Business

Arm and Hammer baking soda, which was originally developed as a cooking ingredient, is now being sold as an effective refrigerator deodorizer. This is an example of ____________ innovation. A. positioning B. process C. distributed D. associative

A

During the peak phase of a business cycle, a business could be expected to have A. high prices. B. reduced sales. C. low profits. D. staff reductions.

A

Higher prices that result from a tax on luxury goods are likely to result in A. fewer customers and less productivity. B. more customers and more productivity. C. fewer customers and more productivity. D. more customers and less productivity.

A

Which of the following factors affects consumers' decisions to buy goods or services: A. Buying power B. Competition C. Labor costs D. Production costs

A

Which of the following is an example of paradigm innovation: A. Windows computer operating system B. Energy-saving light bulbs C. The latest model of the Honda Civic D. Rechargeable batteries

A

Why are human resources limited? A. Some people are unable to work. B. New equipment is expensive. C. Countries lack needed technology. D. World population continues to grow.

A

A U.S. company begins selling its products in France. Despite brisk sales, the company doesn't make enough profit to cover its expenses. When setting prices, the company simply used the same prices in both countries. For example, $5.99 = 5.99 French francs; $2.89 = 2.89 French francs. What risk of international business did the company not consider? A. Language variations B. Currency fluctuations C. Differences in laws D. Opportunity costs

B

A country's standard of living can be calculated by dividing the goods and services its people have by A. social services. B. population. C. output. D. total production.

B

As the gross domestic product increases, it is easier for all levels of government to A. maintain trade deficits. B. carry out their functions. C. reduce their spending. D. conserve natural resources.

B

During which phase of the business cycle would there most likely be shortages of workers in certain skill areas? A. Expansion B. Peak C. Trough D. Contraction

B

How do spending levels impact the economy in an inflationary period? A. Overall spending generally remains unchanged. B. Consumers and businesses spend less. C. Consumers spend less, but businesses tend to spend more. D. Consumers keep spending no matter what; businesses are more cautious

B

The use of thorough job orientation helps to increase productivity through A. mass production. B. participative decision making. C. training and education. D. quality of work life.

C

Which of the following would policy makers monitor to understand personal consumption expenditures (PCEs): A. S&P 500 Stock Index B. Consumer Price Index (CPI) C. Retail sales D. Real Gross Domestic Product (GDP

C

If a government wants to decrease economic growth, it would use a contractionary fiscal policy that might involve A. increasing government spending. B. increasing taxes. C. decreasing regulations. D. decreasing unemployment.

B

Which of the following government actions is most likely to stimulate the economy: A. Raising the prime interest rate B. Lowering tax rates C. Printing less money D. Borrowing more money

B

Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks: A. Excess demand B. Relative price C. Inflated price D. Incentives

B

The formula that is generally used to measure productivity is A. goods divided by time. B. labor divided by resources. C. outputs divided by inputs. D. inputs divided by labor.

C

What type of government policy involves raising or lowering taxes, and increasing or decreasing government spending? A. Disciplinary B. Monetary C. Fiscal D. Social

C

When a nation's inflation rate is low, prices tend to A. increase dramatically. B. remain stable. C. fluctuate daily. D. reduce currency values

B

When consumer spending is high, the economy usually is in a(n) A. depression. B. growth stage. C. inflationary period. D. recession.

B

When customers buy the exact amount of goods that producers are selling at a specific price, the __________ price exists. A. market B. equilibrium C. unit D. production

B

When union members of Local 654 arrived at work today, they found a sign on the door stating that the business had closed temporarily and the employees were not allowed to work. This is a pressure strategy known as a(n) A. injunction. B. lockout. C. boycott. D. strike vote.

B

Which of the following actions would the Federal Reserve System take to expand monetary policy: A. Raise the Federal Discount Rate B. Buy securities on the open market C. Increase Reserve Requirements D. Open additional financial institutions

B

A country's easy monetary policy is often used to correct the problem of A. globalization. B. high taxes. C. unemployment. D. import quotas.

