Management 1: Chapter 2 Quiz

Economics is the study of how a society _________________.
a. employs statistical techniques to make predictions about the evolution of society over the long run
b. employs resources to produce goods and services and distribute them among competing groups and individuals
c. governs itself for the good of its citizens
d. invests wisely in the stock market

Economist Thomas Malthus believed that ______________ would limit economic progress.
a. overpopulation
b. the tendency of governments to levy high tax rates
c. the inability of workers in developed nations to compete against cheap foreign labor
d. depletion of gold reserves

Under capitalism:
a. Utilities, health care, education, and other important services are operated by the government.
b. Most of the means of production and distribution are privately owned and operated for profit.
c. Markets operate to carry out the decisions made by central planners.
d. The primary function of the government is to distribute wealth more evenly.

__________ exists when the entire supply of a good is controlled by a single seller.
a. oligopoly
b. perfect competition
c. monopoly
d. pure capitalism

A major premise of a socialist system is:
a. To make sure that those that create wealth are allowed to keep that wealth.
b. To create incentives to encourage entrepreneurs to create jobs and economic growth.
c. To keep tax rates extremely low so that businesses do not need to support government projects.
d. To reduce the inequality in the distribution of wealth.

The economic and political system in which the government owns almost all the major factors of production is called:
a. ethnocentrism
b. communism
c. socialism
d. capitalism

The total value of final goods and services produced within a nation’s borders in a given year is known as that nation’s:
a. aggregate production quota
b. aggregate domestic output
c. index of aggregate economic output
d. gross domestic product

__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.
a. seasonal
b. structural
c. frictional
d. cyclical

_____________ refers to a general rise in the price level of goods and services over time.
a. recession
b. acceleration
c. inflation
d. escalation

When the federal government’s collection of tax revenues is less than what it spends in a given year, it results in a:
a. Federal Reserve Allowance
b. National Deficit
c. GDP Deflator
d. Balance of payments deficit