Question 1

The broadcast that reported a decline in total output for the United States probably got some of its information from the government's measurement of ________.

Accepted Answer

A)   GDP
B)   CPI
C)   federal deficit
D)   balance of paymentsE) A) and D)
F) None of the above

Question 2

The U.S. economic system relies on

Accepted Answer

A)   the private sector to measure its economic well-being.
B)   industries that produce capital equipment to determine how well things are going.
C)   frictional unemployment statistics as the sole measure of economic health.
D)   key economic indicators such as GDP, to measure economic progress.E) None of the above
F) B) and C)

Question 3

The measurement of total sales volume at all stages of production is called the gross domestic product (GDP).

Accepted Answer

A) True 
 B)False

Question 4

In recent years, countries with communist economic and political systems have

Accepted Answer

A)   enjoyed periods of great prosperity.
B)   experienced economic depression.
C)   placed even more importance on individual ownership of businesses.
D)   grown very slowly, but have avoided the severe problems that have plagued some capitalist economies in Asia and Europe.E) B) and D)
F) B) and C)

Question 5

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

Accepted Answer

A)   monopolistic competition.
B)   perfect competition.
C)   an oligopoly.
D)   a monopoly.E) B) and C)
F) All of the above

Question 6

For many years, Senator Juliana Higdon has called for more government regulation of business. "After all," the senator said recently, "businesses are out to make a profit, not to create jobs or serve their customers. The government needs to pass more laws to require businesses to take the interests of consumers and workers into account." From these comments, it is clear that Senator Higdon

Accepted Answer

A)   agrees with the ideas of Thomas Malthus.
B)   does not accept the "invisible hand" idea brought forth by Adam Smith.
C)   is unaware of the fact that most businesses in the United States are owned by the government.
D)   does not realize that government regulation is already the main determinant of business decisions in capitalist economies.E) B) and D)
F) A) and C)

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The foundation of the U.S. economic system is based on

Accepted Answer

A)   capitalism.
B)   the ideas of Thomas Malthus.
C)   equality.
D)   the saying, "from each according to ability, to each according to need."E) A) and B)
F) None of the above

Question 9

In developing nations of the world, population has leveled off and is not expected to increase dramatically in the future.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Capitalism is the foundation of the U.S. economic system.

Accepted Answer

A) True 
 B)False

Question 12

An incredibly rare stone known as Diamontite is used in many consumer products, including watch faces, smartphones, computer monitors, and tablets. In one year, the price of Diamontite has gone from $8/lb. to $107/lb. Under these circumstances and the fact that more companies are looking to use Diamontite in their products, a graph of the supply and demand for this product would show

Accepted Answer

A)   the current price of Diamontite to be below the equilibrium price for this rare gem.
B)   the price of Diamontite to be above the equilibrium price for this rare gem.
C)   the price of Diamontite to reflect the adjustment of quantity demanded and quantity supplied.
D)   consumer demand for any products using Diamontite to shift to the right indicating the desire to purchase the rare gem at any price.E) A) and B)
F) A) and C)

Question 13

________ is the name of a free-market economic system in which most of the factors of production and distribution -- such as land, factories, railroads, and stores -- are owned by individuals.

Accepted Answer

A)   Socialism
B)   Capitalism
C)   Communism
D)   MarginalismE) All of the above
F) A) and B)

Question 14

________ is a condition characterized by slowing price increases.

Accepted Answer

A)   Deflation
B)   Disinflation
C)   Stagflation
D)   UniflationE) C) and D)
F) A) and C)

Question 15

Colin lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Colin maintains ownership due to

Accepted Answer

A)   eminent domain.
B)   the freedom of choice.
C)   the right to own private property.
D)   the freedom of competition.E) C) and D)
F) None of the above

Question 16

Governments that were predominantly capitalist are moving toward socialism, while governments that were predominantly socialist are moving toward capitalism.

Accepted Answer

A) True 
 B)False

Question 17

Resource development is

Accepted Answer

A)   the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
B)   the study of how to increase the amount of available resources and create conditions that will make better use of these resources.
C)   the part of economics that looks at the operation of a nation's economy as a whole.
D)   the part of economics that looks at particular markets.E) B) and D)
F) C) and D)

Question 18

Fiscal policy involves the federal government's efforts to stabilize the economy by increasing or decreasing taxes and/or government spending.

