st century?
A)About 1 percent
B)About 2 percent
C)About 5 percent
D)About 10 percent
E)Between 0 and 1 percent
Q4) Basic research has less immediate payoff to society.
A)True
B)False
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Page 10
Chapter 9: Aggregate Demand
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Sample Questions
Q1) Which of the following will shift the consumption function upward?
A)A decrease in stock prices
B)An increase in stock prices
C)A higher price level
D)A lower disposable income
E)A higher disposable income
Q2) As disposable income increases,_____.
A)consumption and saving both increase
B)consumption increases and saving decreases
C)consumption and saving both decrease
D)consumption decreases but saving increases
E)saving increases,but we cannot predict what happens to consumption
Q3) The smaller the marginal propensity to save,other things constant,_____.
A)the smaller the marginal propensity to consume
B)the smaller the multiplier
C)the flatter the consumption function
D)the steeper the consumption function
E)the steeper the saving function
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11
Chapter 10: Aggregate Supply
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Sample Questions
Q1) If global pollution causes climatic changes that permanently harm crop production worldwide,aggregate supply and demand analysis would lead us to expect:
A)an increase in the price level.
B)a decrease in the price level.
C)rightward shifts of the aggregate demand and aggregate supply curves.
D)a leftward shift of the aggregate demand curve.
E)an increase in the potential level of real GDP.
Q2) Which of the following is true?
A)The nominal wage will be constant only if the inflation rate is constant.
B)The real wage will be greater than the nominal wage only if the inflation rate is constant.
C)The nominal wage and the real wage will change by the same amount if the price level is constant.
D)The real wage will be equal to one only if the price level is zero.
E)The real wage will be constant only if the nominal wage is constant.
Q3) At the potential level of output,there is no seasonal unemployment.
A)True
B)False
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Chapter 11: Fiscal Policy
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Sample Questions
Q1) Lags in the approval and implementation of fiscal policy:
A)weaken fiscal policy as a tool of economic stabilization.
B)increase the effectiveness of fiscal policy as a tool of economic stabilization.
C)help legislators better assess what policies are most appropriate to adopt.
D)make fiscal policy more responsive to the current economic environment.
E)cause fiscal policy to be more effective at changing the level of real GDP than changing the price level only in the long run.
Q2) Which of the following is true about classical economists?
A)They argued that the sources of depressions and high unemployment lay within the market system.
B)They advocated laissez-faire policies to promote economic growth.
C)They believed the economy would naturally tend toward unemployment.
D)They believed prices and wages were rigid.
E)They encouraged government intervention in markets.
Q3) Discretionary fiscal policy works by shifting the short-run aggregate supply curve.
A)True
B)False
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Chapter 12: Federal Budgets and Public Policy
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Sample Questions
Q1) A _____ is a congressional agreement about total outlays,spending by major category,and expected revenues,which guides spending and revenue decisions by the many congressional committees and subcommittees.
A)continuing resolution
B)budget resolution
C)disclaimer vote
D)filibuster
E)stimulus plan
Q2) A budget philosophy using fiscal policy to achieve the economy's potential GDP,rather than balancing budgets either annually or over the business cycle,is termed:
A)budget finance.
B)functional finance.
C)crowding out.
D)crowding in.
E)deficit finance.
Q3) With few exceptions,the U.S.federal government has historically run a balanced budget.
A)True
B)False
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Page 14
Chapter 13: Money and the Financial System
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Sample Questions
Q1) Barter is the exchange of goods and services without the use of money.
A)True
B)False
Q2) Federal Reserve notes are _____.
A)checks
B)commodity money
C)coins
D)backed by gold
E)fiat money
Q3) The law that established the Federal Reserve System is the _____.
A)Federal Reserve Act of 1913
B)National Banking Act of 1863
C)Banking Act of 1933
D)National Banking Act of 1813
E)Federal Reserve Act of 1963
Q4) The chair of the Board of Governors of the Fed is appointed by the president.
A)True
B)False
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Page 15
Chapter 14: Banking and the Money Supply
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Sample Questions
Q1) Suppose the required reserve ratio is 0.1 and Linda deposits $4,000 in cash at the College State Bank.If the bank held no excess reserves before Linda's deposit and now increases its reserves by $500,which of the following is true?
A)The bank must have lent out an additional $4,000.
B)$500 is the value of the bank's required reserves.
C)The bank now has excess reserves of $100.
