1. The study of how wealth is created and distributed is called
    Aconsumerism
    Beconomics
    Caccounting
    Dbusiness

Answer:B, economics

  1. The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs is called
    Afree enterprise
    Beconomics
    Cbusiness
    Dsocialism

Answer:C, business

  1. A market with only one seller is called
    Aa monopoly
    Ban oligopoly
    Cmonopolistic competition
    Dbarter

Answer:A, a monopoly

  1. In ______, key industries are owned and controlled by the government, and people may choose their own occupations. Private ownership of business is permitted in varying degrees.
    Aa market economy
    Bcapitalism
    Ccommunism
    Dsocialism

Answer:D, socialism

  1. Sylvia Benda immigrated from eastern Europe and has started and runs her own business. Every day, she risks her time, effort, and money in an attempt to earn a profit. In performing these activities, Sylvia is a(n)

Aconsumer
Bentrepreneur
Cdirector
Dbusiness cycle

Answer:B, entrepreneur

  1. ______is what remains after all business expenses have been deducted from sales revenue.
    AGross margin
    BAssets
    CMarginal revenue
    DProfit

Answer:D, Profit

  1. An industry in which there are few sellers, such as automobile manufacturing, can be described as a(n)
    Amonopoly
    Bnatural monopoly
    Coligopoly
    Dmonopolistic competition

Answer:C, oligopoly

  1. In a country where people have lost confidence in the value of the local currency, they have begun to trade goods and services they produce for goods and services produced by others – without using money. Such a situation is described as
    Aan oligopoly
    Bbarter
    Cmonopolistic competition
    Dproduct differentiation

Answer: B, barter

  1. The quantity of a product that producers are willing to sell at each of various prices is called
    Asupply
    Bdemand
    Cthe market price
    Dthe equilibrium price

Answer:A, supply

  1. The quantity of a product that buyers are willing to purchase at each of various prices is called
    Asupply
    Bdemand
    Cthe market price
    Dthe equilibrium price

Answer:B, demand

  1. If you added up the total dollar value of all goods and services produced by everyone in a country during a one year period, you would have calculated the
    Aproductivity rate
    Bgross domestic product
    Cbalance of trade
    DConsumer Price Index.

Answer: gross domestic product

  1. Which of the following actions would be associated with monetary policy?
    Aincreasing the money supply
    Bincreasing federal income taxes
    Cdecreasing federal income taxes
    Ddecreasing government spending

Answer:A, increasing the money supply

  1. Which of the following actions would be associated with fiscal policy?
    Aincreasing the money supply
    Bdecreasing the money supply
    Cdecreasing federal income taxes
    Dincreasing the level of interest rates

Answer:C, decreasing federal income taxes

  1. If you calculated the average level of output per worker per hour, you would have calculated
    Aproductivity
    Binflation
    Cprofit
    Dfactors of production

Answer: A, productivity

14.B.For a business, stakeholders represent

A. investors in the business

B. Lenders that have provided loans

C. Suppliers that have extended credit to the firm

D. Employees who work for the firm

E. All of the different people or groups who are affected in some way by the business

Answer: E

  1. The factory system was first introduced during what time period?
    Athe Colonial Period
    Bthe Industrial Revolution
    Cthe early 20th Century
    Dthe Great Depression

Answer:B, the Industrial Revolution

  1. In some segments of the plastics business, there are thousands of buyers of molded products as well as thousands of producers of these same products worldwide. Little differences exist between products, and none of the individual producers or sellers has the power to affect the price. This describes a market condition known as
    Apure competition
    Bmonopolistic competition
    Can oligopoly
    Dproduct differentiation

Answer:A, pure competition

  1. An economy that exhibits elements of both capitalism and socialism is called a
    Amarket economy
    Bmixed economy
    Ccommunistic economy
    Dcommand economy

Answer:B, mixed economy

  1. The ______is a monthly index that measures the changes in prices of approximately three hundred goods and services purchased by a typical consumer.
    Ainflation rate
    Bconsumer price index
    Cproductivity rate
    Dproducer price index

Answer:B, consumer price index

  1. The ______is an economic statistic that tracks the increase in prices of goods and services over a period of time. The measure is usually calculated on a monthly or annual basis.
    Abalance of trade
    BConsumer Price Index
    CProducer Price Index
    Dinflation rate

Answer:D, inflation rate

  1. The ______is an economic measure that tracks the increase and decrease in the average level of output per worker.
    AProducer Price Index
    BConsumer Price Index
    Cinflation rate
    Dproductivity rate

Answer:D, productivity rate

  1. .Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of

A. serious inflation eroding the purchasing power of his investment

B. being paid before the suppliers and employees are paid.

C. having the company lose money due to foreign competition

D. losing the money he has invested in the corporation and not receiving profits

E. the company giving all of the profits to charitable causes

Answer: D

  1. What three-word phrase describes a loose, subjective measure of how well-off an individual or society is, mainly in terms of want satisfaction through goods and services?

