Georgia GACE Economics (6-12) Assessment Practice Test
The Georgia GACE Economics (6-12) Assessment practice page covers economic reasoning about households, businesses, governments, and international trade. Practice questions sample inflation, GDP per person, opportunity cost, economic profit, investment value, public goods, unemployment benefits, and comparative advantage. These topics call for interpreting economic measures and applying core concepts to short scenarios.
Exam overview
About the Georgia GACE Economics (6-12) Assessment Exam
Economics teaching requires distinguishing how prices and incentives shape choices from how public policy and broader economic conditions affect outcomes. Questions in this practice bank involve calculating inflation from a consumer price index, finding real GDP per person, and comparing exports with imports. Other scenarios ask you to account for implicit as well as explicit costs, estimate present value using an interest rate, and identify human capital as a source of growth. Public goods and unemployment benefits connect economic concepts with government action, while comparative advantage frames the gains from specialization and trade. Working through these examples can help sharpen numerical reasoning, identify the relevant concept in a scenario, and explain how a change—such as a price increase or lost job—affects economic choices.
Sample Practice Questions
Review a selection from this exam's published US Practice Tests practice bank.
A government provides unemployment benefits to eligible people who lose their jobs. What is one standard economic function of such benefits?
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Correct answer: BUnemployment benefits provide temporary income support. By helping households maintain some spending after job loss, they can also cushion declines in overall demand during economic downturns.
A country's exports are worth $90 billion and its imports are worth $110 billion during a given period. What is its balance of trade in goods and services, using exports minus imports?
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Correct answer: BBalance of trade under the stated convention equals exports minus imports: $90 billion − $110 billion = −$20 billion. The negative result is a trade deficit of $20 billion.
A business's total revenue is $500,000 and its explicit costs are $420,000. The owner also gave up a job paying $60,000 to run the business. What is the business's economic profit?
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Correct answer: CEconomic profit subtracts both explicit costs and the opportunity cost of the owner's forgone salary: $500,000 − $420,000 − $60,000 = $20,000.
A firm expects a proposed investment to generate $10,000 in one year. If the relevant annual interest rate is 5 percent, approximately what is the present value of that future amount?
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Correct answer: APresent value discounts a future amount by the interest rate: $10,000 ÷ 1.05 is approximately $9,524. A dollar received in the future is worth less than a dollar today when the interest rate is positive.
A country produces more goods and services over time because its workforce gains skills through education and training. Which source of economic growth is most directly involved?
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Correct answer: AEducation and training develop workers' knowledge and skills, which are forms of human capital. Greater human capital can raise worker productivity and support long-run economic growth.
A government pays for a public park using tax revenue. Which characteristic of a public good most directly makes it difficult for a private seller to charge every beneficiary?
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Correct answer: CA public good is typically both nonrival, meaning one person's use does not substantially reduce another's, and nonexcludable, meaning it is difficult to prevent nonpayers from benefiting. These features can create a free-rider problem.
A country specializes in producing goods for which it has lower opportunity costs and trades with other countries. Which is a likely economic benefit of this arrangement?
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Correct answer: ASpecialization based on comparative advantage and trade can allow countries together to produce and consume more than they could without exchange. The gains do not guarantee equal incomes or eliminate adjustment costs.
How to use this practice test
Practice is free and draws up to 20 random questions from the 50-question bank for a session. After you submit, results appear so you can check your responses and identify concepts or calculations to revisit, such as economic profit, inflation, or trade balances.
Preparation tips
- For inflation questions, calculate the percentage change in the CPI: divide the change in the index by its starting value, then multiply by 100.
- Separate explicit costs from opportunity costs when calculating economic profit; include income the owner gave up to operate the business.
- Practice using GDP and population figures to calculate real GDP per person, and label units carefully when working with large values.
- Compare exports and imports using exports minus imports, and state whether the result is a trade surplus or deficit.
- For present-value problems, discount the future amount by the interest rate and time period; distinguish a future value from its value today.