C

Which of the following is an example of a change in culture affecting the production of a good or service: A. A shortage of chocolate chips causes a cookie company to stop production. B. Laws banning smoking in restaurants result in a decrease in demand for cigarettes. C. An oil spill in the ocean causes local seafood restaurants to lose business. D. The "green movement" leads to an increase in demand for recycled products.

D

When changes in a product's price cause corresponding changes in consumer demand, the product has A. elastic demand. B. usefulness. C. utility. D. inelastic demand

A

When consumer spending and consumption decrease, consumer confidence tends to A. fall. B. rise. C. remain the same. D. be unpredictable.

A

When consumers' purchasing power decreases, the economy will experience a period of A. contraction. B. expansion. C. containment. D. emergence.

A

Which of the following does consumption rely on to provide goods and services: A. Producers B. Consumers C. Owners D. Deciders

A

What is the ratio of a pound of yellow squash @ $ .40 a pound and a pound of butternut squash @ $1.20 a pound? A. 1 to 4 B. 1 to 3 C. 1 to 2 D. 1 to 1

B

When a business cycle is affected by international relations, new discoveries, and social or political changes, it is said to have been changed by __________ factors. A. extraneous B. external C. internal D. intrinsic

B

Which of the following is a negative economic incentive: A. Tax reductions on fuel-efficient cars B. High taxes on cigarettes C. A 1% decrease in city taxes for residents who recycle D. Free flu shots for all citizens

B

Which of the following represents a good time for a country's government to use its fiscal policy to increase taxes: A. While the economy is expanding B. When a recession lasts too long C. When inflation is too high D. While the economy is contracting

C

Which of the following statements is true regarding a nation's unemployment rates: A. Globalization does not usually have a major effect on a nation's unemployment rates. B. A nation's business cycles do not usually impact the country's unemployment rates. C. A nation always has a certain percentage of unemployed citizens at any given time. D. During times of great expansion, a nation's workers are generally underemployed.

C

In which of the following occupations would employees be organized into craft/trade unions: A. Hotel employee B. Restaurant worker C. Salesperson D. Plumber

D

One of the main functions of a country's monetary policy is to A. monitor government spending. B. supervise the banking system. C. issue new currency. D. regulate the economy.

D

The amount of a product that is produced is most directly affected by A. labor unions. B. product utility. C. product value. D. consumer demand

D

What often happens when a nation has a high unemployment rate? A. The gross domestic product increases. B. The consumer price index decreases. C. The nation experiences an economic slowdown. D. The stock market remains unaffected.

C

The category of GDP called gross private domestic investment includes A. all purchases of capital goods. B. all exports of goods and services. C. purchases made by private individuals. D. inventories held over from previous years.

A

To reduce the chance of investigations and orders to cease production, businesses should A. adhere to government regulations. B. specialize. C. purchase the most up-to-date technology available. D. lobby members of Congress.

A

A government's fiscal policies that are intended to encourage economic growth are known as __________ policies. A. appropriate B. complementary C. expansionary

C

Which of the following actions would government take to increase economic growth: A. Decrease exports B. Increase taxes C. Increase government spending D. Decrease government subsidies

C

Which of the following is an economic activity: A. Following the stock market B. Reading a bank statement C. Balancing a checkbook D. Purchasing a candy bar

D

What is likely to occur when the inflation rate increases, and workers do not receive pay increases? A. Lower standard of living B. Higher consumer demand C. Decreased unemployment D. Increased spending

A

What usually results when interest rates continue to increase? A. Spending decreases. B. Production increases. C. Purchasing power increases. D. Unemployment decreases.

A

Interest rates rising and falling by a wide range on a regular basis often are an indication of A. seasonal unemployment. B. economic instability. C. flexible capital. D. price equilibrium.

