BUSN 1003 Exam 1 UPDATED ACTUAL
Questions and CORRECT Answers
The _____ represents the prices of a market basket of goods and services as measured
monthly by the Department of Labor. - CORRECT ANSWER- ✔✔consumer price index
(CPI)
The laborers displaced due to assembly line automation at the textile plant may not have the
skills needed to operate the computerized machines that replaced them. This is an example of
_____ unemployment. - CORRECT ANSWER- ✔✔structural
Which of the following countries has a high standard of living? - CORRECT ANSWER-
✔✔the United States
The government does not consider full employment to mean 100 percent of its citizens are
employed because: - CORRECT ANSWER- ✔✔all of the above conditions can add and do
exist
RATIONALE:
Market equilibrium is: - CORRECT ANSWER- ✔✔the point at which quantity supplied
equals quantity demanded
Which of the following is an example of a business? - CORRECT ANSWER- ✔✔all of the
above (business)
An industry in which a few firms produce most or all of the output of a product and in which
large amounts of capital are needed is called a(n): - CORRECT ANSWER- ✔✔oligopoly
In a(n) _____, a few sellers can exert substantial control over prices. - CORRECT ANSWER-
✔✔oligopoly
The situation in which the average of all prices of products is rising is called: - CORRECT
ANSWER- ✔✔inflation
,The quantity of a product or service that businesses will make available at various prices is
called: - CORRECT ANSWER- ✔✔supply
Fiscal policy is concerned with: - CORRECT ANSWER- ✔✔taxation and spending
A decline in real GDP that lasts for two consecutive quarters is called a(n): - CORRECT
ANSWER- ✔✔recession
_____ is the amount of money remaining from a firm's sales revenue after it deducts
production costs, interest costs, and taxes. - CORRECT ANSWER- ✔✔profit
The slope of the demand curve is: - CORRECT ANSWER- ✔✔downward and to the right
A market in which there are a large number of firms that differentiate their products is called:
- CORRECT ANSWER- ✔✔monopolistic competetition
The standard of living in any country is: - CORRECT ANSWER- ✔✔measured by the output
of goods and services people can buy with the money they have
In a _____, the factors of production are owned collectively rather than individually, and no
incentives to work harder or to produce quality products are provided. - CORRECT
ANSWER- ✔✔communist economic system
When the government raises taxes on consumers and businesses, it is dealing with _____
policy. - CORRECT ANSWER- ✔✔fiscal
What is the primary difference between a good and a service? - CORRECT ANSWER- ✔✔a
good is tangible, a service is intangible
_____ refers to a government's programs for controlling the amount of money in circulation. -
CORRECT ANSWER- ✔✔monetary policy
, In Canada, the government owns the communications, transportation, and utilities industries,
while most other activity is carried on by private enterprise. Canada is an example of: -
CORRECT ANSWER- ✔✔a mixed economy
Jarvis Washington recently quit his job as a veterinarian's assistant and is now trying to find a
job with another veterinarian. This is an example of _____ unemployment. - CORRECT
ANSWER- ✔✔frictional
RATIONALE:
The economic system under which basic industries are operated by the government or owned
by the private sector under strong government control is called: - CORRECT ANSWER-
✔✔socialism
Iris Souza started the summer with $30. She took $10 and made signs for her dog walking
service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout
leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of
shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. What was
Souza's profit for her summer job? - CORRECT ANSWER- ✔✔$125
With a communist economy system: - CORRECT ANSWER- ✔✔none of the above is true
The unemployment rate is the percentage of the total work force that is not working but is: -
CORRECT ANSWER- ✔✔actively looking for work
The implementation of an expansionary policy by the Federal Reserve would result in: -
CORRECT ANSWER- ✔✔lower interest rates
When the Federal Reserve implements a _____, it tightens the money supply by selling
government securities or raising interest rates. - CORRECT ANSWER- ✔✔contractionary
policy
Individual ownership of property is a key element in: - CORRECT ANSWER- ✔✔capitalism
