Question 1

Any output produced by U.S.firms is included in the value of U.S.GDP,even if the output was produced in a foreign country.

Accepted Answer

A) True 
 B)False

Question 2

The higher the measurement of productivity,the higher the likely costs of production.

Accepted Answer

A) True 
 B)False

Question 3

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Accepted Answer

A)   The right to own private property.
B)   Freedom of expression.
C)   Freedom of choice.
D)   Freedom of competition.E) B) and D)
F) B) and C)

Question 4

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

Accepted Answer

A) True 
 B)False

Question 5

The measure used to report price changes at the wholesale level is the:

Accepted Answer

A)   gross domestic product (GDP) .
B)   consumer price index (CPI) .
C)   wholesale price index (WPI) .
D)   producer price index (PPI) .E) None of the above
F) B) and D)

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A basic right under capitalism is the right of businesses to receive government funding.

Accepted Answer

A) True 
 B)False

Question 8

Recently,Hugo Chavez,the Prime Minister of Venezuela,announced that he is standing behind the concept of state owned utilities,public schools,and the communications industry of his nation.Although not all industry is owned and managed by the government,his ideas would lead one to believe that he has a preference for:

Accepted Answer

A)   A capitalistic state
B)   A socialistic state
C)   A communistic state
D)   A nationalistic stateE) All of the above
F) A) and B)

Question 9

A simple supply curve shows a relationship between the:

Accepted Answer

A)   Amount of labor 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 of that good sellers are willing to offer for sale at a specific point in time.
D)   Amount of a good a firm produces and the amount demanded by consumers.E) A) and C)
F) B) and D)

Question 10

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

Accepted Answer

A)   Pure capitalism.
B)   Pure socialism.
C)   Command economies.
D)   Mixed economies.E) A) and B)
F) A) and C)

Question 11

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

Accepted Answer

A)   Perfect competition
B)   Monopolistic competition
C)   Oligopoly
D)   A monopolyE) C) and D)
F) None of the above

Question 12

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

Accepted Answer

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.E) B) and D)
F) A) and B)

Question 13

Which of the following is an important premise of Smith's conclusions about economic prosperity?

Accepted Answer

A)   Individual freedom is necessary if a society is to prosper.
B)   Understanding the concept of survival of the fittest will lead to prosperity.
C)   Determining what motivates people will lead to prosperity.
D)   Command economies and structured markets must be in place before we can work toward prosperity.E) A) and B)
F) A) and C)

Question 14

Brain drain is the loss of the best and brightest people to other countries.

Accepted Answer

A) True 
 B)False

Question 15

The four basic types of unemployment are frictional,structural,seasonal,and:

Accepted Answer

A)   cyclical.
B)   procedural.
C)   industrial.
D)   traditional.E) A) and B)
F) None of the above

Question 16

An oligopoly is a market that is characterized by:

Accepted Answer

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.
D)   Several small firms that compete primarily by differentiating their products.E) None of the above
F) B) and C)

Question 17

__________ is a condition in which the price increases are slowing.

Accepted Answer

A)   Deflation
B)   Disinflation
C)   Stagflation
D)   UniflationE) C) and D)
F) All of the above

Question 18

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom.

Accepted Answer

A) True 
 B)False

Question 19

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Accepted Answer

A)   Frictional
B)   Structural
C)   Cyclical
D)   SeasonalE) A) and B)
F) A) and C)

Question 20

In the U.S. ,the __________ has the role of managing the money supply and interest rates.

Accepted Answer

A)   United States Treasury
B)   Federal Reserve Bank
C)   State Department
D)   Federal Deposit Insurance CorporationE) A) and D)
F) A) and B)

Exam 2: Understanding How Economics Affects Business

A simple supply curve shows a relationship between the:

Correct Answer
verified

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

Correct Answer
verified

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Correct Answer
verified

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

Correct Answer
verified

Any output produced by U.S.firms is included in the value of U.S.GDP,even if the output was produced in a foreign country.

Correct Answer
verified

__________ is a condition in which the price increases are slowing.

Correct Answer
verified

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Correct Answer
verified

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom.

Correct Answer
verified

The higher the measurement of productivity,the higher the likely costs of production.

Correct Answer
verified

Which of the following is an important premise of Smith's conclusions about economic prosperity?

Correct Answer
verified

In the U.S. ,the __________ has the role of managing the money supply and interest rates.

Correct Answer
verified

A basic right under capitalism is the right of businesses to receive government funding.

Correct Answer
verified

An oligopoly is a market that is characterized by:

Correct Answer
verified

Brain drain is the loss of the best and brightest people to other countries.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The four basic types of unemployment are frictional,structural,seasonal,and:

Correct Answer
verified

Correct Answer
verified

The measure used to report price changes at the wholesale level is the:

Correct Answer
verified

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

Correct Answer
verified

Exam 2: Understanding How Economics Affects Business

A simple supply curve shows a relationship between the:

Correct AnswerverifiedShow Answer

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

Correct AnswerverifiedShow Answer

The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Any output produced by U.S.firms is included in the value of U.S.GDP,even if the output was produced in a foreign country.

Correct AnswerverifiedShow Answer

__________ is a condition in which the price increases are slowing.

Correct AnswerverifiedShow Answer

__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Correct AnswerverifiedShow Answer

Monetary policy is implemented to ease the up and down swings of business cycles,while fiscal policy is implemented to create swings when the cycle is stalled in an economic boom.

Correct AnswerverifiedShow Answer

The higher the measurement of productivity,the higher the likely costs of production.

Correct AnswerverifiedShow Answer

Which of the following is an important premise of Smith's conclusions about economic prosperity?

Correct AnswerverifiedShow Answer

In the U.S. ,the __________ has the role of managing the money supply and interest rates.

Correct AnswerverifiedShow Answer

A basic right under capitalism is the right of businesses to receive government funding.

Correct AnswerverifiedShow Answer

An oligopoly is a market that is characterized by:

Correct AnswerverifiedShow Answer

Brain drain is the loss of the best and brightest people to other countries.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The four basic types of unemployment are frictional,structural,seasonal,and:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The measure used to report price changes at the wholesale level is the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
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