Deck 2: The Canadian Economic Environment

Question 1

In recent years,productivity in the manufacturing sector of the Canadian economy has been:

A) rising.
B) relatively stable.
C) falling slowly.
D) falling very rapidly.

Answer 1

A

Question 2

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

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

Answer 2

A

Question 3

Approximately 53% of the FDI flowing into Canada comes from the USA,however almost what percent of the INCREASES in FDI come from non-U.S.sources?

A) 20%
B) 100%
C) 80%
D) 10%
E) 50%

Answer 3

B

Question 4

The Law of Supply and Demand,refers to the ability of the market,independent of external influences,to determine the:

A) amount of product or service that will be bought or sold
B) price for which a product or service will be bought and sold
C) amount of product or service that will be produced
D) speed at which a product or service will be bought or sold
E) relative stability of demand for a product or service

Question 5

Which of the following is NOT one of the contributing factors impacting Canada's economic development

A) National and provincial debt levels are within acceptable limits
B) Required business and economic management systems are in place
C) Political system is unstable
D) Economy contains the essential factors of production
E) Sufficient levels of investment

Question 6

A core fundamental of an open,economic environment,the Law of Supply and Demand,refers to the ability of the market,independent of external influences,to determine the:

A) amount of product or service that will be bought or sold
B) price for which a product or service will be bought and sold
C) amount of product or service that will be produced
D) speed at which a product or service will be bought or sold
E) relative stability of demand for a product or service

Question 7

The Canadian economic system can be described as a:

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

Question 8

Elastic demand results when movement in price:

A) results in significant changes in supply
B) does not result in significant changes in supply
C) results in significant changes in demand
D) does not result in significant changes in demand
E) results in equal movement in demand

Question 9

Economic contraction occurs when

A) Spending increases
B) Spending declines
C) Jobs increase
D) Inflation decreases

Question 10

Economic expansion occurs when

A) fewer goods and services are produced than consumers demand.
B) an economy is growing and people are spending more money.
C) a nation's standard of living drops quickly.
D) employment levels decline over time.
E) prices begin to rise and incomes begin to fall.

Question 11

Suppliers need to think about the cost of production versus the revenue which will be received from selling their product,and the change in profit which will be realized at different points on the schedule.This is called the:

A) Demand Curve
B) Supply Line
C) Law of supply
D) Law of demand
E) Demand Schedule

Question 12

The ability of a country to produce or supply goods or services at a lower cost than other countries or to possess resources or unique services that are unavailable elsewhere is a:

A) national competitive advantage
B) comparative advantage
C) competitive advantage
D) national advantage
E) absolute advantage

Question 13

Canada has a strong natural resource base results in our having a ___________ when it comes to the commodities and energy market sectors.

A) national competitive advantage
B) comparative improvement
C) competitive advantage
D) national advantage
E) comparative advantage

Question 14

A controlled system is characterized by:

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 15

Approximately what percentage of the FDI flowing into Canada comes from the USA?

A) 45%
B) 53%
C) 80%
D) 50%
E) 100%

Question 16

Today,the economic systems of most nations could most accurately be classified as:

A) pure capitalism.
B) pure socialism.
C) command economies.
D) mixed economies.

Question 17

The following contributing factor has NOT helped Canada be seen as a safe and lucrative place to do business:

A) Possess a strong, fair, and equitable legal system
B) Existence of corruption
C) Possession of a strong natural resource base
D) National and provincial debt levels are within acceptable limits
E) Banking system is considered one of the most efficient and techno-savvy in the world

Question 18

A typical supply curve shows that an increase in the price of a good will cause the quantity supplied to:

A) decrease.
B) increase.
C) remain constant.
D) fluctuate randomly around its equilibrium value.

Question 19

Inelastic demand results when movement in price:

A) results in significant changes in supply
B) does not result in significant changes in supply
C) results in significant changes in demand
D) does not result in significant changes in demand
E) results in equal movement in demand

Question 20

In pure economic terms,this refers to the point where the quantity supplied equals the quantity demanded,with the price point set.

A) market freedom
B) elastic demand
C) market point
D) Equilibrium
E) supply point

Question 21

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

A) total profit earned by producers.
B) total amount of labour 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 22

Which of the following terms describes the set of values,beliefs,rules,language,and institutions held by a specific group of people?

A) Culture
B) Ethnocentricity
C) Institutional society
D) Social myopia

Question 23

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

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

Question 24

Which of the following represents the value of one nation's currency relative to the currencies of another country?

A) Euro rate
B) Currency rate
C) Exchange rate
D) Standard of living

Question 25

Of the following,which factor is NOT included in the total value of GDP:

A) goods and services which are produced and purchased domestically for consumption
B) government spending business
C) investments within the economy
D) business investments in other countries
E) goods produced for export purposes

Question 26

Hennessy Hardware,a Canadian retailer,buys much of its inventory from Asian countries.Hennessy Hardware would benefit if the value of the dollar ________ relative to the currencies of the countries from which Hennessy imports.

