BUSI 1301 Ch. 1 – Flashcards
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The political-legal environment reflects the relationship between the business and
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Government
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A(n) ____ is a nation's basis for allocating its resources among its citizens.
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Economic system
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A ____ economy has characteristics of both planned and market economies.
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Mixed market
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The process of converting government enterprises into privately owned firms is called
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Privatization
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A ____ shows how many of a given product will be bought at different prices.
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Demand curve
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The price at which the quantity of goods demanded and the quantity of goods supplied are equal is referred to as
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The equilibrium price or the market price.
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____ exists when an industry has only a handful of sellers, most which are large.
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An oligopoly
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The ____ refers to the total value of all goods and services produced within a given period by a natural economy through domestic factors of production.
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Gross domestic product (GDP)
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A nation manages the collection and spending of its revenues through ____ policy.
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Fiscal
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A nation controls the size of its money supply through ____ policy.
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Monetary
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What are profits?
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Difference between revenues and expenses.
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The key difference between economic systems is the different ways which they manage.
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The factors of production
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Which of the following is NOT a factor of production?
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Government
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The two most basic forms of planned economies are
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Communism and socialism
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In a market economy, the factors of production are allocated by
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Producers and consumers
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Which economic system provides for the private ownership of the factors or production and encourages entrepreneurship by offering profits as an incentive?
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Capitalism
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In which economic system does the government own and operate select major industries?
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Socialism
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The term supply is best defined as
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The willingness and ability of producers
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The law of demand maintains that buyers will purchase more of a product as its price
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Drops
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"Producers will offer more of a product for sale as its price rises and less as its price drops." The situation being described refers to
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The law of supply
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Which of the following statements best captures the notion of private enterprise?
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Individuals pursue their own interests with minimal government restriction.
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Which of the following is NOT one o the elements required in private enterprise?
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Stability of cash flow
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U.S. agriculture is a good example of
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Perfect competition
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Which of the following best defines the term business cycle?
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The pattern of short-term ups and downs in an economy
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Which of the following best defines the term aggregate demand?
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The total quantity of goods and services produced by an economic system during a given period
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Which of the following best describes the term gross domestic product?
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Total value of all goods and services produced within a given period by a national economy through domestic factors of production.
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Which of the following best describes nominal GDP?
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Total value of all goods and services produced within a given period by a national economy through domestic factors of production measured in current dollars or with components valued at current prices.
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Which of the following best describes purchasing power parity?
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The principle that exchange rates are set so that prices of similar products in different countries are about the same
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Increases in an economic system's standard of living result primarily from increases in
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Productivity
