BUS V30 - Quiz #1: Understanding Economics Systems and Business

The _____ represents the prices of a market basket of goods and services as measured monthly by the Department of Labor. A. consumer price index (CPI) B. GDP index C. inflation rate D. producer price index (PPI)

A. consumer price index (CPI)

The situation in which the average of all prices of products is rising is called: A. inflation B. rejuvenation C. upsizing D. deflation

A. inflation

Thom Nielssen owns 500 acres of woodland. His forest is an example of which factor of production? A. natural resources B. capital C. labor D. entrepreneurship

A. natural resources

An economic system based on complete freedom of trade and little, if any, government control is known as: A. socialism B. capitalism C. privatization D. democratic economy

B. capitalism

The _____ prints money and controls its circulation. A. Savings and Loan Association B. U.S. Treasury Department C. Federal Reserve System D. FDIC

C. Federal Reserve System

Upward and downward changes in aggregate economic activity, as measured by GDP, are called: A. economic yields B. cyclical adjustments C. business cycles D. business standards

C. business cycles

_____ is the amount of money remaining from a firm's sales revenue after it deducts production costs, interest costs, and taxes. A. Expenses B. Working capital C. A dividend D. Profit

D. Profit

When demand and supply meet, the price of the product or service is established. This is the point of: A. price intersection B. interaction C. price stabilization D. equilibrium

D. equilibrium

A(n)_____ occurs if a country's total expenditures are higher than the revenues received from the taxes it gathers. A. national priority deficit B. national surplus C. annual expenditure surplus D. federal budget deficit

D. federal budget deficit

Fiscal policy is concerned with: A. investments and insurance B. credit and banking C. banking and insurance D. taxation and spending

D. taxation and spending