LOMA 308 Module 1 || EXAM QUESTIONS
CORRECTLY ANSWERED; TO SCORE A+!!
Economy correct answers The part of the environment that includes all of the elements
affecting the production, distribution, and consumption of goods and services.
economies exist at three different levels
- local economies: include the activities of people, businesses, and governments in individual
neighborhoods, cities, provinces, territories, or states.
- national economies: include the activities of people, businesses, and governments in all
local economies in a nation.
- global economies: are multinational and include the activities of people, businesses, and
governments in multiple nations.
Economic Sectors correct answers Sector 1 (Raw Materials): Sector 1 activities form the
foundation of all economies by
Securing raw materials needed for production, such as land, lumber, coal, gas and oil,
minerals, and basic foods
Supporting industries such as agriculture, forestry, fishing and hunting, and mining
In developed economies, few people are involved in Sector 1. In developing economies, a
large percentage of the population is often involved.
Sector 2 (Manufactured Goods): Sector 2 activities
Turn raw materials into finished products, such as machinery, clothing, and packaged goods,
and make them available to consumers
Focus primarily on manufacturing, processing, and construction
Sector 3 (Services): Sector 3 activities
Facilitate the transfer of finished goods to end users through services such as wholesale/retail
sales, transportation and warehousing, and distribution
Enhance consumers' lives through services such as entertainment, media, financial services,
healthcare, and law
Sector 4 (Intellectual Property): Sector 4 activities
Improve the quality of life through education, government, and culture
Support intellectual concerns such as scientific research and information technology,
education, and the arts
Farmland Financial is a U.S. company that markets its products and services to clients
throughout the Midwest. Farmland's operations contribute to economic activities at the
(choose all that apply)
A. Local level
B. National level
C. Global level correct answers A & B - Farmland is part of the local economy of each
community and state in which it markets its products and services. Because a country's
national economy includes all local economies in the country, Farmland is also part of the
national economy. Farmland is not part of the global economy because it doesn't do business
outside the United States.
,The largest economic sector in most developed countries is
A. Sector 1 (Raw Materials)
B. Sector 2 (Manufactured Goods)
C. Sector 3 (Services)
D. Sector 4 (Intellectual Property) correct answers C. - The largest economic sector in most
developed countries, including the United States, is Sector 3 (Services), which facilitates the
transfer of finished goods to end users and enhances consumers' lives.
Activities performed in the Intellectual Property sector of the economy are designed, in part,
to
A. Provide entertainment, media, financial services, healthcare, and law
B. Promote scientific research and information technology
C. Support industries such as agriculture, forestry, fishing and hunting, and mining
d. Turn raw materials into finished products correct answers B. - Intellectual Property
includes activities related to scientific research, information technology, education,
government, and culture. Entertainment, media, and most services are part of Sector 3.
Activities that support agriculture, forestry, fishing, hunting, and mining are part of Sector 1.
Raw materials are turned into finished products in Sector 2.
Members of an Economy correct answers economy can be divided into four basic groups:
- Households: Households engage in the following economic activities:
Buy products and services to satisfy their personal wants and needs
Provide labor to businesses and governments
Save and invest to increase their personal wealth
- Businesses: Businesses engage in the following economic activities:
Buy raw materials to produce products or services
Buy finished products and services to support company operations
Secure labor from households
Produce and sell products and services
Invest money to increase company value
- Governments: Governments support the general operation of economies when they
Establish laws and regulations
Impose taxes on households and businesses
Purchase goods and services
Make transfer payments to individuals and businesses without receiving goods or services in
return
Provide public services such as education, utilities, and transportation
- Financial intermediaries: Financial intermediaries facilitate the movement of funds and
products or services between buyers and sellers in an economy by assisting with transactions.
Intermediaries also facilitate the transfer of funds from savers, who have a surplus of funds,
to borrowers, who have a shortage of funds, through the process of intermediation.
Transfer payments correct answers A payment made by a government for which no goods or
services are given in return.
Intermediation correct answers The transfer of funds from savers to borrowers through the
services of a financial intermediary.
Unlimited Wants and Needs correct answers Wants: A desire for particular products and
services.
