Question 1

An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

Accepted Answer

A) True 
 B)False

Question 2

One of the greatest concerns associated with capitalism is that:

Accepted Answer

A)  It is not very successful at creating wealth. 
B)  Some businesspeople may let greed guide their behavior. 
C)  The amount of economic freedom enjoyed by consumers is very limited. 
D)  Producers are unlikely to supply the goods and services that consumers value the most. 
A)  It is not very successful at creating wealth. 
B)  Some businesspeople may let greed guide their behavior. 
C)  The amount of economic freedom enjoyed by consumers is very limited. 
D)  Producers are unlikely to supply the goods and services that consumers value the most.

Question 3

In one of his weekly broadcasts,the Federal Reserve Chairman remarked that inflation had begun to tick upward.However,unemployment in the U.S was still quite high and economic growth had slowed.With short-term interest rates close to 0 (zero),the Chair did not visualize that ____________ policy would be able to do anything for the high unemployment problem.He felt that _______ policy would be more useful for bolstering employment,but that would require local and state governments and the federal government to provide tax breaks for corporations?

Accepted Answer

A)  federal;state 
B)  fiscal;monetary 
C)  monetary;fiscal 
D)  fiscal;federal 
A)  federal;state 
B)  fiscal;monetary 
C)  monetary;fiscal 
D)  fiscal;federal

Question 4

Under the __________ system there is very little incentive to work hard or to produce quality goods or services.

Accepted Answer

A)  capitalist 
B)  socialist 
C)  communist 
D)  mixed economy 
A)  capitalist 
B)  socialist 
C)  communist 
D)  mixed economy

Question 5

Adam Smith believed that countries would prosper if businesspeople were free to start and run their own businesses.Businesspeople would make a profit by providing the goods,services and ideas that others in the economy wanted,and they would hire others to help increase those profits,leading to social and economics benefits for many.This idea was called the __________.

Accepted Answer

A)  kinked demand theory 
B)  invisible hand 
C)  spending multiplier 
D)  demand accelerator 
A)  kinked demand theory 
B)  invisible hand 
C)  spending multiplier 
D)  demand accelerator

Question 6

In the boxed material "Making Ethical Decisions," the textbook describes corruption practices in developing nations.These practices include payoffs to government officials in order to get an edge on competing better in one's industry.Which of the following statements best describes the ethical message explained in this box?

Accepted Answer

A)  Bribery is commonplace and necessary in socialistic nations. 
B)  Bribery is acceptable if everyone is doing it.As a business person,you have to find the right balance in whatever nation you want to sell your products. 
C)  Campaign contributions are not considered bribes,particularly if everyone in your industry is doing the same. 
D)  Ethics plays an important role in a capitalistic system and in the freedom to compete.Corruption can hinder economic growth. 
A)  Bribery is commonplace and necessary in socialistic nations. 
B)  Bribery is acceptable if everyone is doing it.As a business person,you have to find the right balance in whatever nation you want to sell your products. 
C)  Campaign contributions are not considered bribes,particularly if everyone in your industry is doing the same. 
D)  Ethics plays an important role in a capitalistic system and in the freedom to compete.Corruption can hinder economic growth.

Question 7

Under the basic principle of supply,as the price goes down,manufacturers and suppliers of a product tend to supply less of the product to the market.

Accepted Answer

A) True 
 B)False

Question 8

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Accepted Answer

A)  Total profit earned by producers. 
B)  Total amount of labor that will be employed in that market. 
C)  Amount of time it takes to bring together the buyers and sellers of the good. 
D)  Equilibrium price of the gooD. 
A)  Total profit earned by producers. 
B)  Total amount of labor that will be employed in that market. 
C)  Amount of time it takes to bring together the buyers and sellers of the good. 
D)  Equilibrium price of the gooD.

Question 9

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.

Accepted Answer

A) True 
 B)False

Question 10

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

Accepted Answer

A)  Monetary policy 
B)  Incomes policy 
C)  Fiscal policy 
D)  Cyclical policy 
A)  Monetary policy 
B)  Incomes policy 
C)  Fiscal policy 
D)  Cyclical policy

Question 11

The U.S.national debt equals the sum of all recorded years of deficits.

Accepted Answer

A) True 
 B)False

Question 12

The CPI measures the pace of inflation or deflation.

Accepted Answer

A) True 
 B)False

Question 13

Thomas Malthus believed that overpopulation was a major cause of poverty.

