Question 1

In the early 1980s, David Jimenez, a corporate finance manager, was faced with which of the following problems?

Accepted Answer

A)  High inflation rates 
B)  Competition from e-business firms 
C)  Too much productivity 
D)  Declining interest rates 
E)  A decline in the use of specialization 
A)  High inflation rates 
B)  Competition from e-business firms 
C)  Too much productivity 
D)  Declining interest rates 
E)  A decline in the use of specialization

Question 2

Why do we say that the U.S. economy is a mixed economy?

Accepted Answer

The United States economy is characteriz

Question 3

Which of the following is uncharacteristic of a socialist economy?

Accepted Answer

A)  All capital and capital goods are privately owned. 
B)  The government owns and controls key industries. 
C)  Land and raw materials may be the property of the state. 
D)  What to produce and how to produce it are based on national goals. 
E)  Distribution of goods and services is controlled by the state. 
A)  All capital and capital goods are privately owned. 
B)  The government owns and controls key industries. 
C)  Land and raw materials may be the property of the state. 
D)  What to produce and how to produce it are based on national goals. 
E)  Distribution of goods and services is controlled by the state.

Question 4

One of Samuel Slater's contributions to the development of American business was the use of

Accepted Answer

A)  capital. 
B)  flexible manufacturing. 
C)  domestic robots. 
D)  the factory system. 
E)  the domestic system. 
A)  capital. 
B)  flexible manufacturing. 
C)  domestic robots. 
D)  the factory system. 
E)  the domestic system.

Question 5

Karl Marx is known as the father of communism.

Accepted Answer

A) True 
 B)False

Question 6

Explain how the basic economic questions are answered in capitalistic and command economies.

Accepted Answer

In a capitalistic economy, the basic eco

Question 7

Command economies include capitalism, socialism, and communism.

Accepted Answer

A) True 
 B)False

Question 8

The Federal Reserve uses ____ when it lowers the interest rate charged to banks on short-term loans.

Accepted Answer

A)  monetary policy 
B)  national debt 
C)  inflation 
D)  fiscal policy 
E)  competition 
A)  monetary policy 
B)  national debt 
C)  inflation 
D)  fiscal policy 
E)  competition

Question 9

____ is the study of how wealth is created and distributed.

Accepted Answer

A)  Economics 
B)  Business 
C)  Marketing 
D)  Capitalism 
E)  Finance 
A)  Economics 
B)  Business 
C)  Marketing 
D)  Capitalism 
E)  Finance

Question 10

How the price of homes affects the number of homes built and sold would be an economic issue studied in a Macroeconomics course.

Accepted Answer

A) True 
 B)False

Question 11

Satellite Communications
Jonathan worked for Satellite Communications for twenty years. In the time that he worked there, he learned a lot about the company and how it operated. The company met its sales and revenue goals every year. However, most of the employees had similar educational and cultural backgrounds. He believed that the company could do much better if it cultivated an environment that promoted many different ideas. Additionally, Satellite Communications was mostly focused on how much revenue it earned in a given year. Jonathan felt that the most important goal should be to satisfy customers. He believed financial success would result from focusing on customers.
After a lot of consideration, Jonathan decided to open his own business called Universal Communications and hire employees that reflected a more diverse customer base. He was happy to have this opportunity because it was a dream that he had always had. He had always wanted to make his own decisions about what his company would produce and how. The only aspect of the business he was unsure of was pricing, yet he knew this would be important for his ultimate success.
-Refer to Satellite Communications. Jonathan is operating in a ____ because he has the opportunity to decide what and how to do things.

Accepted Answer

A)  command economy 
B)  mixed economy 
C)  free-enterprise system 
D)  split economy 
E)  cultural diversity 
A)  command economy 
B)  mixed economy 
C)  free-enterprise system 
D)  split economy 
E)  cultural diversity

Question 12

The terms real gross domestic product and gross domestic product can be used interchangeably.

Accepted Answer

A) True 
 B)False

Question 13

Basically, there are four recognized degrees of competition: perfect competition, monopolistic competition, oligopoly, and monopoly.

Accepted Answer

A) True 
 B)False

Question 14

The factors of production include natural resources, labor, government assistance, and entrepreneurship.

Accepted Answer

A) True 
 B)False

Question 15

In perfect competition, who sets the price of a product?

Accepted Answer

In a perfect competition market structur

Question 16

During the peak or prosperity stage of a nation's business cycle, businesses are reluctant to offer new products and services.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following represents the biggest customer of American business?

Accepted Answer

A)  Government 
B)  Other businesses 
C)  Foreign governments 
D)  Consumers 
E)  The military 
A)  Government 
B)  Other businesses 
C)  Foreign governments 
D)  Consumers 
E)  The military

Question 18

Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of

Accepted Answer

A)  serious inflation eroding the purchasing power of his investment. 
B)  being paid before the suppliers and employees are paid. 
C)  losing his home, car, and life savings. 
D)  losing the money he has invested in the corporation and not receiving profits. 
E)  the company giving all of the profits to local communities. 
A)  serious inflation eroding the purchasing power of his investment. 
B)  being paid before the suppliers and employees are paid. 
C)  losing his home, car, and life savings. 
D)  losing the money he has invested in the corporation and not receiving profits. 
E)  the company giving all of the profits to local communities.

Question 19

The consumer price index (CPI)

Accepted Answer

A)  is a quarterly index that producers receive for their finished goods. 
B)  measures increases or decreases in the level of worker performance. 
C)  is the price of metals, lumber, and raw materials. 
D)  measures prices paid during periods of deflations. 
E)  is a monthly index that tracks the prices paid by consumers. 
A)  is a quarterly index that producers receive for their finished goods. 
B)  measures increases or decreases in the level of worker performance. 
C)  is the price of metals, lumber, and raw materials. 
D)  measures prices paid during periods of deflations. 
E)  is a monthly index that tracks the prices paid by consumers.

Question 20

____ is a necessary and extremely important by-product of free enterprise.

Accepted Answer

A)  Monopoly 
B)  Socialism 
C)  Communism 
D)  Competition 
E)  Poverty 
A)  Monopoly 
B)  Socialism 
C)  Communism 
D)  Competition 
E)  Poverty

Exam 1: Exploring the World of Business and Economics

In the early 1980s, David Jimenez, a corporate finance manager, was faced with which of the following problems?

Why do we say that the U.S. economy is a mixed economy?

Which of the following is uncharacteristic of a socialist economy?

One of Samuel Slater's contributions to the development of American business was the use of

Karl Marx is known as the father of communism.

Explain how the basic economic questions are answered in capitalistic and command economies.

Command economies include capitalism, socialism, and communism.

The Federal Reserve uses ____ when it lowers the interest rate charged to banks on short-term loans.

____ is the study of how wealth is created and distributed.

How the price of homes affects the number of homes built and sold would be an economic issue studied in a Macroeconomics course.

The terms real gross domestic product and gross domestic product can be used interchangeably.

Basically, there are four recognized degrees of competition: perfect competition, monopolistic competition, oligopoly, and monopoly.

The factors of production include natural resources, labor, government assistance, and entrepreneurship.

In perfect competition, who sets the price of a product?

During the peak or prosperity stage of a nation's business cycle, businesses are reluctant to offer new products and services.

Which of the following represents the biggest customer of American business?

Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of

The consumer price index (CPI)

____ is a necessary and extremely important by-product of free enterprise.

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Small Business, Entrepreneurship, and Franchises

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

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