Question

1.Which of the following is done by the American government to counteract economic contraction?

Select one:

a. It may reduce interest rates.

b. It decreases its own spending for goods and services.

c. It raises the reserve rate of banks.

d. It decreases the money supply.

e. It sells securities through the Federal Reserve Board.

2.Contractions of the economy lead to

Select one:

a. inflation.

b. recession.

c. rising levels of employment.

d. an increase in production.

e. an increase in income.

3.Which of the following markets is most likely to be a monopoly?

Select one:

a. agricultural commodities

b. lifestyle gadgets

c. airlines

d. utility companies

e. automobile manufacturers

4.Kevin owns a local farm stand. Although he sells fruit and vegetables, like the grocery store chains in the area, he has some power over the price he charges because he can offer consumers features they want. For instance, his fruit and vegetables are organic and locally grown. This is an example of

Select one:

a. monopolistic competition.

b. pure competition.

c. oligopoly.

d. monopoly.

e. competition.