Question 1

Unlike in capitalist states,in authoritarian states,_____.

Accepted Answer

In authoritarian states, the government holds a significant amount of control over the economy and often decides where investments should be made. This is in contrast to capitalist states where individuals have more freedom to generate personal wealth from their capital and private owners control factors of trade and production. Therefore, choice B is the best answer.

Question 2

Titus Inc. ,a Canadian car manufacturer,is planning to start its operations in Kalaus,a country in Eastern Europe,and Gimovia,a country in South America.Kalaus is a small nation,whereas Gimovia is triple the size of Kalaus in terms of geographic area.Before starting its operations in the two countries,Titus wants to compare the output of both the countries and measure the potential opportunities in both countries.Which of the following measures can Titus use for this purpose?

Accepted Answer

Gross domestic product (GDP) per capita is the best measure to compare the output of both countries as it takes into account the total value of goods and services produced within the country's borders, divided by the total population. It provides a better representation of a country's economic performance than measures like net domestic product or net national income, which only consider income earned within the country or by its citizens. Gross national income (GNI) per capita is also a valid option, but it includes income earned by a country's citizens abroad, which may not be relevant in this case.

Question 3

Liskos,a country in South America,has a command-based economy.It wants to increase the supply and efficiency of its labor force.Which of the following techniques can it use to achieve this?

Accepted Answer

Encouraging people to work more hours can increase the supply of labor in the economy. Decreasing the retirement age or achieving a high Gini coefficient are not directly related to increasing the supply and efficiency of the labor force. Increasing the reserve requirement is a monetary policy tool that aims to control inflation and may not necessarily affect the labor force.

Question 4

Unlike market-based systems,command-based systems:

Accepted Answer

Command-based systems allocate investment, production, and consumption based on a central plan, whereas market-based systems give individuals the right to generate personal wealth from their capital and encourage businesses to determine how much they privately consume and invest in the economy. Option A and B describe market-based systems, and Option C is ambiguous as it could be applicable to either system.

Question 5

Sikesa,a country in Eastern Europe,has a market-based economy.It is likely that:

Accepted Answer

In a market-based economy, individuals and businesses have control over their consumption and investment decisions. This means that they can generate personal wealth from capital and determine how much they want to produce and what to sell. Common law may play a role in regulating market activities, but it does not dictate investment or production decisions. Factors of trade and production are also not controlled by the state in a market-based economy.

Question 6

Cumulus Inc. ,an American consumer electronics company,is planning to start its operations in Kilnedia,a country in West Asia.To determine the output of Kilnedia,Cumulus wants to measure the value of finished goods and services produced within Kilnedia's borders by domestic and foreign companies.Given the information,it can be said that Cumulus is most likely to determine the _____ of Kilnedia.

Accepted Answer

Cumulus is trying to measure the value of finished goods and services produced within Kilnedia's borders, which is the definition of gross domestic product (GDP). Therefore, the best choice is D. The other options (A, B, and C) are not directly related to measuring the output of a country's economy. The Human Development Index measures a country's average achievements in areas such as education, health, and income; the Consumer Price Index measures the average change in prices over time for goods and services; and purchasing power parity measures the relative purchasing power of different currencies.

Question 7

Dean,a manager at Oxygen Inc. ,believes that a country's economic growth is a key proxy for the health of the country's economy.Which of the following statements supports his belief?

Accepted Answer

Economic growth is often viewed as a measurement of a country's overall economic health and its ability to provide opportunities for its citizens. Therefore, choice C supports Dean's belief that economic growth is a key proxy for the health of the country's economy. Choices A, B, and D do not directly support this belief.

Question 8

A country can increase the output of its goods and services by:

Accepted Answer

Increasing total factor productivity involves improving technology, increasing efficiency, and investing in human capital. This results in being able to produce more output with the same amount of inputs. The other choices do not directly contribute to increasing the output of goods and services. In fact, maintaining a high Gini coefficient, which measures income inequality, may even hinder growth by causing social unrest and decreased spending power. Quantitative easing and increasing the reserve requirement are monetary policy tools that affect interest rates and money supply, but do not directly impact productivity or output.

Question 9

The process of building businesses and manufacturing on a large scale is known as _____.

