BUS 6600 FINAL EXAM AND ACTUAL
DETAILED ANSWERS.
5 FACTORS OF PRODUCTION - Answer land, labor, capital, entrepreneurship, knowledge
GOVERNMENTS REDUCE THE RISKS OF ENTREPRENEURSHIP - Answer allow private ownership
minimal tax
establish tradable currency
lessen corruption
Effectiveness - Answer doing the right things
Efficiency - Answer using resources in such a way as to maximize the production of goods and
services
productivity - Answer output per unit of input
Economics - Answer the study of how society manages its scarce resources
Invisible Hand Theory - Answer 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 - Answer An economic system based on private ownership of capital
4 basic rights of capitalism - Answer 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 - Answer An economic system in which prices and wages are determined by
unrestricted competition between businesses, without government regulation or fear of
monopolies.
, Comunism - Answer Goverment system were everyone are equal and the goverment
distributes money evenly
mixed economy - Answer An economy in which private enterprise exists in combination with a
considerable amount of government regulation and promotion.
Key Economic Indicators - Answer GDP, unemployment rate, price indexes
4 phases of the business cycle - Answer economic boom, recession, depression, recovery
fiscal policy - Answer Government policy that attempts to manage the economy by controlling
taxing and spending.
monetary policy - Answer managing the economy by altering the supply of money and interest
rates
core inflation - Answer CPI minus food and energy costs
Keynesian economics - Answer Theory based on the principles of John Maynard Keynes,
stating that government spending should increase during business slumps and be curbed during
booms.
3 Ethics Questions - Answer is it legal
is it balanced
how will it make me feel
compliance-based ethics codes - Answer ethical standards that emphasize preventing unlawful
behavior by increasing control and by penalizing wrongdoers
integrity-based ethics codes - Answer ethical standards that define the organization's guiding
values, create an environment that supports ethically sound behavior, and stress a shared
accountability among employees
Corporate Social Responsibility - Answer a business's concern for society's welfare
DETAILED ANSWERS.
5 FACTORS OF PRODUCTION - Answer land, labor, capital, entrepreneurship, knowledge
GOVERNMENTS REDUCE THE RISKS OF ENTREPRENEURSHIP - Answer allow private ownership
minimal tax
establish tradable currency
lessen corruption
Effectiveness - Answer doing the right things
Efficiency - Answer using resources in such a way as to maximize the production of goods and
services
productivity - Answer output per unit of input
Economics - Answer the study of how society manages its scarce resources
Invisible Hand Theory - Answer 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 - Answer An economic system based on private ownership of capital
4 basic rights of capitalism - Answer 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 - Answer An economic system in which prices and wages are determined by
unrestricted competition between businesses, without government regulation or fear of
monopolies.
, Comunism - Answer Goverment system were everyone are equal and the goverment
distributes money evenly
mixed economy - Answer An economy in which private enterprise exists in combination with a
considerable amount of government regulation and promotion.
Key Economic Indicators - Answer GDP, unemployment rate, price indexes
4 phases of the business cycle - Answer economic boom, recession, depression, recovery
fiscal policy - Answer Government policy that attempts to manage the economy by controlling
taxing and spending.
monetary policy - Answer managing the economy by altering the supply of money and interest
rates
core inflation - Answer CPI minus food and energy costs
Keynesian economics - Answer Theory based on the principles of John Maynard Keynes,
stating that government spending should increase during business slumps and be curbed during
booms.
3 Ethics Questions - Answer is it legal
is it balanced
how will it make me feel
compliance-based ethics codes - Answer ethical standards that emphasize preventing unlawful
behavior by increasing control and by penalizing wrongdoers
integrity-based ethics codes - Answer ethical standards that define the organization's guiding
values, create an environment that supports ethically sound behavior, and stress a shared
accountability among employees
Corporate Social Responsibility - Answer a business's concern for society's welfare
