Question 1

The point of intersection between the supply and demand curves is called the stress point.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 2

One of the most significant problems faced by communist nations is:

Accepted Answer

A) Inequality in the distribution of wealth and income. 
B) Severe inflationary pressures due to rapid economic growth. 
C) Too little government regulation of economic activity. 
D) Persistent shortages of basic goods such as food and clothing. 
A) Inequality in the distribution of wealth and income. 
B) Severe inflationary pressures due to rapid economic growth. 
C) Too little government regulation of economic activity. 
D) Persistent shortages of basic goods such as food and clothing.

Question 3

__________ exists when the entire supply of a good is controlled by a single seller.

Accepted Answer

A) Perfect competition 
B) Oligopoly 
C) Pure Capitalism 
D) A monopoly 
A) Perfect competition 
B) Oligopoly 
C) Pure Capitalism 
D) A monopoly

Question 4

Economics was known as the "Dismal Science" because:

Accepted Answer

A) Too many people would result in food shortages and shortages of other resources. 
B) It was a very complex area of study based on mathematics. 
C) The world population was growing slower than expected in the 1700s,leading economists to call it a dismal period of time. 
D) There were too many old people and not enough young people to care for them. 
A) Too many people would result in food shortages and shortages of other resources. 
B) It was a very complex area of study based on mathematics. 
C) The world population was growing slower than expected in the 1700s,leading economists to call it a dismal period of time. 
D) There were too many old people and not enough young people to care for them.

Question 5

Product differentiation is a key to success in monopolistic competition.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 6

The total value of final goods and services produced within a nation's borders in a given year is known as that nation's:

Accepted Answer

A) aggregate production quota 
B) aggregate domestic output 
C) index of aggregate economic output 
D) gross domestic product 
A) aggregate production quota 
B) aggregate domestic output 
C) index of aggregate economic output 
D) gross domestic product

Question 7

The U.S.economic system relies on

Accepted Answer

A) The private sector to measure its economic well being. 
B) Industries that produce capital equipment to determine how well things are going. 
C) Frictional unemployment statistics as the sole measure of economic health. 
D) Key economic indicators such as GDP,to measure economic progress. 
A) The private sector to measure its economic well being. 
B) Industries that produce capital equipment to determine how well things are going. 
C) Frictional unemployment statistics as the sole measure of economic health. 
D) Key economic indicators such as GDP,to measure economic progress.

Question 8

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.
Level of Learning 2: Understanding of concepts and principles

Accepted Answer

A) True 
 B)False

Question 9

Disinflation refers to a situation in which prices continue to rise,but not at the rate they were rising previously.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 10

Larry and Moe are having an argument.Larry believes that over the past year,the economy is experiencing rapid inflation,while Moe says that the economy actually experienced disinflation during this period.The easiest way for Larry and Moe to settle their argument is to look at GDP figures for the past year.
Level of Learning 3: Application of principles

Accepted Answer

A) True 
 B)False

Question 11

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 12

__________ unemployment results when the demand for labor varies during the year.

Accepted Answer

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

Question 13

The economic and political system in which the government owns almost all the major factors of production is called:

Accepted Answer

A) Communism. 
B) Capitalism. 
C) Ethnocentrism. 
D) Socialism. 
A) Communism. 
B) Capitalism. 
C) Ethnocentrism. 
D) Socialism.

Question 14

_____________ refers to a general rise in the price level of goods and services over time.

Accepted Answer

A) Acceleration 
B) Recession 
C) Inflation 
D) Escalation 
A) Acceleration 
B) Recession 
C) Inflation 
D) Escalation

Question 15

High tax rates that put money into the government's coffers tend to slow spending,and ultimately slow the economy.
Level of Learning 2: Understanding of concepts and principles

Accepted Answer

A) True 
 B)False

Question 16

When describing the state of the U.S.economy,reporters often refer to the nation's GDP,its unemployment rate,and the CPI.Explain what each of these terms means and why each measure is significant.

Accepted Answer

GDP is the acronym for gross domestic pr

Question 17

Which of the following people would tend to favor a socialist economy?

Accepted Answer

A) John wants to live in a country with low marginal tax rates. 
B) Robin wants to live in a country that encourages rapid economic growth. 
C) Liz wants to live in a country with limited government regulation. 
D) Fred prefers to live in a country that promotes social equality. 
A) John wants to live in a country with low marginal tax rates. 
B) Robin wants to live in a country that encourages rapid economic growth. 
C) Liz wants to live in a country with limited government regulation. 
D) Fred prefers to live in a country that promotes social equality.

Question 18

To be classified as unemployed,a person must be at least 16 years old and trying to find a job within the past four weeks.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Question 19

Explain the significance of "price" in a free-market economic system.

Accepted Answer

In a free-market economy,the mechanism o

Question 20

America's business success is largely due to an economic and social climate that allows businesses to operate freely.
Level of Learning 1: Knowledge of key terms

Accepted Answer

A) True 
 B)False

Exam 2: Understanding How Economics Affects Business

The point of intersection between the supply and demand curves is called the stress point. Level of Learning 1: Knowledge of key terms

One of the most significant problems faced by communist nations is:

__________ exists when the entire supply of a good is controlled by a single seller.

Economics was known as the "Dismal Science" because:

Product differentiation is a key to success in monopolistic competition. Level of Learning 1: Knowledge of key terms

The total value of final goods and services produced within a nation's borders in a given year is known as that nation's:

The U.S.economic system relies on

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. Level of Learning 2: Understanding of concepts and principles

Disinflation refers to a situation in which prices continue to rise,but not at the rate they were rising previously. Level of Learning 1: Knowledge of key terms

The greed of businesspeople represents one of the greatest dangers to the operation of a free market system. Level of Learning 1: Knowledge of key terms

__________ unemployment results when the demand for labor varies during the year.

The economic and political system in which the government owns almost all the major factors of production is called:

_____________ refers to a general rise in the price level of goods and services over time.

High tax rates that put money into the government's coffers tend to slow spending,and ultimately slow the economy. Level of Learning 2: Understanding of concepts and principles

When describing the state of the U.S.economy,reporters often refer to the nation's GDP,its unemployment rate,and the CPI.Explain what each of these terms means and why each measure is significant.

Which of the following people would tend to favor a socialist economy?

To be classified as unemployed,a person must be at least 16 years old and trying to find a job within the past four weeks. Level of Learning 1: Knowledge of key terms

Explain the significance of "price" in a free-market economic system.

America's business success is largely due to an economic and social climate that allows businesses to operate freely. Level of Learning 1: Knowledge of key terms

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

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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

Bonus A: Using Technology to Manage Information

Bonus B: Managing Risk

Bonus C: Managing Your Personal Finances

Appendix: Working Within the Legal Environment

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