Question 1

One way to lessen the U.S.government budget deficit is to:

Accepted Answer

A)  cut spending.
B)  increase spending.
C)  call-in government savings bonds.
D)  increase government social programs such as welfare,food-stamps,and Medicare.E) A) and B)
F) C) and D)

Question 2

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) B) and C)
F) C) and D)

Question 3

A young couple living in rural west-central Missouri heard about the closing of a local grocery store.Although a small operation,it served a small community that would now have to travel another 20 miles to the nearest grocery store.With help from a local realtor and banker,the couple purchased the store,remodeled it,and re-opened it.As new store owners,they had to carefully watch cash flow.As their customer base began to grow,they began offering hot food,and hired others to help with the operation.The economic benefit created in this story is called:

Accepted Answer

A)  an economic intervention.
B)  an economic crisis control.
C)  the invisible hand.
D)  the deliberate process. Personal freedom is an important premise of wealth creation.Entrepreneurs,acting in their own self-interest need the personal freedom to own property and keep the earning from their hard work.E) B) and D)
F) None of the above

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Yesterday,Casey received a cable company ad for bundled TV,telephone,and Internet service that cost appreciably more than what she is currently paying.At the same time,she received a notice from her utility company that summer rates would be increasing.Her school books are costing almost twice what they cost last year,and yesterday,gasoline cost her 30 cents more per gallon than it did last week.As she ponders the situation,she can't help but wonder how prices could be rising when so many people have lost their jobs and are cutting back on expenditures.She is certain that this situation characterizes her economics professor's description of stagflation.

Accepted Answer

A) True 
 B)False

Question 6

In 2010,the U.S.unemployment rate was at its lowest point in 10 years.

Accepted Answer

A) True 
 B)False

Question 7

Your professor showed you an Internet video of the chair of the Federal Reserve Bank speaking to the American public.The message he is conveying indicates that Fed economists are worried about inflation and believe the best course of action would be to slow the economy.Which of the following policies is the Fed most likely to pursue?

Accepted Answer

A)  Increase taxes.
B)  Decrease interest rates.
C)  Restrict the money supply and increase interest rates.
D)  Devalue the dollar on international currency exchanges.E) B) and C)
F) A) and D)

Question 8

Governments that were predominantly capitalistic are moving toward socialism,while governments that were predominantly socialistic are moving toward capitalism.

Accepted Answer

A) True 
 B)False

Question 9

Communism is an economic system in which:

Accepted Answer

A)  The government and private citizens own equal shares of the economic resources.
B)  Almost all of the productive resources are owned by private businesses.
C)  The government makes almost all of the major economic decisions.
D)  Individual consumers make all economic decisions.E) B) and C)
F) C) and D)

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

A typical demand curve shows that:

Accepted Answer

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

Question 12

Identify and describe the 4 basic rights that form the foundation of capitalism.

Accepted Answer

The four basic rights are the right to p...

Question 13

Fiscal policy involves increases or decreases in:

Accepted Answer

A)  The money supply.
B)  Interest rates.
C)  Government spending and taxes.
D)  Exports and imports.E) A) and D)
F) B) and C)

Question 14

In socialist economies,the government owns some,if not most basic businesses such as telecommunications systems and utilities.

Accepted Answer

A) True 
 B)False

Question 15

John complained to his buddy,Frank,that prices have increased a lot over the past year.Frank disagreed,saying that the prices of some goods have gone up a bit,but other prices have declined,noting that you can get some good buys on houses right now.Frank feels that the average price of consumer goods hasn't changed.Frank and John can refer to the __________ to learn how government economists currently view the price situation.

Accepted Answer

A)  GDP
B)  CPI
C)  PPI
D)  MEWE) A) and C)
F) A) and B)

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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) All of the above
F) None of the above

Question 18

Discuss the views of economist Adam Smith.How does the "invisible hand" philosophy suggested by Smith benefit society as a whole?

Accepted Answer

Adam Smith believed in a free-market sys...

Question 19

A rising GDP,rising unemployment rate,and rising inflation rate signify a healthy economy.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements about capitalism is the most accurate?

Accepted Answer

A)  In capitalist economies,most resources are owned by the government.
B)  A strength of capitalism is its ability to deal with environmental problems.
C)  Capitalism is characterized by unequal distribution of wealth and income.
D)  A drawback of capitalism is that people have little freedom to pursue their own goals.E) A) and B)
F) C) and D)

Exam 2: Understanding Economics and How It Affects Business

Correct Answer
verified

Identify and describe the 4 basic rights that form the foundation of capitalism.

Correct Answer
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The four basic rights are the right to p...
View Answer

Correct Answer
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Correct Answer
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Governments that were predominantly capitalistic are moving toward socialism,while governments that were predominantly socialistic are moving toward capitalism.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

One way to lessen the U.S.government budget deficit is to:

Correct Answer
verified

A typical demand curve shows that:

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements about capitalism is the most accurate?

Correct Answer
verified

A rising GDP,rising unemployment rate,and rising inflation rate signify a healthy economy.

Correct Answer
verified

Discuss the views of economist Adam Smith.How does the "invisible hand" philosophy suggested by Smith benefit society as a whole?

Correct Answer
verified
Adam Smith believed in a free-market sys...
View Answer

In 2010,the U.S.unemployment rate was at its lowest point in 10 years.

Correct Answer
verified

Correct Answer
verified

In socialist economies,the government owns some,if not most basic businesses such as telecommunications systems and utilities.

Correct Answer
verified

Fiscal policy involves increases or decreases in:

Correct Answer
verified

Correct Answer
verified

Communism is an economic system in which:

Correct Answer
verified

A simple supply curve shows a relationship between the:

Correct Answer
verified

Exam 2: Understanding Economics and How It Affects Business

Correct AnswerverifiedShow Answer

Identify and describe the 4 basic rights that form the foundation of capitalism.

Correct AnswerverifiedThe four basic rights are the right to p...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Governments that were predominantly capitalistic are moving toward socialism,while governments that were predominantly socialistic are moving toward capitalism.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

One way to lessen the U.S.government budget deficit is to:

Correct AnswerverifiedShow Answer

A typical demand curve shows that:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements about capitalism is the most accurate?

Correct AnswerverifiedShow Answer

A rising GDP,rising unemployment rate,and rising inflation rate signify a healthy economy.

Correct AnswerverifiedShow Answer

Discuss the views of economist Adam Smith.How does the "invisible hand" philosophy suggested by Smith benefit society as a whole?

Correct AnswerverifiedAdam Smith believed in a free-market sys...View AnswerShow Answer

In 2010,the U.S.unemployment rate was at its lowest point in 10 years.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In socialist economies,the government owns some,if not most basic businesses such as telecommunications systems and utilities.

Correct AnswerverifiedShow Answer

Fiscal policy involves increases or decreases in:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Communism is an economic system in which:

Correct AnswerverifiedShow Answer

A simple supply curve shows a relationship between the:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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The four basic rights are the right to p...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Adam Smith believed in a free-market sys...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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