, Needs: A condition that must be satisfied for individuals or businesses to survive.
Limited Resources correct answers Although members of an economy may have unlimited
wants and needs, they typically have limited resources. As a result, households, businesses,
and governments are forced to make choices about how and when to use their resources.
Economics correct answers The study of how societies and individuals allocate limited
resources among competing, unlimited wants and needs.
Transactions in which the government provides payment to a consumer but doesn't receive
anything in return are known as
A. Transfer payments
B. Intermediations correct answers A .- A transfer payment is a form of exchange in which a
government pays money to households or businesses but doesn't receive anything in return.
Intermediation is a process in which a financial intermediary facilitates the transfer of funds
from savers to borrowers or from investors to investment providers.
Economics is the study of how consumers allocate resources among wants and needs. In most
economies, consumers have
A. Unlimited needs and limited wants
B. Unlimited resources and limited needs
C. Limited needs and wants and limited resources
d. Limited resources and unlimited wants and needs correct answers D. - Economics is the
study of how members of an economy allocate limited resources among an unlimited number
of wants and needs.
If you work for a financial services company, you and your company participate in various
types of economic markets. What do you think is the primary purpose of these markets?
A. To set prices for goods and services
B. To facilitate exchanges between buyers and sellers
C. To eliminate the need for intermediaries to manage transactions
D. To convert different currencies into a form that is acceptable to buyers and sellers correct
answers B. - Most economies maintain product, labor, and capital markets. These markets
bring suppliers (sellers) of products and services together with consumers (buyers) of those
products and services to negotiate exchanges, or transactions. Some exchanges between
buyers and sellers are direct. Other exchanges are made indirectly through a financial
intermediary.
Exchanges correct answers A transaction in which one party gives something of value to
another party and receives something of value in return.
Economic Markets correct answers Most local and national economies maintain three general
types of markets.
- Product (Output) Markets: A market in which businesses supply finished goods and services
to households, other businesses, and governments.
- Labor Market: A market in which households offer their labor to businesses and
governments in exchange for wages or other compensation.
- Financial (Capital) Markets: A market in which money is transferred from savers to
borrowers .
CORRECTLY ANSWERED; TO SCORE A+!!
Economy correct answers The part of the environment that includes all of the elements
affecting the production, distribution, and consumption of goods and services.
economies exist at three different levels
- local economies: include the activities of people, businesses, and governments in individual
neighborhoods, cities, provinces, territories, or states.
- national economies: include the activities of people, businesses, and governments in all
local economies in a nation.
- global economies: are multinational and include the activities of people, businesses, and
governments in multiple nations.
Economic Sectors correct answers Sector 1 (Raw Materials): Sector 1 activities form the
foundation of all economies by
Securing raw materials needed for production, such as land, lumber, coal, gas and oil,
minerals, and basic foods
Supporting industries such as agriculture, forestry, fishing and hunting, and mining
In developed economies, few people are involved in Sector 1. In developing economies, a
large percentage of the population is often involved.
Sector 2 (Manufactured Goods): Sector 2 activities
Turn raw materials into finished products, such as machinery, clothing, and packaged goods,
and make them available to consumers
Focus primarily on manufacturing, processing, and construction
Sector 3 (Services): Sector 3 activities
Facilitate the transfer of finished goods to end users through services such as wholesale/retail
sales, transportation and warehousing, and distribution
Enhance consumers' lives through services such as entertainment, media, financial services,
healthcare, and law
Sector 4 (Intellectual Property): Sector 4 activities
Improve the quality of life through education, government, and culture
Support intellectual concerns such as scientific research and information technology,
education, and the arts
Farmland Financial is a U.S. company that markets its products and services to clients
throughout the Midwest. Farmland's operations contribute to economic activities at the
(choose all that apply)
A. Local level
B. National level
C. Global level correct answers A & B - Farmland is part of the local economy of each
community and state in which it markets its products and services. Because a country's
national economy includes all local economies in the country, Farmland is also part of the
national economy. Farmland is not part of the global economy because it doesn't do business
outside the United States.
