Introduction to Business Environment Chapter 2

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The world's population is growing more slowly than expected, and there are some industrial countries in which growth might be so slow that there will be too many old people and too few young people to support them. (Points : 1)

2. In a free market system, price is determined through negotiation between buyers and sellers. (Points : 1)

3. When there is a surplus of products, manufacturers will tend to raise the price so that they will make a profit from those products they are able to sell. (Points : 1)

4. A communist system is based upon the premise that the government owns almost all major forms of production and almost all economic decisions are made by the government. (Points : 1)

5. A negative consequence of socialism has been brain drain. (Points : 1)

6. The United States is a purely free market economy. (Points : 1)

7. Mixed economies exist where some allocation of resources is made by the marketplace and some by the government. (Points : 1)

8. Betty Bixler worked for Chrysler for 20 years before being laid off when her job was eliminated because updated technology made her job obsolete. Betty is structurally unemployed. (Points : 1)

9. During a recession, we could experience an overall drop in our standard of living, high unemployment, and increased business failures. (Points : 1)

10. When a political candidate indicates that the only way to cut the deficit is to cut spending and raise taxes, the candidate is advocating the use of fiscal policy. (Points : 1)

11. The foundation of the U.S. economic system is considered to be _____. (Points : 1)
A command economy.
A mixed economy.

12. Adam Smith's theory of the "invisible hand" means that _____. (Points : 1)
People should work in order to provide funding for charitable causes.
Through working for their own prosperity, people will actually help the economy grow and prosper.
Governments should own major businesses so that resources are equally distributed.
The government manages the economy through monitoring government taxes and government spending.

13. Which of the following is not one of the four basic rights of a capitalist system? (Points : 1)
The right to have a job
The right to private property
The right to compete
The right to freedom of choice

14. One holiday season a few years ago, there was a toy called Tickle My Elbow that was all the rage. Demand for this toy was so high that stores couldn't keep them on the shelf! There was quite a shortage of Tickle My Elbow that year. When a shortage such as this exists, what generally happens? (Points : 1)
The price goes up.
The price stays the same, and mothers everywhere fight for the last toy.
The government intervenes and forces the manufacturer to make more of the toy.
When customers realize they can't get the toy, they give up, and the price goes down.

15. Citizens of socialist nations can rely on the government to provide all of the following except _____. (Points : 1)
Generous sick leave.
Money to start a business.

16. Socialist systems tend to: (Points : 1)
Encourage innovation.
Keep up with countries like the U.S. in the areas of job and wealth creation.
Discourage the best from working as hard as they can.
Have relatively low tax rates.

17. The country of Amerensk has, for the last several years, been moving from a communist country to a mixed economic system. Which of the following most likely would occur in Amerensk? (Points : 1)
There would be greater social equality.
All people would be guaranteed a job.
The government would have a larger say in what services are produced.
There will be some degree of government control of trade within and among nations (trade protectionism).

18. Which of the following would not be considered a key economic indicator? (Points : 1)
The unemployment rate
The tax rate
The price indexes

19. Which of the following would likely occur during a recession? (Points : 1)
Low unemployment
Decrease in business failures
Increase in the standard of living
Prices fall

20. Which of the following is not a part of the business cycles that occur in economics over time? (Points : 1)
Economic boom
Structural unemployment

  • Introduction to Business Environment Chapter 2 -

    If you expect someone to do all your work for you, you've come to the wrong place.

  • Introduction to Business Environment Chapter 2 -

    come on i have the answers, just wanted to check if i was correct

  • Introduction to Business Environment Chapter 2 -

    If we believed that, you'd probably try to sell us a bridge.

  • Introduction to Business Environment Chapter 2 -


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