question

True or False: Things that are required in order to live are known as wants.

answer

False

question

True or False: Goods and services are purchased by businesses as well as by individuals

answer

True

question

True or False: Buildings, equipment, and supplies are examples of natural resources.

answer

False

question

True or False: All economic resources have a limited supply

answer

True

question

True or False: The basic economic problem results from not having enough resources to satisfy every need

answer

Tue

question

True or False: The final step in the decision-making process is to select the best choice from among the alternatives.

answer

False

question

True or False: Although all nations differ in the type and amount of economic resources they have, they all have the same economic needs

answer

False

question

True or False: Communism refers to the private ownership of resources by individuals, rather than by the government

answer

False

question

True or False: A person who buys and uses goods and services is called a consumer

answer

True

question

True or False: Generally, a lack of competition will result in lower prices for goods and services

answer

False

question

True or False: Economic growth refers to a steady increase in the production of goods and services in an economic system

answer

True

question

True or False: One component of gross domestic product is the value of a country's exports plus the value of the imports into the country

answer

False

question

True or False: The more goods and services produced, the healthier an economy is considered to be

answer

True

question

True or False: Molly is a 14-year old student. She would not be considered a part of the labor force in the US

answer

True

question

True or False: In the US, all people over the age of 21 who do not have a full-time, paying job are considered "unemployed"

answer

False

question

True or False: An ability to produce more goods and services makes it possible to reduce the number of hours in a workweek

answer

True

question

True or False: Stan receives a monthly social security check from the US government. This would not be counted when measuring Stan's personal income.

answer

False

question

True or False: Business cycles are the recurring ups and does of gross national product

answer

False

question

True or False: During periods of deflation, prices drop so demand increases greatly

answer

False

question

True or False: The money for capital projects comes from two main sources: stock investments and bonds

answer

False

question

True or False: Most business activities occur within a country's own borders

answer

True

question

True or False: A country can have an absolute advantage in only one area

answer

False

question

True or False: Without foreign trade, all of the items you buy would cost less, because they would not need to be shipped here from other lands

answer

False

question

True or False: A nation with a trade surplus is said to have a favorable trade position

answer

True

question

True or False: It is possible for the US to have a trade surplus with one country and a trade deficit with another

answer

True

question

True or False: Some countries limit the amount of money their citizens can take out of the country when they travel

answer

True

question

True or False: Because of international trade, all nations of the world use the same banking system

answer

False

question

True or False: When a country has a favorable balance of payments, the value of its currency is usually constantly rising

answer

True

question

True or False: Countries that devote most of their economies to agriculture usually provide more and better goods and services for their citizens

answer

False

question

True or False: A joint venture is an agreement between two or more countries to remove duties and trade barriers on products traded among them

answer

False

question

What is an example of an economic need?

answer

Water

question

What are things you can see and touch?

answer

Goods

question

What country is the largest producer of goods and services in the world?

answer

US

question

People producing goods and services are called _________

answer

Human resources

question

If everybody had an unlimited supply of economic resources, what would not exist?

answer

Scarcity

question

Jonah had $25 to spend. He decided to buy a new shirt instead of going to the park with his friends. Jonah has

answer

made an economic trade-off

question

What is the first step in the decision making process?

answer

Define the problem

question

What is the final step of the decision making process?

answer

Review your decision

question

In every nation on Earth,

answer

people must deal with the problem of scarcity

question

All nations must decide

answer

all of the above

question

The government of Erewhon owns and controls all economic resources. This is a type of _______________.

answer

Command economy

question

Who owns the economic resources in a market economy?

answer

the people of the country

question

Which type of economy is usually centered mainly on meeting people's basic needs?

answer

traditional economy

question

Another name for the economic system in the US is

answer

all of the above

question

Which of the following is NOT an especially important principle of the US economic system?

answer

tradition

question

In the US, you can own anything you want and decide what you want to do with it, as long as it does not violate the law. This describes the principle of

answer

the right of private property

question

The rivalry among businesses to sell their goods and services is known

answer

competition

question

Generally, as the price of a product increases

answer

businesses will be willing to supply larger quantities of the product

question

Which of the following scenarios will probably cause prices to drop?

answer

Many companies begin producing a product in relatively high demand

question

Which of the following is probably a competitor to Mary's CD Shop?

answer

B Flat Records and Tapes

question

GDP measures a country's economic output during

answer

one year

question

GDP does not include

answer

the value of the work you do for yourself

question

Which of these items would be counted when measuring GDP

answer

a fully assembled washing machine

question

Dividing GDP by the total population of a country results in that country's

answer

GDP per capita

question

All of the following people are part of the labor force EXCEPT

answer

Lindsay, a stay at home mom with two children

question

If wages increase faster than gains in productivity, prices will rise. Why?

answer

Because the cost of producing goods increases

question

In the early 1890s, the average employee in the US worked about how many hours per week

answer

60

question

Which of the following probably would result in a DECREASE in worker productivity?

answer

A company pays for raises for top management by laying off 60 percent of its employees

question

Retail sales

answer

indicate general consumer spending patterns in the economy

question

At the peak of the business cycles is

answer

Prosperity

question

Which of the following is NOT a characteristic of a depression?

answer

a high demand for goods and services

question

If GDP growth slows for at least _____ quarters in a calendar year, the economy is probably in a recession

answer

2

question

A recession often affects some groups of workers in related businesses. The drop in related businesses is called

answer

the ripple effect

question

Inflation

answer

is most harmful to people living on fixed incomes

question

Suppose wages are going up faster than prices. What is the most likely effect?

answer

Unemployment will worsen because businesses will tend to hire fewer workers.

question

The interest rate banks charge their best businesses customers is the

answer

prime rate

question

The major influence on the level of interest rates is

answer

the supply and demand for money

question

Which of the following is an example of a capital project?

answer

A small business purchases two new pickup trucks

question

If you purchase a corporate or government bond, you are a

answer

creditor

question

The money people deposit in banks and other financial institutions

answer

is lent to businesses to fund capital projects

question

The making, buying, and selling of goods and services within a country is called

answer

domestic business

question

The US conducts trade with over ___ countries

answer

180

question

Which of the following countries has an absolute advantage in coffee production?

answer

Brazil

question

Goods and services sold to other countries are called

answer

exports

question

About how many US jobs depend on international business

answer

1 out of 6

question

The difference between a country's total exports and total imports is called the

answer

balance of trade

question

The difference between the amount of money that comes into a country and the amount that goes out of it is called the

answer

balance of payments

question

Which of the following scenarios is likely to cause the value of a country's currency to rise

answer

increased demand for the nation's products and currency

question

Which of the following is NOT a cultural/social factor that affects international business?

answer

climate

question

The key effects on a country's level of economic development are

answer

literacy level, technology, and agricultural dependency

question

A tax that a government places on certain imported products is called a

answer

tariff

question

A limit that a government places on the quantity of a product that may be exported or imported during a given period is called a

answer

quota

question

What is a free-trade zone?

answer

A selected area which products can be imported duty-free and then stored, assembled, or used in manufacturing

question

Common market members

answer

have a common external duty on products being imported from nonmember countries

question

A country in which an MNC places business activities is called

answer

host economy

question

Selling the right to use some intangible property for a free or royalty is called

answer

licensing

question

Which of the following is NOT a goal of the World Trade Organization

answer

strengthening import quotas

question

Licensing

answer

has a low financial investment, so the potential financial return is often low

question

This international trade organization was created in 1944 to provide loans for rebuilding after WWII

answer

World Bank

Chapter 1-3 Business – Flashcards

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