Question 1

Which of the following statements about capitalism is the most accurate?

Accepted Answer

A)  In capitalist economies, most resources are owned by the government. 
B)  A strength of capitalism is its ability to deal with environmental problems. 
C)  Capitalism is characterized by unequal distribution of wealth and income. 
D)  A drawback of capitalism is that people have little freedom to pursue their own goals. 
A)  In capitalist economies, most resources are owned by the government. 
B)  A strength of capitalism is its ability to deal with environmental problems. 
C)  Capitalism is characterized by unequal distribution of wealth and income. 
D)  A drawback of capitalism is that people have little freedom to pursue their own goals.

Question 2

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

Accepted Answer

A) True 
 B)False

Question 3

There is general agreement in the United States on the degree to which the government should be involved in the economy.

Accepted Answer

A) True 
 B)False

Question 4

A monopoly occurs when there is a single seller for a product or service.

Accepted Answer

A) True 
 B)False

Question 5

In capitalist countries, the government decides what to produce and how the goods and services will be produced.

Accepted Answer

A) True 
 B)False

Question 6

The chair of the Federal Reserve Bank spoke to the American public. The message she conveyed is that Fed economists are worried about inflation and believe the best course of action would be to slow the economy. Which of the following policies is the Fed most likely to pursue?

Accepted Answer

A)  Increase taxes 
B)  Decrease interest rates 
C)  Restrict the money supply and increase interest rates 
D)  Devalue the dollar on international currency exchanges 
A)  Increase taxes 
B)  Decrease interest rates 
C)  Restrict the money supply and increase interest rates 
D)  Devalue the dollar on international currency exchanges

Question 7

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship.

Accepted Answer

A) True 
 B)False

Question 8

A surplus currently exists for fidget spinners. In a free-market economic system, the government must step in and buy any spinners that consumers do not buy in order to eliminate the surplus and establish equilibrium.

Accepted Answer

A) True 
 B)False

Question 9

Monetary policy is directly under the control of the U.S. Department of the Treasury.

Accepted Answer

A) True 
 B)False

Question 10

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

Accepted Answer

A)  monopolistic competition. 
B)  perfect competition. 
C)  an oligopoly. 
D)  a monopoly. 
A)  monopolistic competition. 
B)  perfect competition. 
C)  an oligopoly. 
D)  a monopoly.

Question 11

Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses. Businesspeople would make a profit by providing the goods, services, and ideas that others in the economy wanted, and they would hire others to help increase those profits, leading to social and economics benefits for many. This idea was called the

Accepted Answer

A)  kinked demand theory. 
B)  invisible hand. 
C)  spending multiplier. 
D)  demand accelerator. 
A)  kinked demand theory. 
B)  invisible hand. 
C)  spending multiplier. 
D)  demand accelerator.

Question 12

If nearly 28% of Cashland's citizens under the age of 65 are without healthcare and an advocacy group convinces its current administration to vote for basic healthcare for everyone, which of the following is likely to occur?

Accepted Answer

A)  More rapid economic growth 
B)  Higher taxes than in past years 
C)  Increasing reliance on markets to determine economic outcomes 
D)  An increase in the number of insurance companies 
A)  More rapid economic growth 
B)  Higher taxes than in past years 
C)  Increasing reliance on markets to determine economic outcomes 
D)  An increase in the number of insurance companies

Question 13

Sean received an ad for bundled television, phone, and Internet service that cost substantially more than he is currently paying. At the same time, he received a notice from his utility company that summer rates would be increasing. His textbooks are costing twice as much as they did last year, and yesterday, gas cost 30 cents more per gallon than it did last week. He can't help but marvel at how prices are rising when so many people have lost their jobs and are cutting back on expenditures. He is certain that this situation is an example of stagflation.

Accepted Answer

A) True 
 B)False

Question 14

Countries that wish to avoid shortages and surpluses of goods should adopt a communist system.