Answer:standard of living

  1. If Karl Marx is considered to be the “father of communism,” who is considered to be the “father of capitalism”?

Answer:Adam Smith

  1. What is the term used to describe what occurs when the federal government spends more in a fiscal year than it receives?

Answer:federal deficit (or deficit)

  1. What one-word term refers to a general rise in the level of prices?

Answer:inflation

  1. ______policies are government decisions that determine the size of the money supply and interest rates, while ______policies are government decisions on the level of government spending.

Answer:Monetary; fiscal

  1. If you add up all of the federal deficits from every year and subtract any federal surpluses, what term describes what you would have (assuming the total is negative)?

Answer:national debt

  1. What two economic systems are examples of command economies?

Answer:socialism and communism

  1. ______is an economic system in which individuals own and operate the majority of businesses that provide goods and services.

Answer:Capitalism

  1. One of the four factors of production is “natural resources.” List the remaining three factors of production.

Answer:labor, capital, and entrepreneurship

  1. One of the four factors of production is “natural resources.” List the remaining three factors of production.

Answer:labor, capital, and entrepreneurship

  1. What is the three-word term that describes the total value of a nation’s exports minus the total value of its imports over a specific period of time?

Answer:balance of trade

  1. Cuba and North Korea are most closely associated with which type of economic system?

Answer:communism

  1. Smart Question 2

Collectively, labor, capital, entrepreneurship, and natural resources are known as

Answer:factors of production

  1. What is the two-word term that describes the recurrence of periods of growth and recession in a nation’s economic activity?

Answer:business cycle

  1. The total value of a nation’s exports minus the value of its imports, over some period of time, is called
    Aexporting
    Bimporting
    Cbalance of trade
    Dtrade deficit

Answer: C, balance of trade

  1. Which of the following countries is NOT a member of NAFTA?
    ABrazil
    BMexico
    CUnited States
    DCanada

Answer: A, Brazil

  1. “New United Motor Manufacturing, Inc.” is a long-term commitment formed by Toyota and General Motors to make Chevrolet Novas and Toyota Tercels using Toyota’s engineering expertise and GM’s marketing know-how. This is an example of

Aa trading company
Ba strategic alliance
Ca joint venture
Dcountertrade

Answer:B, a strategic alliance

  1. Despite trade restrictions, international business is

AMoving slowly

BGrowing

CSlowing down

DDecreasing

Answer: B, growing

  1. The term that best describes “all business activities that involve exchanges across national borders” is
    Amarketing
    Binternational business
    Cmanagement
    Dexporting

Answer:B, international business

  1. Companies such as Ford, IBM, and General Electric that operate on a worldwide scale, without ties to any specific nation or region, are best described as
    Aexporters
    Bimporters
    Cmultinational enterprises
    Dtrading companies

Answer:C, multinational enterprises

  1. Selling and shipping raw materials or products to other nations is called
    Aimporting
    Bexporting
    Clicensing
    Ddumping

Answer: B, exporting

  1. The European Union, NAFTA, and OPEC are all examples of a(n)
    Aeconomic community
    Bworld trade organization
    Cmilitary alliance
    Dmultinational business

Answer: A, economic community

  1. A complete halt to trading with a particular nation in a particular product is called a(n)
    Aimport duty (tariff)
    Bimport quota
    Cboycott
    Dembargo

Answer:D, embargo

  1. The total flow of money into the country minus the total flow of money out of the country, over some period of time, is called
    Abalance of trade
    Bbalance of payments
    Ctrade deficit
    Dexporting

Answer:B, balance of payments

  1. An example of a cultural barrier for international businesses would include:

A. a tariff on a good coming into a country

B. extra paperwork or ‘red tape’

C. religious beliefs that conflict with your product

D. All of the above

Answer: C, religious beliefs that conflict with your product

  1. Which of the following is one of the typical consequences of trade restrictions?
    AGreater choices in consumer products
    BOverall increases in employment
    CHigher prices for consumers
    DLower national security

