The American Economy: A Comprehensive Guide for Second Graders

Question 1

When there are fewer apples at the store than people want, what will most likely happen to the price of the apples?

Accepted Answer

The price will go up.

Answer

The price will go down.

Answer

The price will stay the same.

Question 2

When lots of people want something, what happens to its price?

Accepted Answer

It goes up.

Answer

It goes down.

Answer

It stays the same.

Answer

It disappears.

Question 3

When there are more people looking for jobs than there are jobs, what is it called?

Accepted Answer

Unemployment.

Answer

Inflation.

Answer

Scarcity.

Answer

Economic growth.

Question 4

What kind of economy do we have in the United States, where businesses are owned by people for profit?

Accepted Answer

Capitalism.

Answer

Socialism.

Answer

Communism.

Answer

Democracy.

Question 5

What do we call the paper money we use in the United States?

Accepted Answer

Dollars.

Answer

Pounds.

Answer

Euros.

Answer

Yen.

Question 6

If you put money in the bank, what are you doing?

Accepted Answer

Saving it.

Answer

Spending it.

Answer

Hiding it.

Answer

Giving it away.

Question 7

When there are plenty of apples at the store, but not many people want to buy them, what will most likely happen to the price of the apples?

Accepted Answer

The price will decrease.

Answer

The price will increase.

Answer

The price will remain the same.

Answer

The apples will be given away for free.

Question 8

What is it called when the prices of lots of things go up over time?

Accepted Answer

Inflation

Answer

Deflation

Answer

Stagnation

Answer

Recession

Question 9

Is it good to have high inflation?

Accepted Answer

No

Answer

Yes

Question 10

What is the difference between a need and a want?

Accepted Answer

A need is something you can't live without, while a want is something you would like to have.

Answer

A need is something you need today, while a want is something you can wait to buy.

Answer

A need is something that is expensive, while a want is something that is inexpensive.

Answer

There is no difference between a need and a want.

Question 11

When supply is higher than demand, what happens to prices?

Accepted Answer

Prices usually go down.

Answer

Prices usually go up.

Answer

Prices stay the same.

Answer

Supply increases.

Question 12

When many people are out of work, what is a name for this economic condition?

Accepted Answer

Unemployment

Answer

Inflation

Answer

Deflation

Answer

Recession

Question 13

Which choice below is a tool used to help control inflation?

Accepted Answer

Raising interest rates

Answer

Lowering taxes

Answer

Increasing government spending

Answer

Printing more money

Question 14

What is the name of the money we use in our country?

Accepted Answer

Dollar

Answer

Euro

Answer

Yen

Answer

Pound

Question 15

Which of these is an example of a service?

Accepted Answer

Cutting hair

Answer

Farming tomatoes

Answer

Building a house

Answer

Mining for coal

Question 16

What is the difference between a need and a want?

Accepted Answer

Needs are things we must have, while wants are not.

Answer

Wants are things we must have, while needs are not.

Answer

Needs are always cheaper than wants.

Answer

Wants are always cheaper than needs.

Question 17

What is the special bank called that works with the U.S. government?

Accepted Answer

The Federal Reserve

Answer

The Bank of America

Answer

Chase Bank

Answer

Wells Fargo

Question 18

When there are more toys in a store than people want, what will happen to the price of the toys?

Accepted Answer

The price will go down.

Answer

The price will go up.

Answer

The store will order more toys.

Answer

People will buy more toys.

Question 19

When there are more people who want to buy a product than there are people who want to sell it, what will happen to the price of the product?

Accepted Answer

The price will increase.

Answer

The price will decrease.

Answer

The price will remain the same.

Answer

The price will increase only if the product is in high demand.

Question 20

When people want to buy more of something but there isn't enough of it, what happens?

Accepted Answer

The price goes up

Answer

The price goes down

Answer

The price stays the same

Answer

The product disappears

Question 21

Which of these is NOT a way to save money?

Accepted Answer

Borrowing money from a friend

Answer

Putting money in a piggy bank

Answer

Spending less than you earn

Answer

Getting a part-time job

Question 22

When there are more people looking for jobs than there are jobs available, what do we call it?

Accepted Answer

Unemployment

Answer

Inflation

Answer

Economic growth

Answer

Recession

Question 23

What is the name of the special bank that helps control the American economy?

Accepted Answer

The Federal Reserve

Answer

The Treasury

Answer

The White House

Answer

The Supreme Court

Question 24

When the government prints too much money, what can happen?

Accepted Answer

Inflation

Answer

Unemployment

Answer

Recession

Answer

Economic growth

Question 25

What is the difference between a tax and a fee?

Accepted Answer

Taxes are used to pay for public services, while fees are used to pay for specific services.

Answer

Fees are used to pay for public services, while taxes are used to pay for specific services.

Answer

There is no difference between a tax and a fee.

Answer

Taxes are paid to the government, while fees are paid to businesses.

Question 26

Which of these is a renewable resource?

Accepted Answer

Water

Answer

Oil

Answer

Coal

Answer

Natural gas

Question 27

When there are more people who want to buy a product than there is of the product available, what do we call that?

Accepted Answer

Shortage

Answer

Demand

Answer

Supply

Answer

Inflation

Question 28

When the cost of goods and services keeps going up over time, what is that called?

Accepted Answer

Inflation

Answer

Unemployment

Answer

Deflation

Answer

Recession

Question 29

If many people are looking for jobs but there aren't enough jobs available, what is that called?

