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Foreign Service Officer Test Questions 86–90 (page: 19)

Updated On: 9-Feb-2026
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Which of the following government regulatory agencies was created in response to wide spread bank failures during the 1930's?

  1. SEC
  2. FDIC
  3. FTC
  4. Federal Reserve Board

Answer(s): B



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In a downward stock market in which stockholders may rush to sell shares,increasing the downward spiral, conditions are known as:

  1. a bear market
  2. dumping
  3. a trade deficit
  4. a margin call

Answer(s): A



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Companies such as Moody's and Standard & Poor's provide the service of:

  1. regulating public companies for the SEC
  2. determining credit ratings for public and private companies
  3. conducting stock transactions for traders
  4. calculating the DOW Jones average daily

Answer(s): B



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Demand pull inflation refers to a situation in which:

  1. Output greatly exceeds the aggregate demand
  2. Market supply and demand are very close to equilibrium
  3. Output can not keep up with aggregate demand
  4. Supply exceeds market demand

Answer(s): C



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If utility is the measure of satisfaction gained by consuming a good or service,then according to the principle of diminishing marginal utility:

  1. Five doughnuts makes you happier than four, but the fifth doughnut does not make you as happy as the first
  2. Five doughnuts makes you happier than four and the third doughnut makes you happier than the first
  3. Five doughnuts does not make you as happy as four because utility has been maximized
  4. Five doughnuts make you happier than one and each additional doughnut makes you happier than the last

Answer(s): A



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