Question 1

The study of how to increase resources is known as what?

Accepted Answer

The study of how to increase resources is specifically known as resource development. While macroeconomics and microeconomics both deal with the broader study of economics, they do not focus solely on resource development. Resource economics is a field that studies the management and conservation of natural resources, but it does not emphasize the increase of resources.

Question 2

A supply curve indicates the relationship between ___ and the quantity supplied.

Accepted Answer

A supply curve shows the relationship between price and the quantity supplied. As the price of a good or service increases, the quantity supplied also increases, and as the price decreases, the quantity supplied decreases. The supply curve is upward sloping because of the law of supply, which states that producers are willing to supply more of a good or service at higher prices, as they can earn more revenue and profit.

Question 3

According to Adam Smith,the best way for the government to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

Accepted Answer

Adam Smith believed in the importance of individual freedom and the market economy. He argued that entrepreneurs pursuing their own self-interest would lead to the most efficient use of resources and the greatest economic growth. Therefore, the best way for the government to encourage job creation and production of desired products would be to allow entrepreneurs a great deal of personal freedom.

Question 4

A(n)_______curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period.

Accepted Answer

A demand curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period. The other answer choices are not related to this concept.

Question 5

The reason why many socialist countries have experienced brain drain is that:

Accepted Answer

Tax rates on talented individuals tend to be very high in socialist countries, which often leads to a brain drain as these individuals seek better opportunities and higher pay in other countries. This is because their skills and knowledge are highly valued and can often command high salaries, but socialist policies prioritize equality over individual earnings.

Question 6

Under capitalism:

Accepted Answer

Under capitalism, most of the means of production and distribution are privately owned and operated for profit. The primary goal of capitalism is to encourage competition and innovation by allowing businesses to operate without government interference, except for certain regulations intended to protect consumers and maintain a level playing field in the marketplace. The government does not typically control or own utilities, healthcare, education, or other services, as these are typically provided by private businesses or non-profit organizations. Similarly, the government's primary function is not to distribute wealth more evenly, but rather to ensure that markets operate fairly and efficiently.

Question 7

In capitalism,most decisions about what goods and services to produce are made by:

Accepted Answer

In capitalism, most decisions about what goods and services to produce are made by business people, who aim to maximize their profits by producing goods and services that are in demand and can be sold at a profitable price. This is known as the law of supply and demand, where the market determines the prices and quantities of goods and services.

Question 8

The Canadian economic system can be described as a:

Accepted Answer

The Canadian economic system is a mixed economy that combines elements of free enterprise capitalism and government intervention. While the private sector plays a major role in the economy, the government also provides a social safety net and regulates certain industries, such as healthcare and transportation.

Question 9

The _______is a statistic that is used to compute the pace of inflation or deflation.

Accepted Answer

The consumer price index (CPI) measures changes in the price level of a basket of goods and services consumed by households. It is commonly used as a measure of inflation or deflation in an economy. The index of leading indicators (A) is a composite index that measures economic activity such as employment, production, consumer confidence, and stock prices, to predict changes in the business cycle. The index of inflationary trends (B) is not a recognized statistical measure. Gross domestic product (D) measures the value of all goods and services produced within a country's borders and is used as an indicator of economic activity and growth.

Question 10

The government of Ruritania has implemented many programs that promote equality,but has become concerned about the very slow rate of growth that has plagued the national economy for many years.In order to address this problem,the government is likely to:

Accepted Answer

Reducing taxes and cutting back on some social programs can stimulate economic growth by increasing disposable income and providing businesses with more resources to invest and expand. This approach is often used by governments to promote economic growth. Avoiding fiscal policies or reducing the supply of money in circulation can lead to a further slowdown in the economy. Taking control of major industries can lead to inefficiencies and reduce innovation, ultimately harming economic growth. Balancing the budget is important but may not be sufficient on its own to stimulate economic growth.

