Question 1

The producer price index tracks the average change in prices from the ________ perspective.

Accepted Answer

A)  government's 
B)  buyer's 
C)  seller's 
D)  economist's 
E)  marketer's 
A)  government's 
B)  buyer's 
C)  seller's 
D)  economist's 
E)  marketer's C

Question 2

________ occurs when there are many buyers and sellers of products that are virtually identical and any seller can easily enter and exit the market.

Accepted Answer

A)  Monopolistic competition 
B)  A monopoly 
C)  An oligopoly 
D)  A duopoly 
E)  Perfect competition 
A)  Monopolistic competition 
B)  A monopoly 
C)  An oligopoly 
D)  A duopoly 
E)  Perfect competition E

Question 3

Business managers do not need to be aware of the decisions of collective businesses outside their own industry.

Accepted Answer

A) True 
 B)False  False

Question 4

Which transaction best describes bartering?

Accepted Answer

A)  an exchange of goods for currency, in which the price of something is determined by establishing its value against an underlying commodity 
B)  a transfer of goods without an exchange of currency, in which the price of something is determined by the seller, and the buyer agrees to pay at a later time 
C)  an exchange of goods without an exchange of currency, in which the price of something is determined by the needs and resources of each person involved in the exchange 
D)  an exchange of goods for currency, in which the price of something is determined by what buyers are willing to pay 
E)  an exchange of currency without an exchange of goods, in which the price of something is determined by what sellers demand 
A)  an exchange of goods for currency, in which the price of something is determined by establishing its value against an underlying commodity 
B)  a transfer of goods without an exchange of currency, in which the price of something is determined by the seller, and the buyer agrees to pay at a later time 
C)  an exchange of goods without an exchange of currency, in which the price of something is determined by the needs and resources of each person involved in the exchange 
D)  an exchange of goods for currency, in which the price of something is determined by what buyers are willing to pay 
E)  an exchange of currency without an exchange of goods, in which the price of something is determined by what sellers demand

Question 5

What best determines the level of competition?

Accepted Answer

A)  the degree of population change 
B)  the number of substitutes for a certain good or service 
C)  the degree of change in income levels 
D)  the number of complementary products or service 
E)  the existence of complementary goods 
A)  the degree of population change 
B)  the number of substitutes for a certain good or service 
C)  the degree of change in income levels 
D)  the number of complementary products or service 
E)  the existence of complementary goods

Question 6

Why does the U.S.Bureau of Labor Statistics evaluate the CPI's "market basket"?

Accepted Answer

A)  to ensure that it reflects current trends in the production of goods and services 
B)  to ensure that it reflects current consumer spending habits 
C)  to ensure that it reflects current wholesale spending habits 
D)  to ensure that it reflects current consumer demand 
E)  to ensure that it reflects current wholesale resource costs 
A)  to ensure that it reflects current trends in the production of goods and services 
B)  to ensure that it reflects current consumer spending habits 
C)  to ensure that it reflects current wholesale spending habits 
D)  to ensure that it reflects current consumer demand 
E)  to ensure that it reflects current wholesale resource costs

Question 7

Which of the following industries is LEAST likely to form an oligopoly?

Accepted Answer

A)  airline 
B)  automobile 
C)  tobacco 
D)  consulting 
E)  pharmaceutical 
A)  airline 
B)  automobile 
C)  tobacco 
D)  consulting 
E)  pharmaceutical

Question 8

Economics is the study of how goods and services are exchanged between individuals,businesses,and governments.

Accepted Answer

A) True 
 B)False

Question 9

How does lowering the discount rate enable the Fed to stimulate the economy? How does raising the discount rate enable the Fed to control too robust an economy?

Accepted Answer

The Fed lowers the discount rate on loan

Question 10

Socialism is similar to communism in that ________.

Accepted Answer

A)  the government provides all of the social services 
B)  the governments fail under economic stress 
C)  the government distributes goods and services 
D)  the government experiences shortages of goods and services 
E)  the government does not intervene in industry 
A)  the government provides all of the social services 
B)  the governments fail under economic stress 
C)  the government distributes goods and services 
D)  the government experiences shortages of goods and services 
E)  the government does not intervene in industry

Question 11

What is an economic indicator?

Accepted Answer

A)  a business expert who understands the economy and can advise managers how best to handle their companies 
B)  a formula used by accountants to determine their company's net profit 
C)  an aspect of the economy that can be measured in order to determine a country's overall economic health 
D)  a way of identifying whether a given market is an oligopoly or monopolistic competition 
E)  an action taken by the government to influence swings in the business cycle 
A)  a business expert who understands the economy and can advise managers how best to handle their companies 
B)  a formula used by accountants to determine their company's net profit 
C)  an aspect of the economy that can be measured in order to determine a country's overall economic health 
D)  a way of identifying whether a given market is an oligopoly or monopolistic competition 
E)  an action taken by the government to influence swings in the business cycle

Question 12

A recession is a decline in the gross national product (GNP)over two or more consecutive quarters of the year.

