Question 1

In socialist economies, the government owns some, if not most basic businesses such as telecommunications systems and utilities.

Accepted Answer

A) True 
 B)False

Question 2

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Accepted Answer

A)  Oligopoly 
B)  Monopolistic competition 
C)  Perfect competition 
D)  Microeconomic competition 
A)  Oligopoly 
B)  Monopolistic competition 
C)  Perfect competition 
D)  Microeconomic competition

Question 3

Adam Smith believed that since businesspeople are motivated to improve their own prosperity, their actions are unlikely to benefit society as a whole.

Accepted Answer

A) True 
 B)False

Question 4

When the government attempts to stabilize the economy by changing taxes or government expenditures, it is using fiscal policy.

Accepted Answer

A) True 
 B)False

Question 5

John complained to his buddy, Frank, that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the __________ to learn how government economists currently view the price situation.

Accepted Answer

A)  GDP 
B)  CPI 
C)  PPI 
D)  MEW 
A)  GDP 
B)  CPI 
C)  PPI 
D)  MEW

Question 6

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Accepted Answer

A) True 
 B)False

Question 7

When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a:

Accepted Answer

A)  Federal Reserve allowance. 
B)  GDP deflator. 
C)  balance of payments deficit. 
D)  national deficit. 
A)  Federal Reserve allowance. 
B)  GDP deflator. 
C)  balance of payments deficit. 
D)  national deficit.

Question 8

In an effort to promote rapid growth, the government of Goldinia has kept taxes low, done little to regulate business activities, and implemented only modest social programs. The government is now facing political pressure to do more to clean up the environment and to reduce the inequalities of income and wealth. Which of the following statements is most accurate? Goldinia's government is currently taking:

Accepted Answer

A)  a purely capitalist approach to achieve its economic goals, and is likely to continue doing so in the future. 
B)  a purely socialist approach to achieve its economics goals, and is likely to continue doing so in the future. 
C)  a predominately socialist approach to achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future. 
D)  a predominately capitalist approach toward achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future. 
A)  a purely capitalist approach to achieve its economic goals, and is likely to continue doing so in the future. 
B)  a purely socialist approach to achieve its economics goals, and is likely to continue doing so in the future. 
C)  a predominately socialist approach to achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future. 
D)  a predominately capitalist approach toward achieving economic goals, but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future.

Question 9

In order to restrict spending by businesses and households, the Fed would take measures designed to lower interest rates.

Accepted Answer

A) True 
 B)False

Question 10

Robin just graduated from college and is seeking her first job. She received a degree in engineering at a prestigious university. Robin has several leads and has heard that the market for engineers is very strong, so she is convinced that she should locate a good job in the near future. Robin's current situation is an example of structural unemployment.

Accepted Answer

A) True 
 B)False

Question 11

High tax rates that put money into the government's coffers tend to slow spending, and ultimately slow the economy.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?

Accepted Answer

A)  The Fed is an agency of the U.S. Treasury Department that has the responsibility of collecting tax receipts for the IRS. 
B)  The Fed manages the U.S. money supply and interest rates. 
C)  The Fed is the primary government agency involved in carrying out our nation's fiscal policies. 
D)  The Fed is the agency of the government that ensures the U.S. maintains enough gold reserves to pay any foreign debts that result from international trade. 
A)  The Fed is an agency of the U.S. Treasury Department that has the responsibility of collecting tax receipts for the IRS. 
B)  The Fed manages the U.S. money supply and interest rates. 
C)  The Fed is the primary government agency involved in carrying out our nation's fiscal policies. 
D)  The Fed is the agency of the government that ensures the U.S. maintains enough gold reserves to pay any foreign debts that result from international trade.

Question 13

Both socialism and communism are variations of:

Accepted Answer

A)  command economies. 
B)  competitive economies. 
C)  free-market economies. 
D)  plutocratic systems. 
A)  command economies. 
B)  competitive economies. 
C)  free-market economies. 
D)  plutocratic systems.

Question 14

Deflation means prices are declining.

Accepted Answer

A) True 
 B)False

Question 15

Like most nations, the United States has a mixed economy.

Accepted Answer

A) True 
 B)False

Question 16

As productivity increases, the cost of producing goods and services is likely to fall.

Accepted Answer

A) True 
 B)False

Question 17

Adam Smith believed the self-interest of businesspeople would lead them to create needed goods, services, and jobs.

Accepted Answer

A) True 
 B)False

Question 18

Neo-Malthusians believe that the solution to poverty is:

Accepted Answer

A)  increasing the world population. 
B)  increasing taxes on the rich and increasing social programs. 
C)  birth control. 
D)  educating poor people. 
A)  increasing the world population. 
B)  increasing taxes on the rich and increasing social programs. 
C)  birth control. 
D)  educating poor people.

Question 19

The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the:

Accepted Answer

A)  supply of that product or service. 
B)  demand for that product or service. 
C)  elasticity of that product or service. 
D)  utility of that product or service. 
A)  supply of that product or service. 
B)  demand for that product or service. 
C)  elasticity of that product or service. 
D)  utility of that product or service.

Question 20

When prices are free to adjust over time, in the long run, the market price of a good tends to:

Accepted Answer

A)  rise above the equilibrium price in the long run. 
B)  equal the equilibrium price. 
C)  fall below the equilibrium price in the long run. 
D)  have no specific relationship to the equilibrium price. 
A)  rise above the equilibrium price in the long run. 
B)  equal the equilibrium price. 
C)  fall below the equilibrium price in the long run. 
D)  have no specific relationship to the equilibrium price.

Exam 2: Understanding Economics and How It Affects Business

In socialist economies, the government owns some, if not most basic businesses such as telecommunications systems and utilities.

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

Adam Smith believed that since businesspeople are motivated to improve their own prosperity, their actions are unlikely to benefit society as a whole.

When the government attempts to stabilize the economy by changing taxes or government expenditures, it is using fiscal policy.

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a:

In order to restrict spending by businesses and households, the Fed would take measures designed to lower interest rates.

High tax rates that put money into the government's coffers tend to slow spending, and ultimately slow the economy.

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?

Both socialism and communism are variations of:

Deflation means prices are declining.

Like most nations, the United States has a mixed economy.

As productivity increases, the cost of producing goods and services is likely to fall.

Adam Smith believed the self-interest of businesspeople would lead them to create needed goods, services, and jobs.

Neo-Malthusians believe that the solution to poverty is:

The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the:

When prices are free to adjust over time, in the long run, the market price of a good tends to:

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 Union and 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

Managing the Marketing Mix: Product, Price, Place and Promotion

Extension: Working Within the Legal Environment

Extension: Using Technology to Manage Information

Extension: Managing Risk

Extension: Managing Personal Finances

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