Question 1

of the following are time periods that the U.S.economy experienced a period of recession EXCEPT:
A) 1973−1975
B) 1981−1982
C) 1990−1991
D) 2007−2009
E) 2010−2011 (as of late-2011)

Accepted Answer

The U.S. economy did not experience a recession during 2010−2011; the recession prior to this period ended in 2009.

Question 2

total amount of money made in one year by a person,household,or family unit is referred to as __________ income.
A) government
B) discretionary
C) disposable
D) gross
E) livable

Accepted Answer

Gross income is the total amount of income earned by an individual, household, or family unit in a given year before any deductions or taxes are taken out. It includes income from all sources, such as wages, salaries, tips, interest, dividends, and rental income.

Question 3

Marketers collect and use environmental information to better understand consumers.The ESRI Tapestry Segmentation tool is used to
A) obtain an economic profile of "hometowns" in comparison to national profiles.
B) obtain a profile of customers who identify themselves as members of multiracial or multiethnic groups.
C) identify behavioral segments of the population interested in the more domestic arts such as sewing, crocheting, knitting, and quilting.
D) help segment markets in the areas of home design based on decorating styles such as traditional, Victorian, contemporary, etc.
E) identify similarities rather than differences among a diverse group of consumers by race, ethnicity, gender, and age.

Accepted Answer

The answer of Marketers collect and use environmental information to...

Question 4

Disposable income refers to
A) the money that remains after paying for taxes and necessities.
B) the money deducted from a person's paycheck to pay for federal, state, and local taxes.
C) the total amount of money made by a single individual in his or her lifetime.
D) the money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation.
E) the money that is spent for necessities or charitable causes that is exempt from taxation

Accepted Answer

Disposable income refers to the money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation. This is different from gross income, which is the total amount of money made before taxes and deductions. Option A is similar in meaning but lacks the specificity of including taxes as a deduction. Option B refers specifically to taxes, but does not include the concept of necessities. Option C is incorrect because disposable income refers to a yearly or monthly amount, not a lifetime total. Option E is incorrect because disposable income does not include money spent on necessities, which are not exempt from taxation.

Question 5

taxes rise at a faster rate than incomes,consumers will
A) have less disposable income and try to economize.
B) feel more confident in the government and therefore spend more money.
C) be able to afford to take a vacation.
D) recognize that it's the perfect opportunity to buy a car.
E) react by voting for all incumbent members of Congress.

Accepted Answer

If taxes rise at a faster rate than incomes, consumers will have less money to spend on other goods and services. This means they will likely try to economize and cut back on spending, leading to a decrease in demand for various products.

Question 6

Department of Labor monitors consumer expenditures through its annual __________.
A) Consumer Price Index
B) Consumer Confidence Index
C) Consumer Expenditure Survey
D) Index of Consumer Sentiment
E) National Consumer Spending Survey

Accepted Answer

The Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey. The other options listed are also related to consumer behavior, but do not specifically focus on monitoring consumer expenditures.

Question 7

the U.S.Census Bureau,gross income is referred to as __________.
A) buying power
B) cash inflow
C) money income
D) fiscal power
E) household income

Accepted Answer

According to the U.S. Census Bureau, gross income is referred to as "money income." This includes wages, salaries, self-employment earnings, and other types of income before taxes and deductions.

Question 8

recent large decline in __________ has had a psychological impact on consumers who tend to spend more when they feel their net worth is rising and postpone purchases when it declines.
A) automobile prices
B) fuel prices
C) the number of people competing for jobs
D) consumer confidence
E) property values

Accepted Answer

Property values have a direct impact on a consumer's net worth, as it represents a significant portion of their assets. A large decline in property values can lead to a decrease in consumer confidence, which in turn can result in postponed purchases and a decrease in consumer spending.