Accepted Answer

A) True 
 B)False

Question 13

The price at which supply of an item or service equals the demand for that item is known as the market price.

Accepted Answer

A) True 
 B)False

Question 14

Mae bakes 100 cinnamon rolls each day to sell at her café,and each day she sells out before breakfast is over.Many of her customers ask for,but don't get one.Her customers ask that she bake more cinnamon rolls each day.This is an example of a shortage.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is NOT true of a market economy?

Accepted Answer

A)  The pricing of goods is determined by what sellers wish to charge and buyers wish to pay. 
B)  The system encourages private ownership of resources. 
C)  The individual makes his or her own economic decisions. 
D)  The government may supply some goods or services 
E)  The economy is defined by a freedom of choice for both buyers and sellers. 
A)  The pricing of goods is determined by what sellers wish to charge and buyers wish to pay. 
B)  The system encourages private ownership of resources. 
C)  The individual makes his or her own economic decisions. 
D)  The government may supply some goods or services 
E)  The economy is defined by a freedom of choice for both buyers and sellers.

Question 16

Decreasing taxes can stimulate the economy by ________.

Accepted Answer

A)  allowing consumers more money to spend 
B)  decreasing the amount of money the government is able to spend 
C)  directly influencing the consumer price index 
D)  controlling the money supply 
E)  helping to contain an economy that is growing too quickly 
A)  allowing consumers more money to spend 
B)  decreasing the amount of money the government is able to spend 
C)  directly influencing the consumer price index 
D)  controlling the money supply 
E)  helping to contain an economy that is growing too quickly

Question 17

________ is a decrease in the rate of inflation.

Accepted Answer

A)  Deflation 
B)  Inflation 
C)  Disinflation 
D)  Deflection 
E)  Depression 
A)  Deflation 
B)  Inflation 
C)  Disinflation 
D)  Deflection 
E)  Depression

Question 18

Higher productivity results in higher costs and higher prices,resulting in lower income and lower profitability.

Accepted Answer

A) True 
 B)False

Question 19

________ unemployment measures permanent unemployment associated with massive industry-wide changes that lead to complete elimination of the positions formerly held.

Accepted Answer

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

Question 20

Changes in the price of resources do not help determine supply because those resources can be replaced by substitute goods.

Accepted Answer

A) True 
 B)False

Exam 2: Economics and Banking

The producer price index tracks the average change in prices from the ________ perspective.

________ occurs when there are many buyers and sellers of products that are virtually identical and any seller can easily enter and exit the market.

Business managers do not need to be aware of the decisions of collective businesses outside their own industry.

Which transaction best describes bartering?

What best determines the level of competition?

Why does the U.S.Bureau of Labor Statistics evaluate the CPI's "market basket"?

Which of the following industries is LEAST likely to form an oligopoly?

Economics is the study of how goods and services are exchanged between individuals,businesses,and governments.

How does lowering the discount rate enable the Fed to stimulate the economy? How does raising the discount rate enable the Fed to control too robust an economy?

Socialism is similar to communism in that ________.

What is an economic indicator?

A recession is a decline in the gross national product (GNP)over two or more consecutive quarters of the year.

The price at which supply of an item or service equals the demand for that item is known as the market price.

Mae bakes 100 cinnamon rolls each day to sell at her café,and each day she sells out before breakfast is over.Many of her customers ask for,but don't get one.Her customers ask that she bake more cinnamon rolls each day.This is an example of a shortage.

Which of the following statements is NOT true of a market economy?

Decreasing taxes can stimulate the economy by ________.

________ is a decrease in the rate of inflation.

Higher productivity results in higher costs and higher prices,resulting in lower income and lower profitability.

________ unemployment measures permanent unemployment associated with massive industry-wide changes that lead to complete elimination of the positions formerly held.

Changes in the price of resources do not help determine supply because those resources can be replaced by substitute goods.

Business Basics

Ethics in Business

Business in a Global Economy

Small Business and the Entrepreneur

Forms of Business Ownership

Business Management and Organization

Motivation, Leadership, and Teamwork

Human Resource Management

Online Business and Technology

Production, operations, and the Supply Chain

Marketing and Consumer Behavior

Product Development and Pricing Strategies

Promotion and Distribution

Financing and Tracking Business Operations

Investment Opportunities in the Securities Market

Business Law

Constructing an Effective Business Plan

Business Communications

Finding a Job

Personal Finance

Filters