Question 1

The four basic types of competition that take shape in a private enterprise system are:&#10;A) Macroeconomics, microeconomics monopoly, and capitalism.&#10;B) Socialism, democracy, communism, and capitalism.&#10;C) Pure competition, monopolistic competition, oligopoly, and monopoly.&#10;D) Recession, depression, inflation, and deflation.

Accepted Answer

Pure competition, monopolistic competition, oligopoly, and monopoly are the four basic types of competition that take shape in a private enterprise system. Macroeconomics, microeconomics, socialism, democracy, communism, recession, depression, inflation, and deflation are not types of competition.

Question 2

__________typically slope downward, meaning that lower and lower prices attract larger and larger purchases.&#10;A) Demand curves&#10;B) Supply curves&#10;C) Equilibrium levels&#10;D) Market prices

Accepted Answer

Demand curves typically slope downward because as the price of a product decreases, more consumers are willing and able to purchase it. This results in a larger quantity demanded at lower prices.

Question 3

Excess consumer demand creates:&#10;A) Demand-pull inflation&#10;B) Cost-push inflation&#10;C) Hyperinflation&#10;D) Deflation

Accepted Answer

Excess consumer demand leads to demand-pull inflation, as there is more demand than supply for goods and services, causing prices to rise. Cost-push inflation, hyperinflation, and deflation are caused by different factors.

Question 4

_________________applies to members of the workforce who are temporarily not working but are looking for jobs.&#10;A) Seasonal unemployment&#10;B) Cyclical unemployment&#10;C) Unemployment&#10;D) Frictional unemployment

Accepted Answer

Frictional unemployment applies to people who are temporarily not working but are actively searching for jobs. This type of unemployment occurs due to the time and effort it takes for workers to match their skills and preferences with available job openings.

Question 5

When the government makes decisions about taxes and spending, it is applying:&#10;A) Fiscal policy&#10;B) Monetary policy&#10;C) Structural policy&#10;D) Frictional policy

Accepted Answer

Fiscal policy involves decisions about government spending and taxation to influence economic conditions such as inflation, employment, and economic growth. Monetary policy, on the other hand, involves decisions made by a central bank to regulate the money supply, interest rates, and credit conditions in an economy. Structural policy refers to policies aimed at restructuring the economy, while frictional policy is not a commonly used term in economics. Therefore, the best choice in this case is A) Fiscal policy.

Question 6

Which one of the following is NOT cited by the text book as a key global economic challenge:&#10;A) International terrorism&#10;B) The shift to a global information economy&#10;C) The aging of the world's population&#10;D) Increasingly complex corporate social responsibility

Accepted Answer

Increasingly complex corporate social responsibility is not cited by the textbook as a key global economic challenge.

Question 7

Of the four basic types of competition that take shape in a private enterprise system, which one of the following is characterized by no direct competition?&#10;A) Pure competition&#10;B) Monopoly&#10;C) Oligopoly&#10;D) Monopolistic competition

Accepted Answer

Monopoly is characterized by no direct competition as there is only one seller in the market, controlling the supply and price of the product or service. Pure competition, monopolistic competition, and oligopoly all involve varying degrees of direct competition between multiple sellers.

Question 8

Which one of the following statements concerning the supply curve is correct?&#10;A) A supply curve shows the relationship between different prices and the amount of goods that sellers will offer for sale at those prices, regardless of demand&#10;B) As price rises, the quantity that sellers are willing to supply decreases&#10;C) At lower prices, the quantity that sellers are willing to supply increases&#10;D) A change in the cost of availability of any inputs will have no discernible impact on the supply curve

Accepted Answer

The supply curve illustrates the relationship between price levels and the quantity of goods that producers are willing to supply, independent of demand factors. It typically slopes upward, indicating that higher prices incentivize producers to supply more of a good.

Question 9

An economic system where the government owns and operates the major industries is referred to as:&#10;A) Socialism&#10;B) Regulated Capitalism&#10;C) Communism&#10;D) Mixed market economy

Accepted Answer

In socialism, the government owns and operates major industries, aiming to distribute resources and wealth more equally among the population.

Question 10

Recession is a cycle of economic contraction that lasts for:&#10;A) One month&#10;B) Two months&#10;C) Five months&#10;D) Six months or longer

Accepted Answer

A recession is defined as a period of economic decline that lasts for at least six months or longer. This is typically measured in terms of gross domestic product (GDP), which is the total value of goods and services produced in a country. During a recession, there is generally a decline in economic activity, including employment, production, and consumer spending. The length of a recession can vary, but it is typically seen as a longer-term cycle in the economy.

Question 11

Which one of the following statements about a government's decision to reduce the money supply is INCORRECT?&#10;A) This would represent a restrictive monetary policy&#10;B) Economic growth would be slowed&#10;C) The rate of rising prices would be slowed&#10;D) The cost of borrowing would decrease

Accepted Answer

The answer of Which one of the following statements about...

Question 12

__________reduces the money supply to curb rising prices, overexpansion, and concerns about overly rapid economic growth.&#10;A) Expansionary monetary policy&#10;B) Restrictive monetary policy&#10;C) Monetary policy&#10;D) Fiscal policy

Accepted Answer

The answer of __________reduces the money supply to curb rising...

Question 13

The willingness and ability of buyers to purchase goods and services at different prices is called&#10;A) Demand.&#10;B) Supply.&#10;C) An economic system.&#10;D) Owners rights.

Accepted Answer

The answer of The willingness and ability of buyers to...

Question 14

Which one of the following changes does not cause a shift in the demand curve?&#10;A) An increase in the price of a good such as, for example, gasoline&#10;B) An increase in household income&#10;C) A decrease in household income&#10;D) An increase in the price of substitute goods

Accepted Answer

The answer of Which one of the following changes does...

Question 15

According to Statistics Canada, which one of the following categories represents the largest percentage of the &#34;market basket&#34; in the Consumer Price Index?&#10;A) Food&#10;B) Shelter&#10;C) Transportation&#10;D) Clothing and footwear

Accepted Answer

The answer of According to Statistics Canada, which one of...

Deck 3: Economic Challenges Facing Business Today