Question 1

The Canadian economy is a service economy.

Accepted Answer

A) True 
 B)False

Question 2

The primary difference between macroeconomics and microeconomics is that macroeconomics looks at long run economic problems while microeconomics examines short run economic problems.

Accepted Answer

A) True 
 B)False

Question 3

Fatma is a citizen of a country that has an economic system that is primarily based on free market capitalism.Fatma is likely to have the freedom to buy and sell property.

Accepted Answer

A) True 
 B)False

Question 4

Followers of Malthus today believe that there are too many people in the world.

Accepted Answer

A) True 
 B)False

Question 5

One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.

Accepted Answer

A) True 
 B)False

Question 6

According to Adam Smith,the best way for the government to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

Accepted Answer

A) allow entrepreneurs a great deal of personal freedom. 
B) impose high taxes on individuals,and use the revenue to subsidize businesses to encourage them to produce the maximum rate of output. 
C) take over the operation of all firms in major industries,such as telecommunications,transportation,and energy,and operate these firms as non-profit organizations. 
D) allow private ownership of businesses,but make use of extensive regulation to force businesses to behave in a socially desirable way.

Question 7

In the small nation of Equalia,the government owns all of the key businesses.There are severe shortages of many key items,such as food.These features of Equalia's economy are consistent with a communist economic system.

Accepted Answer

A) True 
 B)False

Question 8

is a condition in which the rate of inflation is declining.

Accepted Answer

A) Disinflation 
B) Deflation 
C) Stagflation 
D) De-inflation

Question 9

An oligopoly is a market that is characterized by:

Accepted Answer

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

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Kathleen manages a manufacturing plant for ScanRite,Inc. ,a producer of scanners and other input devices connected to computers.About six months ago,Kathleen asked an assistant to keep track of both work hours and output at her plant.She has compared these figures,and has found that even though the number of workers (and the hours they worked)remained relatively steady over the past six months,the plant's output increased significantly.This indicates that:

Accepted Answer

A) ScanRite prices have increased faster than the wages it pays to its workers. 
B) Kathleen should hire more workers. 
C) the productivity of workers at the ScanRite plant has increased. 
D) the ScanRite plant must have sold off some of its excess inventory.

Question 12

Some communist countries have not allowed their citizens to practice certain religions or change jobs.

Accepted Answer

A) True 
 B)False

Question 13

Socialism and communism are both variations of a free-market economy.

Accepted Answer

A) True 
 B)False

Question 14

The CPI is based on what is happening to the prices of a "basket" of goods and services for an average family.

Accepted Answer

A) True 
 B)False

Question 15

In Canada,massive government support was needed to build our first national rail line.

Accepted Answer

A) True 
 B)False

Question 16

Microeconomics focuses on the decisions and behaviour of people and organizations in particular markets.

Accepted Answer

A) True 
 B)False

Question 17

Most communist countries today are suffering from severe economic problems.

Accepted Answer

A) True 
 B)False

Question 18

Under socialism:

Accepted Answer

A) a major goal of the government is to create incentives to encourage entrepreneurs to create jobs and economic growth. 
B) the basic goal is to make sure that those that create wealth are allowed to keep that wealth. 
C) a major goal of the government is to reduce the inequality in the distribution of wealth. 
D) the most important goal of the government is to keep tax rates extremely low.

Question 19

When the economy is weak,government revenues in Canada

Accepted Answer

A) rise 
B) slowly rise 
C) stay steady 
D) decline

Question 20

In perfect competition,each firm produces a product that is clearly differentiated from the products of other firms in the same market.

Accepted Answer

A) True 
 B)False

Exam 2: How Economic Issues Affect Business

The Canadian economy is a service economy.

The primary difference between macroeconomics and microeconomics is that macroeconomics looks at long run economic problems while microeconomics examines short run economic problems.

Fatma is a citizen of a country that has an economic system that is primarily based on free market capitalism.Fatma is likely to have the freedom to buy and sell property.

Followers of Malthus today believe that there are too many people in the world.

One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.

According to Adam Smith,the best way for the government to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

In the small nation of Equalia,the government owns all of the key businesses.There are severe shortages of many key items,such as food.These features of Equalia's economy are consistent with a communist economic system.

is a condition in which the rate of inflation is declining.

An oligopoly is a market that is characterized by:

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

Some communist countries have not allowed their citizens to practice certain religions or change jobs.

Socialism and communism are both variations of a free-market economy.

The CPI is based on what is happening to the prices of a "basket" of goods and services for an average family.

In Canada,massive government support was needed to build our first national rail line.

Microeconomics focuses on the decisions and behaviour of people and organizations in particular markets.

Most communist countries today are suffering from severe economic problems.

Under socialism:

When the economy is weak,government revenues in Canada

In perfect competition,each firm produces a product that is clearly differentiated from the products of other firms in the same market.