BUSN 1003 EXAM 1 QUESTIONS AND 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
Because the government owns the factors of production in public lands, postal service, and some water
resources, Great Britain is considered a(n): - CORRECT ANSWER✅✅mixed economy
Which of the following is NOT a form of unemployment? - CORRECT ANSWER✅✅fiscal unemployment
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
Because the government owns the factors of production in public lands, postal service, and some water
resources, Great Britain is considered a(n): - CORRECT ANSWER✅✅mixed economy
Which of the following is NOT a form of unemployment? - CORRECT ANSWER✅✅fiscal unemployment