A) rose
B) fell
C) remained constant
D) floated unpredictably

Question 27

Increased unemployment can reduce consumer demand for goods and services,leading to:

A) Economic contraction
B) Inflation
C) Deflation
D) A budget deficit

Question 28

A typical supply curve shows a relationship between the:

A) amount of labour a firm hires and the amount of output it can produce.
B) amount of time required to produce a good and the relevant production costs.
C) price of a good and the quantity sellers would be willing to offer for sale.
D) amount of a good a firm produces and the total profit it earns.

Question 29

Economic expansion occurs when

A) fewer goods and services are produced than consumers demand.
B) an economy is growing and people are spending more money.
C) a nation's standard of living drops quickly.
D) employment levels decline over time.
E) prices begin to rise and incomes begin to fall.

Question 30

_____________ curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period.

A) demand
B) supply
C) utility
D) Laffer

Question 31

Economic contraction occurs when

A) Spending increases
B) Spending declines
C) Jobs increase
D) Inflation decreases

Question 32

Economies move and grow as a result of activities of everyone in the following areas:

A) Expenditures
B) Savings
C) Investments
D) Credit
E) all of the above

Question 33

Key economic drivers vary from country to country,for Canada,what is NOT considered to be a key driver:

A) production of goods and services for purpose of exporting
B) energy-producing sector
C) technology sector
D) natural resource sector
E) consumer spending

Question 34

A continuing rise in prices over a period of time refers to

A) inflation.
B) economic expansion.
C) a recession.
D) economic contraction.
E) stagflation.

Question 35

If a shortage exists for a good in a free-market economy,the:

A) price of the good will rise.
B) price of the good will fall.
C) government will order suppliers to increase the production of that good.
D) government must establish a rationing system to make sure that the good is fairly distributed.

Question 36

A typical demand curve shows that:

A) as people earn more income, they buy more of a good.
B) as supply increases, the amount purchased decreases.
C) people tend to buy more of a good than they really want.
D) people tend to buy more of a good when its price decreases.

Question 37

Productivity and its resulting economic activity is predicated on the following fundamental factor:

A) Expenditures
B) Savings
C) Investments
D) Credit
E) all of the above

Question 38

Economies move and grow as a result of activities of the following:

A) Consumers
B) Businesses
C) Government
D) large businesses
E) Everyone

Question 39

Economies growth depends upon:

A) the development stage of the economy
B) its key GDP drivers
C) government spending
D) total market value of the goods and services a nation produces
E) the development stage of the economy and its key GDP drivers

Question 40

Selling the same product in essentially the same way worldwide is known as:

A) socio-cultural based marketing.
B) universal sales standards.
C) single-phase marketing.
D) global marketing.

Question 41

___________ exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

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

Question 42

The markets for laundry detergents,soft drinks,and automobiles all are dominated by just a few sellers.Economists would classify these markets as examples of:

A) monopolistic competition.
B) perfect competition.
C) an oligopoly.
D) a monopoly.

Question 43

One of the most-often-used business tools to assess the market they are operating within is a business model created by Michael Porter of the Harvard Business School called:

A) Industry Attractiveness Model
B) Five Forces Model
C) Competition Model
D) Macro-Economic Model
E) Industry Competitiveness Model

Question 44

An oligopoly is a market that is characterized by:

A) one firm that totally dominates the supply of the product.
B) a large number of small firms all producing very similar products.
C) a few large sellers who dominate the market supply.
D) several small firms that compete primarily by differentiating their products.

Question 45

Jane's Garden Center exists in a market where there are many sellers & no seller is large enough to dictate the price of a product.Under what degree of competition does Jane's company compete?

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

Question 46

The danger with geographic clustering occurs when such distinctness occurs at the broader macro level,resulting in what?

A) The cost of visiting Canada by residents of the U.S. is now more expensive than before
B) The ability of governments to effectively control economic expansion or contraction
C) The increased cost of developing new products and services
D) The inability of governments to effectively control economic expansion or contraction
E) The need to import skilled and well-educated workers due to a shortage domestically

Question 47

In most large cities there are a large number of bakeries.These bakeries produce similar,but not identical,products.Some bakeries claim to have the best cheesecakes in town,while others brag about their cookies or specialty breads.The bakery market in a large city is an example of:

A) monopolistic competition.
B) perfect competition.
C) an oligopoly.
D) a monopoly.

Question 48

Susan Gilles wants to invest in a Tim Horton's franchise but opts not to once she finds out just how much it costs to buy a franchise.She decides to start her own independent coffee shop.She understands the need to differentiate her business from all the other coffee shops,given the type of competition that exists in this industry,which is,

A) an oligopoly.
B) perfect competition.
C) monopolistic competition.
D) a monopoly.

Question 49

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

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

Question 50

Kwality Computers utilizes the same promotional message about their product worldwide.This is an example of:

A) a letter of credit arrangement.
B) global marketing.
C) multinational sensitivity.
D) countertrading efficiency.