Accepted Answer

A) True 
 B)False

Question 15

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

Accepted Answer

A) True 
 B)False

Question 16

________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

Accepted Answer

A)  Frictional 
B)  Structural 
C)  Cyclical 
D)  Seasonal 
A)  Frictional 
B)  Structural 
C)  Cyclical 
D)  Seasonal

Question 17

Cashland is a nation that supports a free-market economy with private ownership of businesses. But lately, the government of Cashland has developed policies designed to help the needy and lessen the level of income inequality. These programs are funded by relatively high taxes on businesses and workers. These arrangements suggest that the economy of Cashland is trending toward pure capitalism.

Accepted Answer

A) True 
 B)False

Question 18

Resource development is concerned with finding the best way to utilize the fixed amount of resources a society has available.

Accepted Answer

A) True 
 B)False

Question 19

Mariska left her home country to become a nanny for a family in a suburb of San Diego, California. One of the benefits of her new job is she can attend the community college near her family's home. However, when she arrived, she experienced the differences from a predominately socialist nation and a capitalist nation. Mariska noted that public transportation in California was limited and expensive, making it difficult to get to school. For a negligible fee, the government in her home country provided public transportation for everyone. Mariska's home country's economic system was more characteristic of socialism.

Accepted Answer

A) True 
 B)False

Question 20

A typical demand curve shows that

Accepted Answer

A)  as people earn higher wages, they buy more of a specific good. 
B)  as supply increases, the amount purchased decreases. 
C)  people tend to buy more of a good than they really want. 
D)  people tend to buy more of a good when its price decreases. 
A)  as people earn higher wages, they buy more of a specific good. 
B)  as supply increases, the amount purchased decreases. 
C)  people tend to buy more of a good than they really want. 
D)  people tend to buy more of a good when its price decreases.

Which of the following statements about capitalism is the most accurate?

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

There is general agreement in the United States on the degree to which the government should be involved in the economy.

A monopoly occurs when there is a single seller for a product or service.

In capitalist countries, the government decides what to produce and how the goods and services will be produced.

The chair of the Federal Reserve Bank spoke to the American public. The message she conveyed is that Fed economists are worried about inflation and believe the best course of action would be to slow the economy. Which of the following policies is the Fed most likely to pursue?

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship.

A surplus currently exists for fidget spinners. In a free-market economic system, the government must step in and buy any spinners that consumers do not buy in order to eliminate the surplus and establish equilibrium.

Monetary policy is directly under the control of the U.S. Department of the Treasury.

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

If nearly 28% of Cashland's citizens under the age of 65 are without healthcare and an advocacy group convinces its current administration to vote for basic healthcare for everyone, which of the following is likely to occur?

Countries that wish to avoid shortages and surpluses of goods should adopt a communist system.

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

Resource development is concerned with finding the best way to utilize the fixed amount of resources a society has available.

A typical demand curve shows that

Taking Risks and Making Profits Within the Dynamic Business Environment

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Working Within the Legal Environment

Using Technology to Manage Information

Managing Risk

Managing Personal Finances

Filters

Exam 2: Understanding Economics and How It Affects Business

Which of the following statements about capitalism is the most accurate?

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

There is general agreement in the United States on the degree to which the government should be involved in the economy.

A monopoly occurs when there is a single seller for a product or service.

In capitalist countries, the government decides what to produce and how the goods and services will be produced.

The chair of the Federal Reserve Bank spoke to the American public. The message she conveyed is that Fed economists are worried about inflation and believe the best course of action would be to slow the economy. Which of the following policies is the Fed most likely to pursue?

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship.

A surplus currently exists for fidget spinners. In a free-market economic system, the government must step in and buy any spinners that consumers do not buy in order to eliminate the surplus and establish equilibrium.

Monetary policy is directly under the control of the U.S. Department of the Treasury.

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

If nearly 28% of Cashland's citizens under the age of 65 are without healthcare and an advocacy group convinces its current administration to vote for basic healthcare for everyone, which of the following is likely to occur?

Countries that wish to avoid shortages and surpluses of goods should adopt a communist system.

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

Resource development is concerned with finding the best way to utilize the fixed amount of resources a society has available.

A typical demand curve shows that

Taking Risks and Making Profits Within the Dynamic Business Environment

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Working Within the Legal Environment

Using Technology to Manage Information

Managing Risk

Managing Personal Finances

Filters