Econ Pre-test

A sequence of interrelated activities that are followed to achieve business goals are known as

business processes.

A government often changes its fiscal policy in response to a(n)

economic problem.

A focus on how things are done, rather than just outcomes, is known as

process orientation.

As a management trainee in a large business, Ron spends three weeks working in each of the various departments. This is an example of job

rotation.

To change fiscal policy, governments need to evaluate their taxation rates and

spending practices.

What situation usually occurs when monetary policies are implemented to decrease the money supply?

It is more difficult to obtain credit.

Rechargeable batteries are an example of what type of innovation?

Product

What occurs when the prices of products increase faster than consumers' wages?

The value of the dollar decreases.

Why are business processes needed

To expedite workflow

Which of the following quality-control methods improves quality by saving time and allowing potential problems to be caught earlier in the product design and development process:

Concurrent engineering

Which of the following would provide you with information about the health of the U.S. economy:

Gross domestic product

Why is quality important to businesses?

Increased profit

What should employees have in order to find new ways to deal with unique situations in the workplace?

Innovation skills

Which of the following is a characteristic of taxes:

Levied by governments

Major Company hired a fifth employee and production increased by 1,000 units per week, so it hired a sixth employee and production increased by an additional 900 units per week. What should the company expect to happen if it continues to hire more employees and does nothing to the work environment?

Production per employee will decrease.

Why do some governments set very high taxes on certain products?

To limit the sale of those items

The main goal of inflation targeting is

price stability.

The value of a currency in a floating exchange-rate system is determined by

supply and demand.

Which of the following is the best reason for studying economics:

To prepare for effective decision-making and responsible citizenship

Decision matrices tend to be most useful for __________ decisions.

complex

Mass production increases productivity because it reduces

wasted resources.

Which of the following is an indication that a country's economy is slowing down and heading toward a recession:

Increased unemployment rate

What often happens to businesses when interest rates rise?

Output decreases.

Eric goes to the bank for a loan for his small business. He has had three businesses in 10 years--the first two failed. Joan also goes to the bank for a loan for her small business, which has been open for 10 years and has had steady success. The banker would probably decide to charge __________ a __________ interest rate.

Eric; higher

Which of the following is a risk associated with international business:

Fluctuating currencies

How does economic growth decrease unemployment?

It creates jobs.

Which of the following factors is most likely to cause a country's currency value to fall:

Rapid inflation

Which of the following is an example of a change in the relative price ratio when the original price of red apples is $0.60 per pound and the original price of green apples is $0.80 per pound:

Red apples @ $0.90 per pound; green apples @ $0.80 per pound

Who gets the goods and services produced in a market economy?

Whoever is willing and able to pay the price

All of the ups and downs in the activity of an economy are called

business cycles.

A high rate of unemployment usually has a negative impact on a country's

gross domestic product.

During the peak phase of a business cycle, a business could be expected to have

high prices.

The difference between total revenue and total cost equals

profit.

A management strategy used to exert pressure on the union by stopping production is called a(n)

lockout.

Which of the following statements about continuous improvement is NOT true:

Each organizational level and department should work independently in the continuous improvement process.

Shelley has a $25 gift certificate and is having difficulty making a choice between a sweater and a pair of earrings. If she chooses the sweater, what is the opportunity cost of this decision?

Earrings

What often happens to an economy during a mildly inflationary period?

Increased growth

In Hispanic households, extended family members (such as grandparents) often live together with parents and young children in one home. Which of the following is an example of how this culture's family unit size affects the goods and services available in the local grocery store:

Larger containers of laundry detergent are available.

How do increases in the amount the government spends on transfer payments, such as Social Security and welfare, impact business production?

People have more money to spend, and production increases.

Melanie's country is experiencing an economic recession. What is the best thing for her to do to help the economy expand?

Spend her money

Why are unions a powerful force in business?

They increase the bargaining power of workers.

The BLT Company is based in the U.S. and sets up a business relationship with India's PPY Company to gain market knowledge and contacts. This is known as

a joint venture.

Societies must decide how to allocate their scarce resources between the production of

capital and consumer goods.

An increase in Australia's economic output will increase its

competitive edge.

Product prices in our free enterprise economy are determined by the interaction of

demand and supply.

The city increases its sales tax from 6% to 6 ½%. This is an example of a change in

fiscal policy.

The local Boys and Girls Club recently received a $1,000 donation. The club director identified and prioritized four possible ways to spend the money. The four options (listed in the order of their importance, starting with the most important and ending with the least important) are: (1) repair and update playground, (2) purchase new computers, (3) paint the building, and (4) upgrade the quality of snacks served. If the club director decides to repair and update the playground, the opportunity cost of that decision is giving up

new computers.

A telemarketing company pays each of its employees based on the number of phone numbers dialed each day. The employees soon discover that faster calls lead to a higher paycheck, so they talk quickly and don't bother answering consumers' questions. This results in lower sales for the company. This is an example of a(n) __________ incentive.

perverse

When the economy is in a recession, most businesses respond by

reducing production.

The number of tasks involved in a job and the frequency with which they occur is known as job

scope.