Accepted Answer

Industrialization refers to the process of building businesses and manufacturing on a large scale, utilizing machinery and advanced technology to increase production efficiency. Deregulation refers to the reduction or elimination of government regulations on businesses. Privatization refers to the transfer of ownership of government-owned goods or services to private companies. Subsidization refers to the provision of financial support or incentives by the government to businesses or industries.

Question 10

Unlike capitalism,communism:

Accepted Answer

Communism emphasizes a planned economy organized by the workers themselves, rather than relying on market forces or individual decision-making.

Question 11

Lavender Inc. ,an American apparel company,is planning to start its operations in Borihia,a country in South America.Sharon,a manager in the company,feels that the company should assess the strength of Borihia's economy before investing there.Which of the following measures can help Lavender Inc.in determining Borihia's economy?

Accepted Answer

Output per person, also known as GDP per capita, is a commonly used measure to determine the strength of an economy. It indicates the average economic output per person in a country, and can give an idea of the standard of living and economic development of the country. Cross price elasticity, customer retention rate, and a credit score are not directly related to assessing the strength of an economy.

Question 12

In Diberin,a country in Western Europe,instead of the government,private owners control factors of trade and production.Given this information,it can be said that Diberin follows _____.

Accepted Answer

Capitalism is an economic system characterized by private ownership of the means of production and the creation of goods and services for profit in a market economy. Given that private owners control factors of trade and production in Diberin, it can be concluded that it follows a capitalist economic system.

Question 13

_____ generally refers to a resource that can serve to generate wealth,such as factories,equipment,investment accounts,software,land,and education.

Accepted Answer

Capital generally refers to resources that can be used to generate wealth, such as money, property, factories, and equipment. It is a key factor in economic growth and development.

Question 14

Kirmia,a country in Eastern Europe,has a market-based economy.It wants to increase the total output of its goods and services.In which of the following ways can it increase its output?

Accepted Answer

To increase the output of goods and services, Kirmia should focus on increasing the supply and efficiency of labor. This can be achieved through investments in education and training programs, improving the business environment to attract more foreign investments, and implementing policies that encourage innovation and entrepreneurship. Maintaining a high Gini coefficient (A) could lead to income inequality, which could negatively affect economic growth. Quantitative easing (B) may stimulate the economy in the short term, but it could also lead to inflation or other long-term negative consequences. Increasing the reserve requirement (D) could limit the amount of money available for loans, which could restrict economic activity.

Question 15

Ashton,an economics professor at the University of California,believes that gross domestic product (GDP)focuses on domestic production.Which of the following statements supports his beliefs?

Accepted Answer

Gross domestic product (GDP) is a measure of the market value of all final goods and services produced within a country's borders in a given period of time. Therefore, it focuses on domestic production and takes into consideration where the output is produced. Option B focuses on ownership, Option C refers to foreign production and Option D refers to the beneficiaries.

Question 16

_____ is a measure of the efficiency with which labor and capital are utilized together.

Accepted Answer

Total factor productivity (TFP) is a measure of the efficiency with which labor and capital are utilized together. It measures how much output is produced per unit of combined labor and capital input, taking into account technology, managerial skill, and other factors that affect efficiency. The higher the TFP, the more efficient the use of labor and capital, and the greater the potential for economic growth.

Question 17

In Lubenir,a country in South America,its citizens can own capital,make decisions about how to use it,and reap the returns or losses of their business activities.Given this information,it can be said that Lubenir has a _____.

Accepted Answer

The citizens being able to own capital, make decisions about how to use it, and reap the returns or losses of their business activities indicates a market-based economy. In a market-based economy, the government does not have much control over how resources are allocated, and individuals are free to make their own economic decisions.

Question 18

_____ allows international businesses to predict the level of discretionary income consumers are likely to have in a country and is a rough first attempt to measure the potential opportunity.

Accepted Answer

The answer of _____ allows international businesses to predict the...

Question 19

_____ is also known as a market-based economy because it is regulated by the market forces of supply and demand.

Accepted Answer

Capitalism is an economic system where private individuals or businesses own and operate the factors of production (land, labor, and capital) for profit. In this system, prices and production are determined by supply and demand in the market, rather than by a central authority. This is why capitalism is also known as a market-based economy.

Question 20

In contrast to capitalist states,in authoritarian states,_____.

Accepted Answer

In authoritarian states, the government often has a significant role in the economy, including allocating production tasks to workers, unlike in capitalist states where market forces and private individuals usually determine production tasks.

Quiz 5: Economic Systems