Question 9

money a consumer has left after paying taxes to use for necessities such as food,shelter,clothing,and transportation is referred to as __________.
A) net income
B) disposable income
C) discretionary income
D) household income
E) gross income

Accepted Answer

Disposable income is the amount of money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation. This is the money that can be used for discretionary spending, such as entertainment and travel, after essential expenses have been covered.

Question 10

1970,the typical U.S.household earned about $8,700.In 2009,the typical U.S.household earned about $49,777.If adjusted for inflation,the gross income of the typical U.S.household in 2009 relative to 1970 has __________.
A) increased dramatically
B) increased somewhat
C) remained relatively stable
D) decreased somewhat
E) decreased dramatically

Accepted Answer

When adjusted for inflation, the purchasing power of the typical U.S. household income in 2009 compared to 1970 has remained relatively stable, as the increase in nominal income is largely offset by inflation over the period.

Question 11

money that remains after paying for taxes and necessities is referred to as __________.
A) net income
B) discretionary income
C) disposable income
D) household income
E) gross income

Accepted Answer

Discretionary income refers to the money that remains after paying for taxes and necessities, such as housing, food, and transportation. This money can be used for discretionary spending, such as entertainment, travel, or saving for the future. It is an important measure of a household's financial health, as it reflects their ability to save and invest for the future. Net income refers to income after taxes are deducted, while disposable income refers to income after taxes and mandatory expenses (such as rent or mortgage payments) are deducted. Household income refers to total income earned by all members of a household, while gross income refers to total income before taxes are deducted.

Question 12

Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey.In 2009,consumers spent about 13 percent of their income on food,34 percent on __________,and 3.5 percent on clothes.
A) education
B) housing
C) vacations
D) health care
E) transportation

Accepted Answer

According to the given information, consumers spent the highest percentage of their income on housing, which was 34%. Therefore, option B) housing is the correct answer. The other options, such as education, vacations, health care, and transportation, are not mentioned in the given information as a significant percentage of consumer spending.

Question 13

time of declining economic activity when businesses decrease production,unemployment rises,and many consumers have less money to spend is referred to as
A) deflation.
B) inflation.
C) prosperity.
D) a recession.
E) a depression.

Accepted Answer

A recession is a time of declining economic activity characterized by a decrease in production, rising unemployment, and reduced consumer spending power. Deflation and inflation refer to changes in the overall level of prices, while prosperity refers to a period of economic growth and expansion. A depression is a severe and prolonged downturn in economic activity, similar to a recession but more severe.

Question 14

Which of the following measures consumers' expectations of the U.S.economy?
A) Index of Consumer Sentiment
B) Consumer Expenditure Survey
C) U.S. 2010 Census
D) Survey of Consumer Finances
E) Survey of Buying Power

Accepted Answer

The Index of Consumer Sentiment, as measured by the University of Michigan, surveys a sample of households on their attitudes and expectations about the economy. It is used as an indicator of consumer confidence and can provide insights into future consumer spending.

Question 15

Increases in discretionary income can occur as a result of all of the following EXCEPT:
A) an increase in gross income.
B) a decrease in taxes.
C) an increase in disposable income.
D) an increase in savings.
E) a decline in inflation.

Accepted Answer

An increase in savings does not lead to an increase in discretionary income, as discretionary income is the income that remains after paying for necessary expenses (including savings). Increasing savings actually decreases the available discretionary income. Therefore, all other options (A, B, C, and E) can result in an increase in discretionary income.

Question 16

Discretionary income refers to
A) the money deducted from a person's paycheck to pay for federal, state, and local taxes.
B) the total amount of money made by a single individual in his or her lifetime.
C) the money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation.
D) the money that remains after paying for taxes and necessities.
E) the money that is spent for necessities or charitable causes that is exempt from taxation.

Accepted Answer

Discretionary income is the money that remains after paying for taxes and necessities such as housing, groceries, and transportation. It is the money that a person can choose to spend on non-essential items or save for future expenses.

