Question 1

The total value of a country's output of final goods and services in a given year is known as the nation's gross domestic product (GDP).

Accepted Answer

A) True 
 B)False

Question 2

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

Accepted Answer

A) True 
 B)False

Question 3

No country is solely capitalist.What issues does the Canadian government get involved in?

Accepted Answer

The text notes that Canadian governments...

Question 4

Adam Smith felt that incentives to seek personal gain would insure the creation of wealth,but that the government must step in to make sure that this wealth was equitably distributed.

Accepted Answer

A) True 
 B)False  False

Question 5

Explain what the business cycle is.

Accepted Answer

The Business cycle (also known as the economic cycles)is the periodic rise and fall that occurs in economies over time.30 these fluctuations are often measured using the real gross domestic product.Economists look at a number of types of cycles,from seasonal cycles that occur within a year to cycles that occur every 48 to 60 years.Economist Joseph Schumpeter identified the four phases of long-term business cycles as boom,recession,depression,recovery:
1.An economic boom brings jobs,growth,and economic prosperity.
2.Recession is two or more consecutive quarters of decline in the GDP.In a recession,prices fall,people purchase fewer products,and businesses fail.A recession has many negative consequences for an economy high unemployment,increased business failures,and an overall drop in living standards.
3.A depression is a severe recession usually accompanied by deflation.Business cycles rarely go through a depression phase.In fact,while there were many business cycles during the twentieth century,there was only one severe depression (in the 1930s).
4.A recovery occurs when the economy stabilizes and starts to grow.This eventually leads to an economic boom,starting the cycle all over again.

Question 6

Adam Smith the author of The Wealth of Nations,said that all companies would function best with more government involvement.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

In a free market system,decisions about what to produce and in what quantities are made by the market.

Accepted Answer

A) True 
 B)False

Question 9

A command system is characterized by:

Accepted Answer

A)  reliance on the government to determine what is produced and who gets the output.
B)  freedom of choice and freedom of competition.
C)  reliance on the forces of supply and demand to determine what is produced.
D)  an extremely rapid rate of economic growth.E) All of the above
F) B) and D) A

Question 10

Legislation has ended the monopoly status of utilities in some areas.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Economist Sue Pligh is examining how consumers in the automobile market have responded to recent price increases by car manufacturers.Sue's efforts reflect the microeconomic perspective of economics.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  remain constant.
B)  fluctuate randomly around its equilibrium value.
C)  increase.
D)  decrease.E) None of the above
F) A) and B)

Question 14

The presence of competition in free markets:

Accepted Answer

A)  typically results in better quality and lower prices.
B)  is rare,since most markets eventually evolve into monopolies.
C)  is undesirable because it results in unnecessary duplication of efforts.
D)  is undesirable,because one big firm can usually produce goods more efficiently than a large number of small firms.E) None of the above
F) A) and D)

Question 15

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

Accepted Answer

A)  persistent shortages of basic goods such as food and clothing.
B)  a great inequality in the distribution of wealth and income.
C)  severe inflationary pressures due to rapid economic growth.
D)  too little government regulation of economic activity.E) None of the above
F) A) and B)

Question 16

The economic system that has led to wealth creation in most of the world is known as:

Accepted Answer

A)  free-trade
B)  socialism
C)  communism
D)  capitalismE) B) and D)
F) A) and B)

Question 17

Both socialism and communism are variations of:

Accepted Answer

A)  competitive economies.
B)  free-market economies.
C)  plutocratic systems.
D)  command economies.E) B) and C)
F) All of the above

Question 18

Some wages,tax brackets,interest rates,and government benefits are based on the CPI.

Accepted Answer

A) True 
 B)False

Question 19

is the popular name for a free-market economy in which business people make most of the decisions about what products to produce,how many workers to hire,and what prices to charge for goods and services.

Accepted Answer

A)  Marginalism
B)  Communism
C)  Socialism
D)  CapitalismE) A) and B)
F) A) and C)

Question 20

History shows that free-market capitalism leads to a fair and equitable distribution of wealth.

Accepted Answer

A) True 
 B)False

Exam 2: How Economic Issues Affect Business

The total value of a country's output of final goods and services in a given year is known as the nation's gross domestic product (GDP).

Correct Answer
verified

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

Correct Answer
verified

No country is solely capitalist.What issues does the Canadian government get involved in?

Correct Answer
verified
The text notes that Canadian governments...
View Answer

Adam Smith felt that incentives to seek personal gain would insure the creation of wealth,but that the government must step in to make sure that this wealth was equitably distributed.

Correct Answer
verified
False

Explain what the business cycle is.

Adam Smith the author of The Wealth of Nations,said that all companies would function best with more government involvement.

Correct Answer
verified

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

Correct Answer
verified

In a free market system,decisions about what to produce and in what quantities are made by the market.

Correct Answer
verified

A command system is characterized by:

Correct Answer
verified
A

Legislation has ended the monopoly status of utilities in some areas.

Correct Answer
verified

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

Correct Answer
verified

Economist Sue Pligh is examining how consumers in the automobile market have responded to recent price increases by car manufacturers.Sue's efforts reflect the microeconomic perspective of economics.

Correct Answer
verified

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

Correct Answer
verified

The presence of competition in free markets:

Correct Answer
verified

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

Correct Answer
verified

The economic system that has led to wealth creation in most of the world is known as:

Correct Answer
verified

Both socialism and communism are variations of:

Correct Answer
verified

Some wages,tax brackets,interest rates,and government benefits are based on the CPI.

Correct Answer
verified

is the popular name for a free-market economy in which business people make most of the decisions about what products to produce,how many workers to hire,and what prices to charge for goods and services.

Correct Answer
verified

History shows that free-market capitalism leads to a fair and equitable distribution of wealth.

Correct Answer
verified

Exam 2: How Economic Issues Affect Business

The total value of a country's output of final goods and services in a given year is known as the nation's gross domestic product (GDP).

Correct AnswerverifiedShow Answer

Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.

Correct AnswerverifiedShow Answer

No country is solely capitalist.What issues does the Canadian government get involved in?

Correct AnswerverifiedThe text notes that Canadian governments...View AnswerShow Answer

Adam Smith felt that incentives to seek personal gain would insure the creation of wealth,but that the government must step in to make sure that this wealth was equitably distributed.

Correct AnswerverifiedFalse

Explain what the business cycle is.

Adam Smith the author of The Wealth of Nations,said that all companies would function best with more government involvement.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In a free market system,decisions about what to produce and in what quantities are made by the market.

Correct AnswerverifiedShow Answer

A command system is characterized by:

Correct AnswerverifiedA

Legislation has ended the monopoly status of utilities in some areas.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Economist Sue Pligh is examining how consumers in the automobile market have responded to recent price increases by car manufacturers.Sue's efforts reflect the microeconomic perspective of economics.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The presence of competition in free markets:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The economic system that has led to wealth creation in most of the world is known as:

Correct AnswerverifiedShow Answer

Both socialism and communism are variations of:

Correct AnswerverifiedShow Answer

Some wages,tax brackets,interest rates,and government benefits are based on the CPI.

Correct AnswerverifiedShow Answer

is the popular name for a free-market economy in which business people make most of the decisions about what products to produce,how many workers to hire,and what prices to charge for goods and services.

Correct AnswerverifiedShow Answer

History shows that free-market capitalism leads to a fair and equitable distribution of wealth.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified
The text notes that Canadian governments...
View Answer

Correct Answer
verified
False

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Correct Answer
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A

Correct Answer
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