1.Decreasing government spending usually
a. decreases the inflation rate.
b. increases the stagflation rate.
c. decreases the stagflation rate.
d. increases the inflation rate.
2.Inflation is low but the unemployment rate is the highest seen in several years. Economists report signs that the economy is beginning to improve. The economy is likely in
a.expansion.
b.a peak.
c.recession.
d.a trough.
3.Reading from left to right, which list shows the tax types that proportionally increase with a rise in income?
a.regressive, progressive, proportional
b.proportional, regressive, progressive
c.regressive, proportional, progressive
d.progressive, regressive, proportional
4.Which of the following is the least profitable investment for a cell phone company earning $10 per plan contract?
a.opening a new store location with $200 daily operating cost, generating 30 new plans per day
b.creating television commercial at $25 daily operating cost, generating 15 new plans per day
c.offering free $10 gift for every new plan, generating 40 new plans per day
d.redesigning web site at $50 daily operating cost, generating 10 new plans per day
5.One benefit of regulating a natural monopoly is that
a.competition between products improves quality.
b.consumers have many choices.
c.the government ensures the supplier works safely and efficiently.
d.consumers do not have to research different companies.