D)Both the bank's assets and its liabilities rise by $500.
E)The bank now has $500 in excess reserves.
Q2) When the Fed buys U.S.government securities from a bank,that bank's excess reserves and total reserves increase,but there is no change in required reserves.
A)True
B)False
Q3) If a bank borrows $1,000 from the Fed and lends it out,the bank sets in motion a process that will result in an expansion of the money supply by a multiple of that $1,000.
A)True
B)False
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Page 16
Chapter 15: Monetary Theory and Policy
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Sample Questions
Q1) At a given point in time,if the demand for money increases:
A)the interest rate will fall.
B)there will be a movement downward along the money demand curve.
C)there will be a movement upward along the money demand curve.
D)there will be a rightward shift of the money demand curve.
E)there will be a leftward shift of the money demand curve.
Q2) The equilibrium interest rate in a money market is determined by:
A)the rate of inflation.
B)aggregate demand and aggregate supply.
C)money demand and money supply.
D)the Congress.
E)the Fed.
Q3) The quantity theory of money assumes that money supply and price level are the only variables in the equation of exchange that are free to fluctuate.
A)True
B)False
Q4) An expansionary monetary policy is always capable of boosting aggregate investment.
A)True
B)False
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Chapter 16: Macro Policy Debate: Active or Passive
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Sample Questions
Q1) An effective policy of governmental intervention in the economy requires all of the following except one.Which is the exception?
A)The will to reject sound policy if it gets in the way of political considerations
B)The ability to estimate the economy's potential level of output
C)The ability to predict what would happen without intervention
D)An assortment of effective tools of discretionary policy
E)The ability to achieve effective cooperation between fiscal and monetary policy makers
Q2) If self-correction causes prices to fall less than nominal wages,both output and real wages will decrease.
A)True
B)False
Q3) Adaptive expectations is a school of thought that argues people form expectations based on all available information,including the likely future actions of government policy makers.
A)True
B)False
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Chapter 17: International Trade
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Sample Questions
Q1) Suppose the government of an importing country is considering imposing either a tariff that would result in imports falling to 1 million units per year or an import quota of 1 million units per year.Which of the following would be true?
A)The domestic price of the imported good will rise higher with the tariff than with the quota.
B)Consumers in the importing country will be worse off with the quota than with the tariff.
C)Domestic producers that compete with the imports will be better off with the tariff than with the quota.
D)The tariff will increase the revenue of the government of the importing country,while the quota will increase the profits of the foreign exporting firms with quota rights.
E)Tariffs raise the price of a good but quotas do not.
Q2) The United States is a major exporter of _____.
A)diamonds
B)bananas
C)coffee
D)corn
E)gold
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19
Chapter 18: International Finance
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Sample Questions
Q1) If the dollar per pound exchange rate falls from $1.50 per pound to $1.25 per pound,______.
A)U.S.imports of British goods will increase
B)U.S.exports of goods to Great Britain will increase
C)U.S.exports of services to Great Britain will fall because the price of the pound has increased
D)British demand for American goods will remain unchanged,but American demand for British goods will fall
E)U.S.demand for British goods will remain unchanged,but British demand for American goods will increase
Q2) An exchange rate is:
A)the rate at which goods are traded between countries.
B)the rate at which the central bank of a country gives loans to commercial banks.
C)the rate at which commercial banks give loans to individuals.
D)the price of one currency in terms of another.
E)the price at which one good trades for another.
Q3) The Bretton Woods system fixed all exchange rates in terms of the U.S.dollar.
A)True
B)False
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Page 20
Chapter 19: Economic Development
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Sample Questions
Q1) Developing countries consist of:
A)only low-income countries.
B)only middle-income countries.
C)both low-income and middle-income countries.
D)all industrial countries.
E)both industrial and middle-income countries.
Q2) One of the drawbacks of implementing an import-substitution policy is that:
A)it makes other countries impose trade restrictions as a retaliatory measure.
B)it makes the economy vulnerable to global economic fluctuations.
C)it leads to brain drain,by which educated and knowledgeable resources are lost.
D)it increases the dependence on foreign capital goods for economic growth.
E)it increases the budget deficit of the domestic country.
Q3) Foreign aid which goes through international bodies such as the World Bank is known as _____.
A)unilateral transfer
B)multilateral assistance
C)bilateral assistance
D)remittance
E)government assistance
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Page 21