Accepted Answer

Unemployment

Answer

Inflation

Answer

Growth

Answer

Stability

Question 30

The Federal Reserve does NOT do which of the following?

Accepted Answer

Makes laws

Answer

Sets interest rates

Answer

Prints money

Answer

Controls inflation

Question 31

What is the name of the money we use in the United States?

Accepted Answer

Dollar

Answer

Euro

Answer

Pound

Answer

Yen

Question 32

Which job is related to the economy?

Accepted Answer

Economist

Answer

Doctor

Answer

Teacher

Answer

Lawyer

Question 33

You're at the store and there aren't enough apples for everyone. What will happen to the price of the apples?

Accepted Answer

The price will go up.

Answer

The price will go down.

Answer

The price will stay the same.

Question 34

When there is too much of something, what economic principle explains why its price decreases?

Accepted Answer

Supply and demand

Answer

Inflation

Answer

Unemployment

Question 35

Which example best demonstrates inflation?

Accepted Answer

The price of milk gradually rising

Answer

Fewer jobs becoming available

Answer

People spending more money on entertainment

Question 36

What happens when there are more people looking for jobs than jobs available?

Accepted Answer

Unemployment

Answer

Inflation

Answer

Supply and demand

Question 37

Which of these is a basic necessity?

Accepted Answer

Food

Answer

A new video game

Answer

A pet

Question 38

What do we call the system we use to make and share goods and services?

Accepted Answer

Economy

Answer

Government

Answer

Society

Question 39

What's the difference between a need and a want?

Accepted Answer

Needs are essential for survival, while wants are things we'd like to have.

Answer

Wants are essential for survival, while needs are things we'd like to have.

Answer

Needs and wants are the same thing.

Question 40

How do government rules help the economy?

Accepted Answer

They keep the economy fair and strong.

Answer

They give businesses more freedom.

Answer

They make it harder for businesses to succeed.

Question 41

Which of these best describes the difference between a recession and a depression?

Accepted Answer

A recession is a shorter and less severe downturn than a depression.

Answer

A recession is caused by a natural disaster, while a depression is caused by human factors.

Answer

A recession is only measured by changes in the stock market, while a depression is measured by changes in the unemployment rate.

Question 42

When the demand for a product increases and the supply stays the same, what happens to the price?

Accepted Answer

It rises

Answer

It remains the same

Answer

It falls

Question 43

What occurs when there aren't enough jobs for all the people looking for work?

Accepted Answer

Unemployment

Answer

Economic growth

Answer

Inflation

Answer

Deflation

Question 44

What is the main job of the Federal Reserve?

Accepted Answer

To manage the amount of money in the economy

Answer

To set interest rates

Answer

To control inflation

Answer

To print money

Question 45

What is one advantage of a market economy?

Accepted Answer

It encourages businesses to compete and create new and better products or services

Answer

It makes sure everyone has a job

Answer

It prevents inflation

Answer

It eliminates poverty

Question 46

What is the role of people who spend money on goods or services in a market economy?

Accepted Answer

They create demand for businesses to make and sell products or services

Answer

They produce the goods or services

Answer

They determine the prices of goods or services

Question 47

What is a factor that can contribute to the economy getting better?

Accepted Answer

More money being put into new businesses or ideas

Answer

People buying fewer goods or services

Answer

Higher taxes

Answer

The government spending less money

Question 48

What is the difference between something you need and something you want?

Accepted Answer

Something you need is vital for your well-being, while something you want is not essential

Answer

Something you need is easily available, while something you want is hard to find

Answer

Something you need is costly, while something you want is affordable

Question 49

If you see a toy you want, but it costs too much money, what might you do?

Accepted Answer

Wait until it costs less money.

Answer

Buy it anyway, even though it's too expensive.

Answer

Ask your friend to buy it for you.

Question 50

When things cost more than they used to, what do we call that?

Accepted Answer

Inflation

Answer

Recession

Answer

Deflation

Question 51

What happens when people are unable to find jobs?

Accepted Answer

Unemployment

Answer

Overemployment

Answer

Recession

Answer

Inflation

Question 52

What is something that people desire, but isn't essential for survival, like food or shelter?

Accepted Answer

A toy

Answer

Clean water

Answer

A place to sleep

Answer

A warm coat

Question 53

If many people want to buy the same toy, but there aren't enough toys for everyone, what could happen to the price?

Accepted Answer

The price might increase.

Answer

The store might give the toys away for free.

Answer

The price might stay the same.

Answer

The price might decrease.

Question 54

How do most people in the United States earn money?

Accepted Answer

By working at a job.

Answer

By playing video games.

Answer

By sleeping in.

Answer

By watching TV.

Question 55

What is a sign of a healthy economy in the United States?

Accepted Answer

People having jobs and making money.

Answer

Stores closing down.

Answer

People not having to work.

Question 56

Imagine you want to purchase a book, but don't have enough money. What's a good option?

Accepted Answer

Save your money until you have enough to buy it.

Answer

Ask your friend to buy it for you.

Answer

Ask the store owner to give you the book for free.

Answer

Take the book without paying for it.

Question 57

What can happen when prices increase too much?

Accepted Answer

It can be difficult for people to afford necessities.

Answer

It can make everyone wealthier.

Answer

It can make everyone happier.

Question 58

If you want a specific toy, but the store has run out, what might you need to do?

Accepted Answer

Wait until more toys are available.

Answer

The store will lower the price of the toy.

Answer

The store will make more toys immediately.

Answer

The store will give you a free toy.