Questions and CORRECT Answers
The _____ represents the prices of a market basket of goods and services as measured
monthly by the Department of Labor. - CORRECT ANSWER- ✔✔consumer price index
(CPI)
The laborers displaced due to assembly line automation at the textile plant may not have the
skills needed to operate the computerized machines that replaced them. This is an example of
_____ unemployment. - CORRECT ANSWER- ✔✔structural
Which of the following countries has a high standard of living? - CORRECT ANSWER-
✔✔the United States
The government does not consider full employment to mean 100 percent of its citizens are
employed because: - CORRECT ANSWER- ✔✔all of the above conditions can add and do
exist
RATIONALE:
Market equilibrium is: - CORRECT ANSWER- ✔✔the point at which quantity supplied
equals quantity demanded
Which of the following is an example of a business? - CORRECT ANSWER- ✔✔all of the
above (business)
An industry in which a few firms produce most or all of the output of a product and in which
large amounts of capital are needed is called a(n): - CORRECT ANSWER- ✔✔oligopoly
In a(n) _____, a few sellers can exert substantial control over prices. - CORRECT ANSWER-
✔✔oligopoly
The situation in which the average of all prices of products is rising is called: - CORRECT
ANSWER- ✔✔inflation
,The quantity of a product or service that businesses will make available at various prices is
called: - CORRECT ANSWER- ✔✔supply
Fiscal policy is concerned with: - CORRECT ANSWER- ✔✔taxation and spending
A decline in real GDP that lasts for two consecutive quarters is called a(n): - CORRECT
ANSWER- ✔✔recession
_____ is the amount of money remaining from a firm's sales revenue after it deducts
production costs, interest costs, and taxes. - CORRECT ANSWER- ✔✔profit
The slope of the demand curve is: - CORRECT ANSWER- ✔✔downward and to the right
A market in which there are a large number of firms that differentiate their products is called:
- CORRECT ANSWER- ✔✔monopolistic competetition
The standard of living in any country is: - CORRECT ANSWER- ✔✔measured by the output
of goods and services people can buy with the money they have
In a _____, the factors of production are owned collectively rather than individually, and no
incentives to work harder or to produce quality products are provided. - CORRECT
ANSWER- ✔✔communist economic system
When the government raises taxes on consumers and businesses, it is dealing with _____
policy. - CORRECT ANSWER- ✔✔fiscal
What is the primary difference between a good and a service? - CORRECT ANSWER- ✔✔a
good is tangible, a service is intangible
_____ refers to a government's programs for controlling the amount of money in circulation. -
CORRECT ANSWER- ✔✔monetary policy
, In Canada, the government owns the communications, transportation, and utilities industries,
while most other activity is carried on by private enterprise. Canada is an example of: -
CORRECT ANSWER- ✔✔a mixed economy
Jarvis Washington recently quit his job as a veterinarian's assistant and is now trying to find a
job with another veterinarian. This is an example of _____ unemployment. - CORRECT
ANSWER- ✔✔frictional
RATIONALE:
The economic system under which basic industries are operated by the government or owned
by the private sector under strong government control is called: - CORRECT ANSWER-
✔✔socialism
Iris Souza started the summer with $30. She took $10 and made signs for her dog walking
service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout
leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of
shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. What was
Souza's profit for her summer job? - CORRECT ANSWER- ✔✔$125
With a communist economy system: - CORRECT ANSWER- ✔✔none of the above is true
The unemployment rate is the percentage of the total work force that is not working but is: -
CORRECT ANSWER- ✔✔actively looking for work
The implementation of an expansionary policy by the Federal Reserve would result in: -
CORRECT ANSWER- ✔✔lower interest rates
When the Federal Reserve implements a _____, it tightens the money supply by selling
government securities or raising interest rates. - CORRECT ANSWER- ✔✔contractionary
policy
Individual ownership of property is a key element in: - CORRECT ANSWER- ✔✔capitalism