Accepted Answer

A) True 
 B)False

Question 19

During the a recession, the government of Cashland flooded several banking, financial services, and insurance firms with government funds in exchange (at least temporarily)  for government ownership rights. This move signaled the government's concern that the global banking system might collapse if these firms ended up in bankruptcy. This decision for government involvement in these firms demonstrates

Accepted Answer

A)   the unforgiving nature of capitalism.
B)   the desire for more individuals in the Cashland to live under a socialist system.
C)   the trend of mostly capitalist nations to move toward socialism.
D)   the freedoms the Cashland government has under capitalism.E) B) and D)
F) B) and C)

Question 20

When the market price of a good is below the equilibrium price, and all other determinants are unchanged

Accepted Answer

A)   the quantity demanded will be greater than the quantity supplied.
B)   the supply curve will be to the right of the demand curve.
C)   a surplus will exist in the market.
D)   the government will regulate the price of the good to ensure equilibrium is attained.E) A) and B)
F) B) and D)

Exam 2: Understanding Economics and How It Affects Business

When the market price of a good is below the equilibrium price, and all other determinants are unchanged

Correct Answer
verified

The broadcast that reported a decline in total output for the United States probably got some of its information from the government's measurement of ________.

Correct Answer
verified

Capitalism is the foundation of the U.S. economic system.

Correct Answer
verified

The measurement of total sales volume at all stages of production is called the gross domestic product (GDP).

Correct Answer
verified

The foundation of the U.S. economic system is based on

Correct Answer
verified

The U.S. economic system relies on

Correct Answer
verified

Fiscal policy involves the federal government's efforts to stabilize the economy by increasing or decreasing taxes and/or government spending.

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

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

Correct Answer
verified

Correct Answer
verified

Governments that were predominantly capitalist are moving toward socialism, while governments that were predominantly socialist are moving toward capitalism.

Correct Answer
verified

________ is a condition characterized by slowing price increases.

Correct Answer
verified

In developing nations of the world, population has leveled off and is not expected to increase dramatically in the future.

Correct Answer
verified

Resource development is

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Colin lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Colin maintains ownership due to

Correct Answer
verified

________ is the name of a free-market economic system in which most of the factors of production and distribution -- such as land, factories, railroads, and stores -- are owned by individuals.

Correct Answer
verified

In recent years, countries with communist economic and political systems have

Correct Answer
verified

Correct Answer
verified

Exam 2: Understanding Economics and How It Affects Business

When the market price of a good is below the equilibrium price, and all other determinants are unchanged

Correct AnswerverifiedShow Answer

The broadcast that reported a decline in total output for the United States probably got some of its information from the government's measurement of ________.

Correct AnswerverifiedShow Answer

Capitalism is the foundation of the U.S. economic system.

Correct AnswerverifiedShow Answer

The measurement of total sales volume at all stages of production is called the gross domestic product (GDP).

Correct AnswerverifiedShow Answer

The foundation of the U.S. economic system is based on

Correct AnswerverifiedShow Answer

The U.S. economic system relies on

Correct AnswerverifiedShow Answer

Fiscal policy involves the federal government's efforts to stabilize the economy by increasing or decreasing taxes and/or government spending.

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

There's a large number of bakeries in the United States and each of these bakeries produces similar, but not identical, products. Some bakeries will claim to have the best cupcakes in town, while others will brag about other items like cookies or specialty breads. The bakery market is an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Governments that were predominantly capitalist are moving toward socialism, while governments that were predominantly socialist are moving toward capitalism.

Correct AnswerverifiedShow Answer

________ is a condition characterized by slowing price increases.

Correct AnswerverifiedShow Answer

In developing nations of the world, population has leveled off and is not expected to increase dramatically in the future.

Correct AnswerverifiedShow Answer

Resource development is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Colin lives in a nation whose government embraces capitalism. He owns his own home and car, as well as his own business and building. Colin maintains ownership due to

Correct AnswerverifiedShow Answer

________ is the name of a free-market economic system in which most of the factors of production and distribution -- such as land, factories, railroads, and stores -- are owned by individuals.

Correct AnswerverifiedShow Answer

In recent years, countries with communist economic and political systems have

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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