Exam 1: The Foundations of Business

In calculating gross domestic product (GDP), the U.S. government does not include the following: (select one)

One useful indicator of the outlook for future jobs is the number of new _____.

A recession is generally followed by a _____ in which the economy starts growing again.

The equilibrium price is a point at which buyers' demand for a product and sellers' supply of it are in balance.

Good _____ management is particularly important when a company is first formed because new businesses usually need to borrow start-up money.

Because they operate in a(n) _____ industry, a fare decrease at American Airlines will likely result in decreases at other carriers.

The study of the economy as a whole is called _____.

A good way to accumulate profits is to supply something that can be sold for much more than it costs to produce.

Under _____ competition, many sellers sell differentiated products that serve similar purposes.

If, in any given year, the government takes in more money than it spends on goods and services, the result is a budget _____.

For assessing the strength of the housing market, _____ is often a good indicator.

In a _____ economy, the government controls selected major industries, such as transportation and health care, while allowing individual ownership of other industries.

A _____ is any activity that provides goods or services to consumers for the purpose of making a profit.

All of the following are best categorized as _____: the U.S. Postal Service, museums, and almost all colleges and universities.

Because Jenny Craig's bank provides payment services, loan and insurance products, investments, credit cards, and online banking, it is a _____ company.

New Age Pharmaceuticals Inc. produces two limited lines of drugs—one for common maladies and one for rarer conditions and diseases. The majority of its business comes from the tried-and-true drugs that most Americans have been using for many years, but the new growth area in the pharmaceutical industry is in high-priced new drugs. New Age management believes that the company’s research-and-development operations are sufficiently effective and efficient enough to develop six new prescription drugs that will start showing a profit within 12 months of their roll-outs. Currently more than 4 million people use New Age products. -New Age will be more willing to develop new products when prices are on the rise and less willing when they're coming down.

The planned market system was espoused by Adam Smith in his book The Wealth of Nations, published in 1776.

Reported monthly by the Bureau of Labor Statistics, the _____ is the most widely publicized measure of inflation.

Which of the following is not a characteristic of a business

Swarez Construction Corp. is a nationwide builder of small business buildings. To understand the nature of supply and demand for its products, management would conduct a _____ study.