Business Final Chapter 1
Gross domestic product (GDP) refers to the total value of goods and services produced by a national economy within a given period, regardless of where the factors of production are located.
false, GDP refers to the total value of all goods and services produced within a given period by a national economy through domestic factors of production.
Inflation results in increased purchasing power for the consumer.
false, Inflation occurs when the amount of money injected into an economy exceeds the increase in actual output. When this happens, people will have more money to spend, but there will still be the same quantity of products available for them to buy. As they compete to buy available products, prices go up.
The technological environment includes only electronics and telecommunications used to perform business activities.
false, Technology includes human knowledge, work methods, physical equipment, electronics and telecommunications, and various processing systems that are used to perform business activities.
The United States government manages the collection and spending of its revenues through monetary policy.
false, The United States government manages the collection and spending of its revenues through fiscal policy.
One of the four elements that are necessary for private enterprise to be carried out is reasonable prices.
false, The four elements that must be present in private enterprise are private property rights, freedom of choice, profits, and competition.
Some ethical and unethical behaviors fall into gray areas, while others are widely agreed upon.
true, An example is the situation where an activity may be seen as unethical by some people but as a smart business practice by other people.
Accepting and offering bribes is a normal part of doing business in some parts of the world.
true, In many countries, accepting and offering bribes is a normal part of doing business.
Economic indicators help to assess the performance of an economy.
true, Specifically, economic growth is measured via aggregate output, standard of living, gross domestic product, and productivity; stability is reflected through levels of inflation and unemployment.
Tax increases and decreases are a form of fiscal policy.
true, Tax rates can play an important role in fiscal policies, helping to manage the economy.
The government can influence the availability of capital by working through the Federal Reserve System.
true, The interest rates set by the Federal Reserve System can influence the ability and willingness of banks throughout the country to lend money.
The pursuit of profits is how a business differs from organizations such as most universities, hospitals, and government agencies.
true, The pursuit of profits distinguishes a business from those organizations-such as most universities, hospitals, and government agencies-that run in much the same way but that generally don't seek profits.
The point at which the supply curve and the demand curve intersect is the market price.
true, When demand and supply curves are plotted on the same graph, the point at which they intersect is the point at which demand matches supply, which determines the market price.