Question 51

Paula,a Canadian businessperson who closely follows international business conditions,recently read a newspaper article predicting that the value of the dollar will soon fall.If this article is correct,Paula should expect:

A) prices of imported goods to rise, and prices of Canadian goods sold overseas to rise as well.
B) prices of imported goods to rise, but prices of Canadian goods sold overseas to fall.
C) prices of imported goods to fall, and prices of Canadian goods sold overseas to fall as well.
D) prices of imported goods to fall, but prices of Canadian goods sold overseas to rise.

Question 52

Which of the following is NOT one of the prominent trends which Canadian managers will need to assess in order to plan appropriately for their business operations?

A) Currency Exchange Rate Impact
B) Sustainability and Green Initiatives
C) Inflation
D) Geographic Clustering
E) Large Business Emphasis

Question 53

Why is it important for managers to understand trends which are occurring within the economic market?

A) help managers have confidence in outlaying investments
B) design business strategy
C) pose opportunities and challenges to the livelihood of businesses
D) develop products that customers will want
E) help managers to predict future demand

Question 54

Bigbux is a major producer of whatsits,but it faces competition in the whatsit market from three other major producers.Together,Bigbux and its three large rivals control almost the entire supply of whatsits.The type of market Bigbux is in is called:

A) oligopoly.
B) duopoly.
C) monopolistic competition.
D) quasi-monopoly.

Question 55

Which of the following is NOT one of the prominent trends which Canadian managers will need to assess in order to plan appropriately for their business operations?

A) Currency Exchange Rate Impact
B) Sustainability and Green Initiatives
C) Energy Prices
D) Geographic Clustering
E) Small Business Emphasis

Question 56

Inflation robs an economy of true growth and __________ negatively impacts the confidence levels of consumers and business operators alike.

A) Physically
B) Psychologically
C) Demographically
D) Geographically
E) Mentally

Question 57

Daily changes are influenced by both controllable and non-controllable factors.In many cases,these changes can be the result of broader _________ forces beyond a specific industry.

A) micro-economic
B) macro-economic
C) Business
D) National
E) International

Question 58

Canada's aging workforce is poised to impact the employment needs of Canada's energy sector,resulting in what?

A) The cost of visiting Canada by residents of the U.S. is now more expensive than before
B) The ability of governments to effectively control economic expansion or contraction
C) The increased cost of developing new products and services
D) The inability of governments to effectively control economic expansion or contraction
E) The need to import skilled and well-educated workers due to a shortage domestically

Question 59

__________ is characterized by a large number of firms selling products that appear to be identical.

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

Question 60

The presence of competition in free markets:

A) is undesirable because it results in unnecessary duplication of efforts.
B) typically results in better quality and lower prices.
C) is rare, since most markets eventually evolve into monopolies.
D) is undesirable, because one big firm can usually produce goods more efficiently than a large number of small firms.

Question 61

Productivity is extremely important to a country,as it measures its economic prosperity.Canadian businesses are criticized for not spending enough on research and development.

Question 62

In capitalist countries,the government decides what to produce and how the goods and services will be produced.

Question 63

Inflation refers to a general rise in the prices of goods and services over time.

Question 64

An important economic trend has been for free-market economies to move more toward socialism while command economies move more toward free markets.

Question 65

If the quantity supplied in a market exceeds the quantity demanded,a shortage will exist.

Question 66

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

Question 67

If a shortage exists in a market for a good,the price of that good will tend to fall.

Question 68

The standard of living rises because people have less money to spend.

Question 69

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time.

Question 70

As managers,we must not only be in tune with the general directions which are occurring,but also with the ______________ which will develop as a result of such increased economic activity and interdependency.

A) Problems
B) Threats
C) Diseases
D) opportunities and threats
E) Prospects

Question 71

Managers will also assess,at the macro level,the political,social,technological,environmental,and legal changes which are occurring.This analysis is commonly referred to as a ________ analysis

A) PESTEL
B) Five Forces
C) Environmental
D) Micro-economic
E) Ecological

Question 72

If we graph the supply and demand curves for a product at a specific time,the point on the graph where the two curves intersect is called the stress point.

Question 73

Price is the key factor that determines both quantity supplied and quantity demanded.

Question 74

At the equilibrium price the quantity consumers desire to buy equals the quantity sellers desire to sell.

Question 75

Managers need to understand what the general indicators are saying about the _______ economy and about the ________ relationship between the key variables governing our mixed economic system

A) past; current
B) future; future
C) current; current
D) past; future
E) current; past

Question 76

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.

Question 77

One of the drawbacks of open markets is the fact that competition in such markets undermines the ability of price to adjust to its equilibrium value in the long run.

Question 78

Countries that rely on a free market system often are plagued by persistent shortages or surpluses of goods and services.

Question 79

Managers assess the macro level,the political,social,technological,environmental,and legal changes in their environment.This analysis is commonly referred to as a ________ analysis

A) Competitive
B) Five Forces
C) Environmental
D) PESTEL
E) ecological

Question 80

Economic expansion occurs when an economy is growing and people are spending more money.