Question 17

Gross income refers to
A) the money that remains after paying for taxes and necessities.
B) the money deducted from a person's paycheck to pay for federal, state, and local taxes.
C) the money a consumer has left after paying taxes to use for necessities such as food, shelter, clothing, and transportation.
D) the total amount of money made by a single individual in his or her lifetime.
E) the total amount of money made in one year by a person, household, or family unit.

Accepted Answer

Gross income refers to the total amount of money made in one year by a person, household, or family unit. It includes income from wages, salaries, tips, interest earned, rental income, and any other source of income before taxes and deductions are taken out.

Question 18

Components of a consumer's income include __________.
A) inflation, recession, and depression
B) salary, wages, and commissions
C) gross, disposable, and discretionary income
D) sales taxes, income taxes, and property taxes
E) assets, liabilities, and equities

Accepted Answer

Gross income refers to the total amount of money a person earns before taxes and other deductions. Disposable income is the amount of money a person has left over after paying taxes and necessary expenses, such as rent or mortgage. Discretionary income is the amount of money that is left over after all necessary expenses are paid and can be spent on non-essential items or savings. Therefore, choice C is the correct answer as it includes all three types of income.

Question 19

During a recessionary period,which of the following is expected?
A) The use of credit would decline.
B) Consumer spending would increase.
C) Taxes would increase nationally.
D) Property values would jump dramatically.
E) Consumers would use the majority of their discretionary income on entertainment.

Accepted Answer

During a recession, people tend to be more cautious with their spending and may have less access to credit due to tighter lending policies of financial institutions. Therefore, the use of credit is expected to decline.

Note: Choices B, C, D, and E are not expected during a recessionary period. Consumer spending tends to decrease during a recession, taxes are generally lowered to stimulate the economy, property values usually decrease or remain stagnant, and consumers may cut back on entertainment expenses in favor of necessities.

Question 20

Income used to buy luxury items such as a Regent cruise is referred to as __________.
A) gross income
B) disposable income
C) surplus income
D) wealth income
E) discretionary income

Accepted Answer

Discretionary income refers to the income that is available after all necessary expenses have been paid, and it can be used at the discretion or choice of the individual, often towards luxury items or experiences such as a Regent cruise. Gross income refers to the total income earned before taxes or deductions, disposable income refers to the income left over after necessary expenses have been paid, surplus income refers to income that exceeds necessary expenses but may not necessarily be used for luxury items, and wealth income refers to income generated from assets or investments.

Quiz 3: Scanning the Marketing Environment

of the following are time periods that the U.S.economy experienced a period of recession EXCEPT:

total amount of money made in one year by a person,household,or family unit is referred to as __________ income.

Marketers collect and use environmental information to better understand consumers.The ESRI Tapestry Segmentation tool is used to

Disposable income refers to

taxes rise at a faster rate than incomes,consumers will

Department of Labor monitors consumer expenditures through its annual __________.

the U.S.Census Bureau,gross income is referred to as __________.

recent large decline in __________ has had a psychological impact on consumers who tend to spend more when they feel their net worth is rising and postpone purchases when it declines.

money a consumer has left after paying taxes to use for necessities such as food,shelter,clothing,and transportation is referred to as __________.

1970,the typical U.S.household earned about $8,700.In 2009,the typical U.S.household earned about $49,777.If adjusted for inflation,the gross income of the typical U.S.household in 2009 relative to 1970 has __________.

money that remains after paying for taxes and necessities is referred to as __________.

Department of Labor monitors consumer expenditures through its annual Consumer Expenditure Survey.In 2009,consumers spent about 13 percent of their income on food,34 percent on __________,and 3.5 percent on clothes.

time of declining economic activity when businesses decrease production,unemployment rises,and many consumers have less money to spend is referred to as

Which of the following measures consumers' expectations of the U.S.economy?

Increases in discretionary income can occur as a result of all of the following EXCEPT:

Discretionary income refers to

Gross income refers to

Components of a consumer's income include __________.

During a recessionary period,which of the following is expected?

Income used to buy luxury items such as a Regent cruise is referred to as __________.