Accepted Answer

A) True 
 B)False

Question 14

If businesses are producing at capacity,and the nation is experiencing almost full employment (a very low rate of unemployment - less than 2%),the Fed may decide to:

Accepted Answer

A)  Lower interest rates. 
B)  Raise taxes. 
C)  Lower taxes. 
D)  Increase interest rates. 
A)  Lower interest rates. 
B)  Raise taxes. 
C)  Lower taxes. 
D)  Increase interest rates.

Question 15

Chase is a recent college graduate with a new job as an engineering trainee for a large defense company.Now that he is making good wages,he hopes to start saving for his first house and also contribute toward the company retirement plan.As he looks over his monthly bills,Chase is concerned about ever getting ahead of the game.His food bill,car payment,and mounting gasoline payments keep him in the "just making ends meet" category.As his mind wonders back to the good ol' college days,he reflects on a time when gas and food seemed a lot more reasonable.Chase is experiencing the effects of:

Accepted Answer

A)  Inflation 
B)  Conditions of low demand 
C)  Involuntary CPI 
D)  Cyclical unemployment 
A)  Inflation 
B)  Conditions of low demand 
C)  Involuntary CPI 
D)  Cyclical unemployment

Question 16

Mike spends a lot of time blogging.Yesterday,he left the following comment on a site where participants were discussing the pros and cons of healthcare: "If you think healthcare is expensive now,wait until it is free.The problem with free rides is,eventually everyone piles on the bus and no one is left to push it.Then the system collapses".He was responded to by Martha,who added,"Universal healthcare is not a dirty word.It's the salvation for many people.If I have to pay a little more in taxes and know that my neighbor's kids have good pre-school and can see the doctor when needed,it's worth it to me".Mike and Martha are discussing the benefits and drawbacks of:

Accepted Answer

A)  Healthcare under communism. 
B)  Healthcare under capitalism. 
C)  Healthcare under socialism. 
D)  Healthcare under nationalism. 
A)  Healthcare under communism. 
B)  Healthcare under capitalism. 
C)  Healthcare under socialism. 
D)  Healthcare under nationalism.

Question 17

A command economic system is characterized by:

Accepted Answer

A)  Reliance on the forces of supply and demand to determine what is produced. 
B)  Reliance on the government to determine what is produced and who gets the output. 
C)  An extremely rapid rate of economic growth. 
D)  Freedom of choice and freedom of competition. 
A)  Reliance on the forces of supply and demand to determine what is produced. 
B)  Reliance on the government to determine what is produced and who gets the output. 
C)  An extremely rapid rate of economic growth. 
D)  Freedom of choice and freedom of competition.

Question 18

In the long run,the market price tends to adjust toward the equilibrium point.

Accepted Answer

A) True 
 B)False

Question 19

In a free market economic system,the lack of government control and regulation means that businesses find it easy to take advantage of customers by offering poor quality products at high prices.

Accepted Answer

A) True 
 B)False

Question 20

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.

An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

One of the greatest concerns associated with capitalism is that:

Under the __________ system there is very little incentive to work hard or to produce quality goods or services.

Under the basic principle of supply,as the price goes down,manufacturers and suppliers of a product tend to supply less of the product to the market.

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

The U.S.national debt equals the sum of all recorded years of deficits.

The CPI measures the pace of inflation or deflation.

Thomas Malthus believed that overpopulation was a major cause of poverty.

If businesses are producing at capacity,and the nation is experiencing almost full employment (a very low rate of unemployment - less than 2%),the Fed may decide to:

A command economic system is characterized by:

In the long run,the market price tends to adjust toward the equilibrium point.

In a free market economic system,the lack of government control and regulation means that businesses find it easy to take advantage of customers by offering poor quality products at high prices.

Economics was known as the "Dismal Science" because:

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

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

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Exam 2: Understanding How Economics Affects Business

An increase in productivity means that a worker is now able to produce more goods and services in the same amount of time.

One of the greatest concerns associated with capitalism is that:

Under the __________ system there is very little incentive to work hard or to produce quality goods or services.

Under the basic principle of supply,as the price goes down,manufacturers and suppliers of a product tend to supply less of the product to the market.

When the supply curve and demand curve for a particular good are shown together on a single graph,the point at which the two curves intersect identifies the:

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

The U.S.national debt equals the sum of all recorded years of deficits.

The CPI measures the pace of inflation or deflation.

Thomas Malthus believed that overpopulation was a major cause of poverty.

If businesses are producing at capacity,and the nation is experiencing almost full employment (a very low rate of unemployment - less than 2%),the Fed may decide to:

A command economic system is characterized by:

In the long run,the market price tends to adjust toward the equilibrium point.

In a free market economic system,the lack of government control and regulation means that businesses find it easy to take advantage of customers by offering poor quality products at high prices.

Economics was known as the "Dismal Science" because:

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

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

Filters