Unit 8 - Part I Quiz Practice
Questions: US Economy and
Government
Name__________
KEY
_ Block______________
Your Unit 8 Test is multiple-choice questions and one essay. The MC questions focus on:
 Vocabulary - Pg. 151-152
 US Economy – Pg. 156
 Circular Flow – Pg. 158
 Types of Business Ownership – Pg. 160
THIS PACKET IS YOUR PASS TO SEE YOUR CIVICS TEACHER TO
CHECK YOUR ANSWERS TO THIS PACKET
Economic Vocabulary Practice: Use pages 143-144 in your notebook for help!
Match the vocabulary word in the bank below to the correct definition.
Answers can be used MORE THAN ONCE!
Answer
Definition
Money made by working
INCOME
MONEY SUPPLY
The amount of money in the
economy
Paper money
CURRENCY
INTEREST
INTEREST
FINANCIAL CAPITAL
INFLATION
MONEY
RECESSION
INCOME TAX
Rate charged by banks for using
their money (loans)
Rate paid to you for depositing
money into banks (banks use
your money to make loans)
Money borrowed from banks in
the form of loans
Too much money in the
economy
Items accepted as a form of
payment (coins, currency,
checks, debit cards)
Not enough money in the
economy
Money collected by the
government from the amount
you make at work
Picture Clue
US ECONOMY: Use page 148 in your notebook for help!
1. The United States has a _________________ (mixed, free market, command, traditional) economy which
is more __________________________(mixed, free market, command, traditional).
2. Circle from the list below principles that are true for the United States economy.
Mostly Public Property
Mostly Private Property
Centrally-Planned
Competition
Supply and Demand sets MOST prices
Consumer Sovereignty
Government sets SOME prices
Government sets ALL prices
For each of the following statements, label the statement true or false:
3.
4.
5.
6.
7.
___T___In the US, there is limited interference in the private sector from the government.
___F___ In the US, most economic decisions about what is produced are made in the public sector.
___T___ The US has a private sector.
___T___ The US has a public sector.
___T___ In the US, the government gets involved in the economy when the benefits to Americans
outweigh the costs.
Business Ownership Extra Practice: Use page 152 in your notebook for help!
8. All of the following are true of ALL entrepreneurs, EXCEPT:
a. Starts a business
b. Searches for profit
c. Takes risk
d. Have proprietorships
1. What are the three types of businesses you can start?
a. _PROPRIETORSHIPS_______________
b. _PARTNERSHIPS____________________
c. _CORPORATIONS_______________________
2. A proprietorship means there are (ONE, a few, many) owner(s) of business.
3. A partnership means there are (one, A FEW, many) owner(s) of business.
4. A corporation means there are (one, a few, MANY) owner(s) of business.
Profit
5. Pros are (GOOD or bad) and Cons are (good or BAD).
6. All of the following are true of starting a proprietorship EXCEPT:
a. You get to keep all the profit
b. You can use your own ideas
c. You share the risk and debt
d. You get to keep all the money
7. Which of the following is NOT TRUE of being a part owner of a corporation?
a. You are taking risk that is limited to the amount you invested.
b. You share decision-making and profit with many, many owners.
c. You are a stockholder or shareholder.
d. You are in the type of business ownership with the most risk.
8. Which of the following is NOT TRUE of partnerships?
a. You can have 2 owners
b. You can have 3 owners
c. You can have 5 owners
d. You take all the risk
Remember, owning a business involves risk! The amount of risk depends on the type of business and number of
owners!
9.Least Risk
10. Which of the following types of business has the MOST risk involved?
Most Risk
a. Proprietorship
b. Partnership
c. Corporation
11. Which of the following types of business has the LEAST risk involved?
a. Proprietorship
b. Partnership
c. Corporation
12. All of the following are TRUE of a corporation EXCEPT:
a. Your liability is limited to the amount of your total investment
b. Authorized by law to act as a legal entity regardless of the number of owners
c.
Owners are called stockholders and own shares of the company
d. Often the riskiest to own but you get to keep all the profit
13. Emily invested $500 in Apple. Apple has gone bankrupt! What is the most money Emily can lose from her
investment?
a. $200
b. $500
c. $1000
d. $1500
Circular Flow: Use page 150 in your notebook for help!
Directions: Use the word bank to label the different pieces inside the balloon.
Word Bank for Questions 13-15
Private Financial Institutions
Businesses
Individuals
Sell Resources
14._PFI’S________
15.BUSINESSES
__________
13.INDIVIDUALS
Sell Products
16. Everything inside the balloon is part of the (PRIVATE or public) sector.
Circular Flow: Use page 150 in your notebook for help!
Directions: Use the word bank to label the different pieces inside the balloon.
Products
Word Bank for Questions 17-19
Businesses
Resources
Individuals
17. Selling:
a. Individuals sell _RESROUCES_ to businesses.
b. Businesses sell _PRODUCTS_ to individuals.
18.Buying:
a. Individuals buy _PRODUCTS__ from businesses.
b. Businesses buy _RESOURCES__ from individuals.
19. Individuals sell _____________________ and Businesses sell ________________________.
a. Resources; Products
b. Products; Resources
20. When individuals and businesses are exchanging resources, goods and services, they are also
exchanging money.
a. When individuals sell resources to businesses they earn (profit or INCOME).
b. When businesses sell products to individuals they earn (PROFIT or income).
21. Which of the following is TRUE of economic circular flow between individuals, businesses, and the
government?
a. Money, goods, and resources flow in the economy.
b. Businesses sell resources to Individuals.
c. Individuals sell products to Businesses.
d. Private Financial Institutions tax individuals and businesses.
22. All of the following are examples of Private Financial Institutions EXCEPT:
a. Banks
b. Credit Unions
c. Government
d. Savings and Loans
23. Private Financial Institutions loan money to individuals and businesses. The loan is __________________.
a. Stocks and Bonds
b. Interest Rate
c. Financial Capital
d. Mortgage Rate
24. A business would borrow financial capital from PFI’s to do all of the following EXCEPT:
a. To expand their business
b. Buy more resources from individuals
c. Buy goods from other businesses
d. To tax the profit of businesses