B

A country is experiencing civil unrest. What is likely to happen to the value of its currency? A. It will stabilize. B. It will increase. C. It will decrease. D. It will not be affected.

C

The gross domestic product (GDP) is calculated each year in the United States to determine A. the level of exports. B. the health of the economy. C. whether income taxes should be lowered or raised. D. how much money should be printed during the year.

B

The highest level of labor union organization is the A. state. B. federation. C. national. D. local.

B

What is a likely result when workers' wages rise throughout the economy while productivity decreases? A. Lower prices B. Inflation C. Prosperity D. Increased sales

B

Which of the following is an example of excess supply: A. Price = $500, demand = 500, supply = 300 B. Price = $700, demand = 300, supply = 500 C. Price = $600, demand = 400, supply = 400 D. Price = $400, demand = 600, supply = 200

B

A couple constructs a decision matrix to select which charity will receive a $500 donation. Since "helping children" is the most important criteria to the couple, which of the following weights should it be assigned? A. .325 B. .25 C. .60 D. .100

C

The government uses some of the tax money it collects from individuals and businesses to support public welfare programs. What is the benefit of these welfare programs to businesses in a private enterprise economy? A. Recipients don't have to work. B. Businesses must budget more money for taxes. C. Funds received by recipients are spent in businesses. D. Government has control of how the recipients spend their money.

C

The young children's section of a U.S. amusement park features cartoon characters from a German TV show. Although the amusement park signed an agreement and paid a fee to display images of the cartoon characters, the TV show doesn't own or manage the park in any way. This is an example of A. a strategic alliance. B. franchising. C. licensing. D. exporting.

C

When producers are hopeful about the economic business outlook, they often A. decrease their inventory levels. B. decrease their purchase of new goods. C. increase their investment in capital goods. D. increase their investment in savings.

C

What is one reason why the overall unemployment rate understates the actual employment situation? A. The rate reflects regional differences. B. The rate is not seasonally adjusted. C. Underemployed people are listed. D. Discouraged workers are not included.

D

Which of the following is true when a potato farmer keeps some of the farm's potatoes for personal use: A. The potatoes must be reported in the gross domestic product. B. The farmer is engaging in an illegal activity. C. The farmer is not producing salable goods. D. The potatoes are not counted in the gross domestic product.

D

Why does the Federal Reserve System raise interest rates? A. To overcome inequalities of income distribution B. To increase demand for products C. To decrease supply of products D. To fight inflation

D

Why are resources considered limited? A. Entrepreneurs do not invest enough of them. B. There are not enough available so that everyone can have as much of them as desired. C. Everyone has them, and they change. D. There are so many that people must decide which ones to choose at any one time.

B

Which of the following is a true statement about currency exchange rates: A. The value of a nation's currency increases when it experiences rapid inflation. B. World events do not usually impact currency exchange rates. C. Currency exchange rates change frequently. D. When the demand for a nation's currency increases, its currency's value decreases.

C

The market's way of rationing limited resources, goods, and services to consumers in a market economy is through A. commissions. B. profits. C. incentives. D. prices.

D

What usually decreases as the rate of inflation increases? A. Money supply B. Interest rates C. Export quotas D. Purchasing power

D

Why might businesses decide to hold on to products to sell later when the economy is experiencing high levels of inflation? A. Taxes will limit production. B. Prices will continue to rise. C. Cash will be in short supply. D. Income will remain constant.

