BUS 6600 FINAL EXAM WITH
ANSWERS
5 FACTORS OF PRODUCTION
land, labor, capital, entrepreneurship, knowledge
GOVERNMENTS REDUCE THE RISKS OF
ENTREPRENEURSHIP
allow private ownership
minimal tax
establish tradable currency
lessen corruption
Effectiveness
doing the right things
Efficiency
using resources in such a way as to maximize the
production of goods and services
,productivity
output per unit of input
Economics
the study of how society manages its scarce resources
Invisible Hand Theory
Adam Smith's theory that the actions of independent,
self-interested buyers and sellers will often result in the
most efficient allocation of resources
Capitalism
An economic system based on private ownership of
capital
4 basic rights of capitalism
1. The right to own private property
,2. The right to own a business and keep all that
business's profits
3. The right to freedom of competition
4. The right to freedom of choice
free market
An economic system in which prices and wages are
determined by unrestricted competition between
businesses, without government regulation or fear of
monopolies.
Socialism
A system in which society, usually in the form of the
government, owns and controls the means of production.
Comunism
Goverment system were everyone are equal and the
goverment distributes money evenly
mixed economy
, An economy in which private enterprise exists in
combination with a considerable amount of government
regulation and promotion.
Key Economic Indicators
GDP, unemployment rate, price indexes
4 phases of the business cycle
economic boom, recession, depression, recovery
fiscal policy
Government policy that attempts to manage the
economy by controlling taxing and spending.
monetary policy
managing the economy by altering the supply of money
and interest rates
ANSWERS
5 FACTORS OF PRODUCTION
land, labor, capital, entrepreneurship, knowledge
GOVERNMENTS REDUCE THE RISKS OF
ENTREPRENEURSHIP
allow private ownership
minimal tax
establish tradable currency
lessen corruption
Effectiveness
doing the right things
Efficiency
using resources in such a way as to maximize the
production of goods and services
,productivity
output per unit of input
Economics
the study of how society manages its scarce resources
Invisible Hand Theory
Adam Smith's theory that the actions of independent,
self-interested buyers and sellers will often result in the
most efficient allocation of resources
Capitalism
An economic system based on private ownership of
capital
4 basic rights of capitalism
1. The right to own private property
,2. The right to own a business and keep all that
business's profits
3. The right to freedom of competition
4. The right to freedom of choice
free market
An economic system in which prices and wages are
determined by unrestricted competition between
businesses, without government regulation or fear of
monopolies.
Socialism
A system in which society, usually in the form of the
government, owns and controls the means of production.
Comunism
Goverment system were everyone are equal and the
goverment distributes money evenly
mixed economy
, An economy in which private enterprise exists in
combination with a considerable amount of government
regulation and promotion.
Key Economic Indicators
GDP, unemployment rate, price indexes
4 phases of the business cycle
economic boom, recession, depression, recovery
fiscal policy
Government policy that attempts to manage the
economy by controlling taxing and spending.
monetary policy
managing the economy by altering the supply of money
and interest rates
