In 2006, the National Assessment of Educational Progress (NAEP) conducted its periodic assessment of the quality of American high school students. What is unique about the 2006 “Nation’s Report Card” was that it was the first time that high school students were tested regarding the subject of economics. How did they do? Well, it depends on who you ask.
- The Wall Street Journal laments that”High Schoolers Aren’t Good at Economics.”
- On the other hand, the New York Times proclaims “12th Graders Show Better Grasp of Market Forces Than Expected on U.S. Economics Test.”
Since this is the first year the test has been conducted, no one is really sure how the students did. One can not compare the results to previous years’ totals.
What questions were the students asked? You can try out a few of the sample questions yourself.
- What happens to most of the money deposited in checking accounts at a commercial bank?
- It is used to pay the bank’s expenses.
- It is loaned to other bank customers.
- It is kept in the bank’s vault until depositors withdraw the funds
- It is paid to the owners of the bank as return on their investment.
- Suppose that the federal government initially has a balanced budget. Which of the following changes in government tax revenues and expenditures over time will definitely lead to an increase in the national debt?
- Tax increase, no change in Expenditures
- Tax increase, decrease Expenditures
- Tax decrease, increase Expenditures
- No change in Taxes, decrease Expenditures
- In the United States, which of the following forms of taxation currently represents the largest source of tax revenue for the federal government?
- Property Tax
- Sales Tax
- Corporate Income Tax
- Personal Income Tax
- Two countries are currently trading with each other. The countries agree to remove all trade restrictions on products traded between them. Which of the following is most likely to decrease?
- The variety of goods available
- The price of imported goods
- The quality of goods available
- The amount of imported goods
b, c, d, b.