Practice Quiz

CLEP Economics Exam Prep - Question List

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6. Country X and Country Y have similar populations and natural resources. Which of the following best explains why Country X would have a higher rate of economic growth than Country Y?
  1. Country X invests more in education.
  2. Country X imports more consumer goods.
  3. Country X places higher taxes on businesses.
  4. Country X pays larger salaries to government officials.
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7. How do federal income taxes and transfer payments, such as unemployment compensation, affect the distribution of personal income in the United States after taxes and transfers?
  1. Federal income taxes make the distribution of income more equal, but transfers make it less equal.
  2. Federal income taxes make the distribution of income less equal, but transfers make it more equal.
  3. Both federal income taxes and transfers make the distribution of income less equal.
  4. Both federal income taxes and transfers make the distribution of income more equal.
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8. Which of the following actions is an example of an improvement in human capital?
  1. Carlos hires three workers for his business.
  2. Frank's Furniture trains employees to use computers.
  3. Tasha applies for a job as an engineer.
  4. The city of Upland builds a new nursing home.
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9. Which of the following best explains why domestic industries are often successful in convincing Congress to place tariffs on certain imported products?
  1. The revenue generated from the tariffs is less than the revenue from taxes on products produced by the industry.
  2. The revenue generated from the tariffs is greater than the benefits of the tariffs to the industry.
  3. The cost to any one consumer is small, and the benefits to the industry are large.
  4. The benefit to any one consumer is large, and the cost to the industry is small.
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10. An increase in the rate of inflation will result in a decrease in which of the following?
  1. Federal and state income taxes
  2. The purchasing power of money
  3. The level of prices
  4. Interest rates
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