Free and new FSOT test Sample Questions for 2013-14
This is 4rth part of blog on Free FSOT test Sample Questions for 201314. In this part you will see questions related to Economics. These questions can be practice for other Economics related Practice Exams too.
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Free FSOT test Sample Questions- FSOT Economics Practice Questions 42-51
FSOT Economics Practice Questions
Q 42
Which best defines laissez-faire capitalism?
A. Business activity and natural resource usage and distribution are not regulated by the government
B. Government controlled distribution of natural resources with little involvement in other sectors of the economy
C. Ownership of the means of productions is split between public and private entities
D. Existence of extensive legislation governing internal trade
A statement from Exxon-Mobile that their third quarter profits were down 15% from last year is an example of:
A. Normative economics
B. Positive economics
C. Macroeconomics
D. Differentiated economics
Which of the following defines the opportunity cost of production?
A. Using a resource in one capacity in production eliminates the ability to use it in another
B. Loss of potential profit in order to capture a larger market share
C. Streamlining production costs to maximize profit
D. Increasing overhead costs in order to expand production
Q 45
Which best describes the economy of the United Kingdom of Great Britain?
A. Traditional economy
B. Command economy
C. Market economy
D. Mixed economy
Q 46
Economist and philosopher Adam Smith's expression, “the invisible hand” refers to a theory or belief that:
A. the greed of capitalists seeking wealth actually helps the poor in society
B. the world economy is governed by a series of natural laws
C. outside forces beyond human control influence the economy
D. governments should not impose economic regulation
Q 47
Which best describes the calculation of GNP or Gross National Product?
A. The total value of goods and services produced domestically, plus income earned by citizens outside the country, less foreigner's income from domestic production
B. The total value of goods and services produced domestically by all workers
C. The total value of goods and services produced domestically less production costs except wages paid
D. The total value of goods and services produced domestically, less income from foreign workers producing domestically, less the total value of goods consumed domestically
Q 48
In the United States changes in the money supply are controlled by:
A. the U.S. Treasury Department
B. the Federal Reserve Bank
C. the House Committee on Financial Services
D. the Bureau of Engraving and Printing
Q 49
If you purchase a 10 year, $15000.00 bond with an annual coupon rate of 6%, what is your total return at maturity?
A. $900.00
B. $9000.00
C. $15900.00
D. $24000.00
Q 50
In graphing supply and demand, at what point is market equilibrium achieved?
A. When supply is slightly above demand
B. When supply is slightly below demand
C. When supply and demand intersect
D. When demand is significantly above supply
Q 51
In the United States which industry could best be defined as an oligopoly?
A. Shoe manufacturing
B. Automobile manufacturing
C. Publishing
D. Home construction
Answer Key - FSOT Economics Practice Questions 42-51
42. A. Laissez-faire comes from French “to let be”, and generally implies no government interference in a capitalist or free market system.
43. B. Positive economics or descriptive economics examines data that can be verified or proven.
44. A. Opportunity cost might be considered the second best choice for using a resource. By using it in its primary way, this second best opportunity is lost.
45. D. A mixed economy as in the UK combines features of centralized control of resources and industries with elements of a market economy in which private business and consumer demand influence the economy.
46. A. Political economist and Enlightenment philosopher Adam Smith used this expression several times in his writings including his well known, The Wealth of Nations in 1776 to refer to the unintended societal benefit of wealth seeking industrialists.
47. A. GNP is a leading economic indicator for the health of a nation and focuses on national production, including production abroad in companies owned by citizens, but not including domestic production contributed by foreigners.
48. B. The “Fed” has the unique position of function both as a private and public entity. It is not funded by Congress, but is regulated and given specific responsibilities by Congress including regulating other banks, providing financial services to the government, and regulating money supply.
49. B. The annual coupon rate determines interest on the original bond amount. It is paid every year during the life of the bond, to maturity. The total return includes only money made on the bond, not the original purchase price.
50. C. Market equilibrium is defined as market demand equaling market supply.
51. B. Oligopoly is defined as an industry with only a few competitors in which the actions of one impact the others such as with production, pricing, features, etc.
