Question 1

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) C) and D)
F) A) and D)

Question 2

___________ studies the operation of a nation's economy as a whole.

Accepted Answer

A)   Microeconomics
B)   Socioeconomics
C)   Econometrics
D)   MacroeconomicsE) A) and B)
F) A) and C)

Question 3

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?

Accepted Answer

A)   The Fed is an agency of the U.S.Treasury Department that has the responsibility of collecting tax receipts for the IRS.
B)   The Fed manages the U.S.money supply and interest rates.
C)   The Fed is the primary government agency involved in carrying out our nation's fiscal policies.
D)   The Fed is the agency of the government that ensures the U.S.maintains enough gold reserves to pay any foreign debts that result from international trade.E) C) and D)
F) B) and D)

Question 4

In an effort to promote rapid growth,the government of Goldinia has kept taxes low,done little to regulate business activities,and implemented only modest social programs.The government is now facing political pressure to do more to clean up the environment and to reduce the inequalities of income and wealth.Which of the following statements is most accurate? Goldinia's government is currently taking:

Accepted Answer

A)   A purely capitalist approach to achieve its economic goals,and is likely to continue doing so in the future.
B)   A purely socialist approach to achieve its economics goals,and is likely to continue doing so in the future.
C)   A predominately socialist approach to achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more capitalist approach in the future.
D)   A predominately capitalist approach toward achieving economic goals,but the current pressures it faces suggest it is likely to adopt a more socialist approach in the future.E) B) and C)
F) A) and C)

Question 5

One reason the CPI is monitored very closely by government,businesses,and workers is that:

Accepted Answer

A)   It indicates whether we are running a budget surplus or a deficit.
B)   Some wages,interest rates,tax rates,and government benefits are tied to changes in the value of the CPI.
C)   It is the best measure of worker productivity in the service sector.
D)   The gross domestic product is computed from the reported increases in the CPI.E) B) and D)
F) B) and C)

Question 6

Economics is the study of how a society _________________.

Accepted Answer

A)   invests wisely in the stock market
B)   employs resources to produce goods and services and distribute them among competing groups and individuals
C)   employs statistical techniques to make predictions about the evolution of society over the long run
D)   governs itself for the good of its citizensE) All of the above
F) B) and C)

Question 7

The size of the national debt increases when the federal government runs a deficit.

Accepted Answer

A) True 
 B)False

Question 8

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Accepted Answer

A) True 
 B)False

Question 9

If the government wants to jump-start the economy resulting in more consumer spending,it will raise taxes.

Accepted Answer

A) True 
 B)False

Question 10

The _________ is a statistic used to compute the pace of inflation or deflation.

Accepted Answer

A)   consumer price index
B)   gross domestic product
C)   index of leading indicators
D)   index of inflationary trendsE) B) and C)
F) None of the above

Question 11

Jorge Martinez is a well-educated entrepreneur who operated a small business in his home country of Florentina.At the encouragement of his American relatives,Jorge recently immigrated to the United States and applied for U.S.citizenship."In Florentina,tax rates were very high," Jorge complained."The government used the taxes I paid to finance all sorts of social programs to help the less fortunate.While this is a noble goal,it has really undermined the profit incentive of individuals such as me.I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing a(n) :

Accepted Answer

A)   Antitrust problem.
B)   Depression.
C)   Brain drain.
D)   Budget surplus.E) B) and C)
F) All of the above

Question 12

Global economics and politics have no significant influence on businesses in the United States.

Accepted Answer

A) True 
 B)False

Question 13

Economic progress can occur when business owners provide jobs and economic growth for their employees,their communities,and themselves.

Accepted Answer

A) True 
 B)False

Question 14

GDP figures do not include the value of illegal activities.

Accepted Answer

A) True 
 B)False

Question 15

Gabby and Gus Malloy recently got pre-approved on a loan for their first house purchase.They are speculating on how much they should bid on their number one choice - a small,three-bedroom bungalow near a major college town.Which of the following indicators may be an important factor in whether they are able to successfully put in a low bid?

Accepted Answer

A)   The federal tax rate in that area
B)   The unemployment rate in that area
C)   The producer's price index in that area
D)   The CMI - consumer's marginal indexE) C) and D)
F) A) and D)

Question 16

A free market is one in which decisions about what to produce and in what quantities are made by:

Accepted Answer

A)   the Fed
B)   the community
C)   the market
D)   the CongressE) B) and C)
F) None of the above

Question 17

Incentive to own and operate businesses is high in nations whose governments are proponents of socialistic practices.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Accepted Answer

A) True 
 B)False

Question 20

Robin just graduated from college and is seeking her first job.She received a degree in engineering at a prestigious university.Robin has several leads and has heard that the market for engineers is very strong,so she is convinced that she should locate a good job in the near future.Robin's current situation is an example of structural unemployment.

Accepted Answer

A) True 
 B)False

Exam 2: Understanding How Economics Affects Business

Correct Answer
verified

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Correct Answer
verified

One reason the CPI is monitored very closely by government,businesses,and workers is that:

Correct Answer
verified

Correct Answer
verified

Global economics and politics have no significant influence on businesses in the United States.

Correct Answer
verified

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?

Correct Answer
verified

If the government wants to jump-start the economy resulting in more consumer spending,it will raise taxes.

Correct Answer
verified

Economic progress can occur when business owners provide jobs and economic growth for their employees,their communities,and themselves.

Correct Answer
verified

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Correct Answer
verified

Incentive to own and operate businesses is high in nations whose governments are proponents of socialistic practices.

Correct Answer
verified

Economics is the study of how a society _________________.

Correct Answer
verified

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

Correct Answer
verified

A free market is one in which decisions about what to produce and in what quantities are made by:

Correct Answer
verified

Correct Answer
verified

___________ studies the operation of a nation's economy as a whole.

Correct Answer
verified

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

Correct Answer
verified

The _________ is a statistic used to compute the pace of inflation or deflation.

Correct Answer
verified

The size of the national debt increases when the federal government runs a deficit.

Correct Answer
verified

Correct Answer
verified

GDP figures do not include the value of illegal activities.

Correct Answer
verified

Exam 2: Understanding How Economics Affects Business

Correct AnswerverifiedShow Answer

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Correct AnswerverifiedShow Answer

One reason the CPI is monitored very closely by government,businesses,and workers is that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Global economics and politics have no significant influence on businesses in the United States.

Correct AnswerverifiedShow Answer

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?

Correct AnswerverifiedShow Answer

If the government wants to jump-start the economy resulting in more consumer spending,it will raise taxes.

Correct AnswerverifiedShow Answer

Economic progress can occur when business owners provide jobs and economic growth for their employees,their communities,and themselves.

Correct AnswerverifiedShow Answer

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Correct AnswerverifiedShow Answer

Incentive to own and operate businesses is high in nations whose governments are proponents of socialistic practices.

Correct AnswerverifiedShow Answer

Economics is the study of how a society _________________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A free market is one in which decisions about what to produce and in what quantities are made by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

___________ studies the operation of a nation's economy as a whole.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The _________ is a statistic used to compute the pace of inflation or deflation.

Correct AnswerverifiedShow Answer

The size of the national debt increases when the federal government runs a deficit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

GDP figures do not include the value of illegal activities.

Correct AnswerverifiedShow Answer

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