Great Nebraskan National Economics Test
(1998 revision)

Do you have a good understanding of these basic economic principles and facts? Take this test and compare your score with the national score. The first time through, answer each question ONCE, then find your score. After scoring your results, return to those you missed to try again.

[This test uses Javascript to provide feedback on each answer. If you get no little window letting you know if the first answer is correct, your browser is not responding to javascript. As an alternative, please just keep track of your answers, then go to the answers page from the bottom of this test page.]

1. Which of these best describes the U.S. Federal Reserve?

Responsible for monetary policy/money supply
Prints money.
Keeps the country out of debt.
Helps people in need.

2. What is the basic purpose of profits in our market economy?

Pay for wages and salaries of workers.
Lead businesses to produce what consumers want.
Transfer income to the wealthy.
All of the above.

3. Who sets monetary policy in the United States?

Congress
President
U.S. Treasury
Federal Reserve

4. The prices of meat products in a competitive market are determined by:

Government.
Business monopolies.
Supply and demand.
The Consumer Price Index.

5. The purchasing power of people's incomes is most affected by:

The inflation rate.
The trade deficit.
The balance of payments.

6. Who makes fiscal policy in the United States?

President and Congress
Federal Reserve
U.S. Treasury
IRS

7. What is an example of fiscal policy?

Discount Rate Change
Prime Rate Change
Federal Income Tax Rate Change
All of the above.

8. Which one of the following is most likely to improve the wages
of American workers?

An increase in business inventories.
An increase in productivity.
An increase in interest rates.

9. What is the current national rate (percent) of civilian unemployment?

1% - 2%
4% - 6%
7% - 9%
More than 10%

10. Which one of the following is the most widely used measure
of inflation?

The Consumer Price Index.
The Index of Leading Economic Indicators.
The prime rate.
The Federal Funds rate.

11. What is the current annual rate of inflation?

1% or less
2% - 3%
6% - 7%
10% - 12%

12. What economic policy would most likely be used to combat a recession
when inflation is low?

An increase in taxes.
An increase in the money supply.
An increase in stock market prices.

13. Economic growth is measured by a positive change in which
of the following?
The money supply.
The Producer Price Index.
The Gross Domestic Product.
The balance of payments.

14. There is a deficit in the federal budget when:

Federal government spending is greater than federal tax revenues.
U.S. imports are greater than U.S. exports.
The total demand for money is greater than the total supply of money.

15. If the U.S. dollar increases in value, what will most likely be
the effect on U.S. exports of goods to other countries?

Exports would increase.
Exports would decrease.
Exports would stay the same.

Ten questions were asked. If you selected only one answer to each, you can find the number and percent correct here.

You got correct, and incorrect. The percentage correct of the questions answered is .

Now take a look at the correct answers and the national results.

Adapted from Walstad, William "The Effect of Economic Knowledge on Public Opinion of Economic Issues." Journal of Economic Education, Vol. 28, No.3, pp. 203-204.

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