Question 11

In the nation of Equalia,many businesses are privately owned,but the government owns some of the basic businesses and has developed many social programs designed to promote social equality.Tax rates are high,and many educated people have left the country.The economy of Equalia would be considered an example of:

Accepted Answer

The economy of Equalia is an example of socialism as the government owns some basic businesses and has social programs to promote social equality. Tax rates are high, which is a characteristic of socialist economies. This is not an example of communism, as there are still privately owned businesses in Equalia. Mercantilism and pure capitalism do not involve government intervention in the economy.

Question 12

Which of the following would be a topic emphasized in a microeconomics class?

Accepted Answer

Microeconomics is concerned with the behavior of individuals and firms in specific markets, and how market conditions affect the production, pricing, and distribution of goods and services. Therefore, the topic emphasized in a microeconomics class is how market conditions determine the price of a specific product. Options A, B, and D are topics in macroeconomics that focus on the overall performance of the economy as a whole, rather than specific markets.

Question 13

Under socialism:

Accepted Answer

Socialism is based on the idea of collective ownership of the means of production and a more equal distribution of wealth. Therefore, reducing inequality in the distribution of wealth is a major goal of the government under socialism. Encouraging entrepreneurs and keeping tax rates extremely low are not typically emphasized in socialist systems. Allowing those that create wealth to keep that wealth is also not a goal, as wealth is meant to be shared for the benefit of all members of society.

Question 14

Although it has been considered a capitalist economy in the past,for the past several years the economy of the nation of Suburbania has become more socialist in its characteristics.Which of the following trends is most likely to be associated with Suburbania's movement toward socialism?

Accepted Answer

A movement towards socialism is characterized by a more equal distribution of wealth, as the government takes a more active role in redistributing resources to reduce income inequality. Options A, B, and D are all more in line with a capitalist economy, which emphasizes free markets and less government intervention.

Question 15

The study of how society employs resources to produce goods and services and distribute them for consumption among various competing groups and individuals is known as:

Accepted Answer

The study of how society employs resources to produce goods and services and distribute them for consumption among various competing groups and individuals is the definition of economics. Marketing focuses on identifying and satisfying consumer needs, finance deals with management of money and investments, and human resource management deals with the recruitment, training, and management of employees within an organization.

Question 16

A key assumption of socialism is that:

Accepted Answer

Socialism assumes that government ownership of some basic businesses is desirable because it helps achieve a more equal distribution of profits among the people. This belief is based on the ideas of collective ownership and control of resources, and the rejection of private ownership as a means of creating a fair and just society. Socialist economies emphasize equitable distribution of wealth and resources through government management of the economy.

Question 17

Over the recent past,Canadian governments have been privatizing a number of businesses,as growing public sentiment is that governments are not effective as business operators.This trend is an example of the growth of:

Accepted Answer

The privatization of businesses in Canada shows the growth of free-market economies, where private companies and individuals have more control over the production and distribution of goods and services than the government. The government is relinquishing its control over certain industries and allowing the free market to dictate operations.

Question 18

An increase in_______ means that a given number of workers can produce more output than before.

Accepted Answer

Productivity is a measure of output per unit of input, such as labor. If productivity increases, then each worker can produce more output, which means the same number of workers can produce more goods and services than before. This leads to economic growth and can help to reduce unemployment. The other options, such as CPI (consumer price index) and GDP (gross domestic product), are unrelated to the ability of workers to produce more output. Structural unemployment refers to job losses due to changes in the structure of the economy, such as a shift in demand away from certain industries.

Question 19

_______studies the operation of a nation's economy as a whole.

Accepted Answer

Macroeconomics studies the operation of a nation's economy as a whole, including issues such as inflation, unemployment, and GDP. Microeconomics focuses on the behaviors and decision making of individuals and businesses within the economy. Socioeconomics examines the social and economic factors that influence and are influenced by economic activity. Econometrics uses statistical methods to analyze economic data.

Question 20

_______refers to a general rise in the price level of goods and services over time.

Accepted Answer

Inflation refers to a general rise in the price level of goods and services over time. A recession is a period of economic decline, while escalation and acceleration refer to increases in specific things (such as military activities or speed).

Quiz 2: How Economic Issues Affect Business