Practice Quiz

FSOT: 500 Test Prep Study Questions - Question List

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111. Which country has the strongest GDP per capita:

W= GDP of $152 billion and a total population of 54,553,000
X = GDP of $400 billion and a total population of 21,900,000
Y= GDP of $595 billion and a total population of 38,500,000
Z = GDP of $ 628 billion and a total population of 43,655,000
  1. Country W
  2. Country X
  3. Country Z
  4. Country X and Y are equal
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112. When the Fed enacts an expansionary monetary policy in order to increase output,a goal is to increase the monetary supply which is usually accomplished through all of the following Fed actions except:
  1. printing additional currency
  2. lowering interest rates
  3. reducing bank reserve requirements
  4. purchasing government bonds
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113. The difference between a nominal interest rate and a real interest rate is that:
  1. the nominal interest rate is for a fixed period of time
  2. the real interest rate is legally binding
  3. the nominal interest rate includes additional costs financed in a loan
  4. the real interest rate factors in inflation
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114. If a firm desires to improve productivity and expand economic growth over time,the best action to take is:
  1. increase capital expenditure
  2. acquire new technology
  3. avoid any new debt
  4. A and B are equally important
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115. Supply and demand are two important factors that influence the market. Supply means the amount of a specific product or service available. Demand refers to the amount of that product or service consumers want to purchase. Both of these factors influence the price of goods. For example, if there is a large supply of a product which few people want to buy, the price of that product will go down. As the price goes down, demand usually increases. Eventually, a balance between the two factors is reached and the optimal price for that product or service is determined. At that point, the supply and demand have reached equilibrium.

Why does demand only "usually" go up when the price is lowered?
  1. Demand always increases on its own
  2. The supply is often decreased instead
  3. Price may not be the only factor causing low demand
  4. People want to pay more for products, not less
  5. The system is only based on speculation so nothing is certain
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