,The largest economic sector in most developed countries is
A. Sector 1 (Raw Materials)
B. Sector 2 (Manufactured Goods)
C. Sector 3 (Services)
D. Sector 4 (Intellectual Property) correct answers C. - The largest economic sector in most
developed countries, including the United States, is Sector 3 (Services), which facilitates the
transfer of finished goods to end users and enhances consumers' lives.
Activities performed in the Intellectual Property sector of the economy are designed, in part,
to
A. Provide entertainment, media, financial services, healthcare, and law
B. Promote scientific research and information technology
C. Support industries such as agriculture, forestry, fishing and hunting, and mining
d. Turn raw materials into finished products correct answers B. - Intellectual Property
includes activities related to scientific research, information technology, education,
government, and culture. Entertainment, media, and most services are part of Sector 3.
Activities that support agriculture, forestry, fishing, hunting, and mining are part of Sector 1.
Raw materials are turned into finished products in Sector 2.
Members of an Economy correct answers economy can be divided into four basic groups:
- Households: Households engage in the following economic activities:
Buy products and services to satisfy their personal wants and needs
Provide labor to businesses and governments
Save and invest to increase their personal wealth
- Businesses: Businesses engage in the following economic activities:
Buy raw materials to produce products or services
Buy finished products and services to support company operations
Secure labor from households
Produce and sell products and services
Invest money to increase company value
- Governments: Governments support the general operation of economies when they
Establish laws and regulations
Impose taxes on households and businesses
Purchase goods and services
Make transfer payments to individuals and businesses without receiving goods or services in
return
Provide public services such as education, utilities, and transportation
- Financial intermediaries: Financial intermediaries facilitate the movement of funds and
products or services between buyers and sellers in an economy by assisting with transactions.
Intermediaries also facilitate the transfer of funds from savers, who have a surplus of funds,
to borrowers, who have a shortage of funds, through the process of intermediation.
Transfer payments correct answers A payment made by a government for which no goods or
services are given in return.
Intermediation correct answers The transfer of funds from savers to borrowers through the
services of a financial intermediary.
Unlimited Wants and Needs correct answers Wants: A desire for particular products and
services.
, Needs: A condition that must be satisfied for individuals or businesses to survive.
Limited Resources correct answers Although members of an economy may have unlimited
wants and needs, they typically have limited resources. As a result, households, businesses,
and governments are forced to make choices about how and when to use their resources.
Economics correct answers The study of how societies and individuals allocate limited
resources among competing, unlimited wants and needs.
Transactions in which the government provides payment to a consumer but doesn't receive
anything in return are known as
A. Transfer payments
B. Intermediations correct answers A .- A transfer payment is a form of exchange in which a
government pays money to households or businesses but doesn't receive anything in return.
Intermediation is a process in which a financial intermediary facilitates the transfer of funds
from savers to borrowers or from investors to investment providers.
Economics is the study of how consumers allocate resources among wants and needs. In most
economies, consumers have
A. Unlimited needs and limited wants
B. Unlimited resources and limited needs
C. Limited needs and wants and limited resources
d. Limited resources and unlimited wants and needs correct answers D. - Economics is the
study of how members of an economy allocate limited resources among an unlimited number
of wants and needs.
If you work for a financial services company, you and your company participate in various
types of economic markets. What do you think is the primary purpose of these markets?
A. To set prices for goods and services
B. To facilitate exchanges between buyers and sellers
C. To eliminate the need for intermediaries to manage transactions
D. To convert different currencies into a form that is acceptable to buyers and sellers correct
answers B. - Most economies maintain product, labor, and capital markets. These markets
bring suppliers (sellers) of products and services together with consumers (buyers) of those
products and services to negotiate exchanges, or transactions. Some exchanges between
buyers and sellers are direct. Other exchanges are made indirectly through a financial
intermediary.
Exchanges correct answers A transaction in which one party gives something of value to
another party and receives something of value in return.
Economic Markets correct answers Most local and national economies maintain three general
types of markets.
- Product (Output) Markets: A market in which businesses supply finished goods and services
to households, other businesses, and governments.
- Labor Market: A market in which households offer their labor to businesses and
governments in exchange for wages or other compensation.
- Financial (Capital) Markets: A market in which money is transferred from savers to
borrowers .