B

Which of the following might cause supply of a good to decrease: A. Advertising B. Sales skills C. Inelastic demand D. Government regulations

D

One way for a business to increase productivity is to increase its A. imports. B. environmental concern. C. prices. D. research and development.

d

A group of entrepreneurs is trying to decide which of five new product ideas to select. Which tool can be used to help make the decision? A. Decision matrix B. Entrepreneurial discovery process C. Business processes D. Opportunity cost analysis

a

Vernon was the milkman in his neighborhood for 30 years. Then, supermarkets started selling milk right in the store, and Vernon's job became obsolete. Vernon is a victim of ___________ unemployment. A. seasonal B. structural C. frictional D. cyclical

B

Mary is a bagger at Glen's Market. On a weekly average, she works 30 hours and fills 876 bags of groceries. Her productivity is ___________ bags of groceries per hour. A. 29.2 B. 26.2 C. 28.6 D. 22.8

A

The U.S. government is offering a decrease in taxes to citizens who install solar panels on their homes. Using economic terms, how would you describe this incentive? A. Financial and positive B. Non-financial and positive C. Non-financial and negative D. Financial and perverse

A

The best time for a business to purchase new equipment is when A. interest rates are low. B. consumer demand decreases. C. job growth declines. D. the gross domestic product falls.

A

To stimulate the economy, the government is likely to A. increase spending. B. restrict trade. C. raise prices. D. decrease expenses.

A

If interest rates go down, which of the following would most likely occur: A. Banks will pay more to borrow money. B. The stock market will go up. C. Consumers will spend less. D. U.S. exports will decrease.

B

If three employees each work 35 hours a week and produce a total of 9,765 items, what is their total hourly productivity level? A. 31 B. 93 C. 67 D. 105

B

In some states, it is against the law to sell alcohol on Sundays. This law was created to honor the Christian religious belief that Sunday is a special day of rest. This is an example of culture impacting the __________ of goods. A. production B. distribution C. pricing D. packaging

B

John only had $40 to spend and couldn't decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision? A. $40 B. New pair of jeans C. Trip to amusement park D. No opportunity cost was involved.

B

Why should productivity be measured? A. To find new ways to meet customer needs B. To see whether the business's objectives are being met C. To determine the best ways to invest company profits D. To locate new sources of inputs

B

___ What is the effect on society of a falling growth rate in productivity? A. Resources are used more efficiently. B. The standard of living drops. C. Inflation is prevented. D. Increased labor disputes may occur.

B

A six-month decline in GDP is known as a A. depression. B. productivity increase. C. recession. D. trade deficit.

C

Justin is trying to decide whether he wants to spend a $50 birthday check on a new DVD player or tickets to a concert. If he chooses the DVD player, what is the opportunity cost of this decision? A. Birthday check B. DVD player C. Concert tickets D. $50

C

Sam has been invited to go to the movies with one friend and to Dairy Queen for ice cream with another friend. Because he has only $5.00, Sam can't do both. If he decides to go the movies, the opportunity cost of his choice is A. staying at home. B. both the ice cream and the movie. C. ice cream at Dairy Queen. D. the movie.

C

When management and union leaders negotiate but cannot reach an agreement, either one may call for a(n) A. grievance. B. injunction. C. arbitrator. D. probation.

C

A large number of underemployed workers indicates that there is a problem in the economy because underemployment means that A. seasonal employees work only part of the year. B. many people have stopped looking for work. C. some workers are taking time off between jobs. D. there are not enough jobs for qualified people.

D

Dividing the dollar value of total sales by the cost of making those sales is one way that businesses often measure their A. accountability. B. profitability. C. liability. D. productivity.

D

How long do most business cycles last? A. Two full years B. Two consecutive quarters C. At least 10 years D. Varying lengths of time

D

The value of a country's currency declines when it implements policies that restrict trade. The primary factor affecting the change in value of the currency in this situation is A. cultural differences. B. civil unrest. C. demographics. D. isolationism.

D

What do businesses usually expect will increase when the economy experiences a continued rise in the level of inflation? A. Consumer spending B. Employment levels C. Industry growth D. Interest rates

D

What kind of strike occurs when the members of a union local stop work without the consent of their national organization? A. Sympathetic B. Limited C. Jurisdictional D. Wildcat

D

Which of the following is characteristic of a buyer's market: A. High demand B. Steady demand C. Low supply D. Low prices

D