Answer: C, Higher prices for consumers

  1. Which of the following countries imports the most goods from the United States?
    AMexico
    BJapan
    CGermany
    DCanada

Answer:D, Canada (almost twice as much as any other nation)

  1. Which of the following is NOT a nontariff barrier?
    Aimport quota
    Bimport duty
    Cforeign-exchange control
    Dembargo

Answer:B, import duty (also called a tariff)

  1. For the past decade, the balance of payments in the United States has been
    Apositive
    Bnegative
    Cfluctuating (sometimes positive, sometimes negative)
    Dbalanced

Answer:B, negative

  1. When a country exports more than it imports, the country is said to have a(n)______balance of trade.
    Aabsolute
    Bcomparative
    Cfavorable
    Dunfavorable

Answer:C, favorable

  1. Farquar Company produces three-ring binders at a cost of $0.40/binder. Farquar recently began selling its binders in another country at $0.38/binder, seriously damaging local binder producers. This is an example of
    Aa nontarrif barrier
    Bdumping
    Ca tarrif
    Da bill of lading

Answer: B, dumping

  1. A company interested in entering a foreign market without any investment into the foreign market would most likely choose
    Alicensing
    Ba joint venture
    Ca strategic alliance
    Ddirect investment

Answer: A, licensing

  1. ______of the US is an independent agency of the US government whose function is to assist in financing the exports of American firms.
    AThe International Monetary Fund (IMF)
    BExport-Import Bank
    CMulti Development Bank (MDB)
    DWorld Trade Organization (WTO)

Answer:B, Export-Import Bank

  1. Nation A has a natural resource that is in greater quantities and less expensive to access than it is in any other country. This natural resource is important in many manufacturing processes worldwide. Apparently, Nation A has a(n)
    Acomparative advantage
    Babsolute advantage
    Cpositive balance of trade
    Dnegative balance of trade

Answer:B, absolute advantage

  1. Countertrade is a(n)
    Aimport duty on the goods of another country when a negative balance of trade exists
    Bimport duty on goods of another country when a positive balance of trade exists
    Cstrategy for dealing with currency devaluation

D international barter transaction

Answer:D, international barter transaction

  1. The US imports more than it exports to all of the following countries EXCEPT one. With which of the following countries does the US have a positive balance of payments?
    AChina
    BMexico
    CCanada
    DGermany

Answer:C, Canada

  1. Which of the following is NOT a frequently cited reason for imposing trade restrictions?
    ATo protect new or weak industries
    BTo lower prices for consumers
    CTo equalize a nation’s balance of payments
    DTo protect national security

Answer:B, To lower prices for consumers

  1. The ______was created at the end of World War II and dedicated to reducing or eliminating tariffs and other barriers to world trade.

Answer:General Agreement on Tariffs and Trade (GATT)

  1. Completed in 2001, the ______Round saw WTO members agree to reduce tariff and nontariff barriers, agriculture, services, and easing trade rules.

Answer:Doha

  1. ______is a three word term that is calculated by subtracting a nation’s total imports from the nation’s total exports.
  2. Answer:Balance of trade

Saudi Arabia purchased ten 747 jets from Boeing, but rather than pay for the jets in currency, Saudi Arabia paid for them in crude oil. This is a form of international barter called ______.

Answer:countertrade

  1. The text lists four reasons against the use of trade restrictions. What are two of these reasons?

Answer:Any two of the following

•Higher prices for consumers

•Restriction of consumers’ choices

•Misallocation of international resources

•Loss of jobs

  1. Besides “political considerations,” the text lists six reasons for the use of trade restrictions. What are three of those reasons?

Answer:Any three of the following

•To equalize a nation’s balance of payments

•To protect new or weak industries

•To protect national security

•To protect the health of citizens

•To retaliate for another nation’s trade restrictions

•To protect domestic jobs

  1. Overall describe the U.S. or the forecast for the U.S. economy using information from the scavenger hunt.
  1. Explain two ways that government uses fiscal or monetary policy to influence our economy.
  1. Pick two of the following economic measures and explain how they impact business in the United States as well as what they currently are in the U.S. For example, how does inflation impact business and what are inflation rates currently like in the US?