Business 110 Test 1(Chapters 1-3)

In the context of global trade, the _____ is a measurement of the value of one nation's currency relative to the currency of other nations.

exchange rate

When a business brings in less money than it needs to cover expenses, it incurs a _____.

loss.

Macroeconomics involves the study of:

the gross domestic product of a country.

In the context of mixed economies, which of the following statements is true of the U.S. federal government?

. It is part owner in a number of financial institutions.

_____ means buying products domestically that have been produced or grown in foreign nations.

Importing

_____ is a market structure with just a single producer completely dominating the industry.

Monopoly

_____ refers to the relationship between the goods and services that an economy generates and the resources needed to generate them.

Productivity

are limitations on the amount of specific products that one nation will sell to another nation.

Voluntary export restraints

non-profit organizations

account for more paid workers than the entire construction industry.

The term _____ refers to a market structure with many competitors selling differentiated products; the barriers to enter such a market structure are low.

monopolistic competition

Despite the U.S. economic crisis of 2008, research suggests that:

most budding entrepreneurs still plan to launch their firms in the next three years.

In the _____, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term ties

relationship era

In the context of a business environment, computers, telecommunications, and other digital tools are considered to be part of the _____.

technological environment

Identify a true statement about the Federal Reserve.

It manages the monetary policy of the United States

In the context of factors of production, which of the following is a natural resource?

Land

Which of the following is a characteristic of entrepreneurs?

They risk their time, money, and other resources to start and manage their business.

The _____ is an international cooperative of 188 member countries, working together to reduce poverty in the developing world.

World Bank

As life spans increase and birth rates decrease, the American population is rapidly aging. This may most likely lead to:

an increase in taxes as state and federal governments stretch to serve the aging population.

The Fed directly stimulates spending by:

buying government securities.

In _____, firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.

direct investment

A capitalist system depends on fair competition among businesses to:

drive higher quality and lower prices.

In a business cycle, the _____ is a period of robust economic growth and high employment.

expansion

In the context of the history of American business, during the _____, jobs became more specialized, increasing productivity and lowering costs and prices.

production era

The _____ was an $825 billion economic stimulus package, passed by Congress, designed to turn the economy by cutting taxes, building infrastructure, and investing in green energy.

American Recovery and Reinvestment Act

In the context of key economic considerations when entering a foreign market, which of the following is an example of the communication infrastructure in a country?

Cell phone coverage

In the context of the economic environment of business, which of the following will most likely increase the cost of doing business for everyone involved?

Ethical lapses

In the context of the social environment of business, which of the following statements is true of workers?

Firms encourage a great level of mutual respect between employees and employers through open communication

Which of the following strategies for reaching global markets is a specialized type of licensing?

Foreign franchising

In the context of the right to private property, identify a true statement about capitalist economy.

Individuals have the right to will property to family members

In the context of the history of American business, which of the following statements is true of the entrepreneurship era?

Industrial titans exploited workers and decimated the environment.

Which of the following is a difference between inflation and deflation?

Inflation is a period of rising average prices across an economy, whereas deflation is a period of falling average prices across the economy

The basic mission of the _____ is to promote global economic cooperation and stable growth.

International Monetary Fund

In the context of fiscal policy, which of the following actions by the government helps boost the economy in the long term?

Investing in public assets, such as a national renewable energy grid

In the context of factors of production, which of the following statements is true of capital?

It does not include money.

Which of the following statements is true of foreign outsourcing?

It drives down the cost of production.

Identify a true statement about exporting.

It represents an especially strong opportunity for small and mid-sized companies

_____ refers to Federal Reserve decisions that shape the economy by influencing interest rates and the supply of cash.

Monetary policy

In the context of the competitive environment of business, which of the following can be a key source of competitive advantage?

Speed-to-market

In the context of the history of American business, which of the following statements is true of the production era?

The assembly line became standard across major manufacturing industries.

Which of the following is a difference between the supply curve and the demand curve?

Unlike the supply curve, the demand curve for most goods and services slopes downward as it moves to the right.

In the fiscal year 2015-2016, Nescarto, an African country, imported goods worth $18 million and exported goods worth $20 million. It also borrowed $40 million from other countries. In this scenario, Nescarto had a _____ during 2015-2016

balance of payments surplus

In the context of monetary policy, when the economy is weak, the Fed

buys government securities on the open market

A(n) _____ refers to a group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations

common market

Companies typically engage in _____ to meet the needs of customers that don't have access to hard currency or credit.

countertrade

In the context of planned economies, countries that adopted communism in 1900s developed:

crippling shortages and surpluses.

In the context of the global environment of business, the migration of jobs from the United States relates closely to the global movement toward _____, which is an international economic and political movement designed to help goods and services flow more easily across international boundaries

free trade

Compared to the United States, China and India have:

higher gross domestic product growth rates

Microeconomics focuses on:

individual businesses.

Real gross domestic product (GDP) measures the total value of final goods and services produced within a nation's physical boundaries over a given period of time, adjusted for:

inflation

In the context of the workforce advantage in the business environment, finding and holding the best talent will likely become a crucial competitive issue in the next decade as the baby boom generation begins to retire. However, job market contraction may not be an issue, because:

many baby boomers opt to postpone retirement in the face of inadequate financial resources.

In the context of foreign direct investment, a _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit.

partnership

Trade restrictions were created to

protect domestic industry.

The arguments for and against trade restrictions are called

protectionism

In the context of the relationship era, leading-edge firms believe that:

satisfied customers can promote their business with more speed than promotional campaigns.

In the context of barriers to international trade, _____ include differences among countries in language, attitudes, and values.

sociocultural differences

In the context of the business environment, the creation of the World Wide Web is considered a component of the _____.

technological environment

Despite having a small population and severely limited natural resources, Hong Kong has consistently ranked among the richest regions in Asia. The prime reason behind this is:

the active encouragement of entrepreneurship by the government

In the context of monetary policy, if the Fed decreases the reserve requirement, _____.

there will be more loans available

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because:

they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers

The term _____ refers to the shortfall that occurs when the total value of a nation's imports is higher than the total value of its exports.

trade deficit