Business Ch 1-4 & 19 Practice Exam

75 Questions  I  By Mollyiskinder
Same as sheet handed out and gone over in class.

  
Changes are done, please start the quiz.


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1.  Businesses seek to earn a profit by providing goods and services to others.
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B.
2.  People living in the nation of Richland earn more money than people living in the nation of Povertiana. This will result in the citizens of Richland enjoying a higher standard of living than the citizens of Wagonia.
A.
B.
3.  Social responsibility is one of the five factors of production that contribute to the creation of wealth.
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B.
4.  Under the leadership of Jeff Bezos - the founder of Amazon.com, the company has had to make constant adjustments to the market it serves.
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B.
5.  E-commerce refers to the buying and selling of goods over the internet
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B.
6.  Microeconomics is the field of study that looks at the operation of the nation's economy as a whole.
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B.
7.  The evolution of the U.S. economy has involved a transition from an agricultural economy to a manufactuing economy to a service-based economy
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B.
8.  One reason given for the decline in the number of U.S. workers employed in manufacturing is that manufacturing firms in the U.S. have become more efficient.
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B.
9.  The study of how society decides how to employ resources to produce goods and services and to distribute them for consumption among various competing groups and individuals is known as sociology
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B.
10.  Capitalism and Communism are considered ideological opposites
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B.
11.  Communism is the foundation of the U.S. economic system.
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B.
12.  Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a given time
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B.
13.  In perfect competition, each firm produces a product that is clearly differentiated from products of other firms in the same market.
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B.
14.  Monica notices that just five companies produce over three-quarters of all soft drinks. She would be correct in describing the soft-drink industry as an oligopoly.
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15.  The major benefit of socialism is that it creates strong incentives to work hard and take the risks associated with starting and operating a business.
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B.
16.  Communism is an economic and political system in which the government makes almost all economic decisions and owns almost all of the major factors of production.
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B.
17.  Like many nations, the United States has what is called a mixed economy or a mixed market economy.
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18.  Any output produced by U.S. firms is included in the value of the GDP, even if the output was produced in a foreign country.
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B.
19.  To be classified as unemployed and counted in the nation's unemployment calculation, a person must be at least 21 years old and must have tried to find a job in the last 24 hours.
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B.
20.  GDP figures do not include the value of illegal activities.
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B.
21.  Frictional unemployment occurs because the economy is experiencing a recession.
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22.  Disinflation refers to a situation in which the overall level of prices in an economy is steadily falling.
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23.  The producer price index measures what is happening to prices at the wholesale level.
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B.
24.  The "textbook definition" of recession is an economy wherein GDP declines for two or more consecutive quarters.
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25.  Fiscal policy refers to the government's efforts to keep the economy stable by increasing or decreasing short-term interest rates.
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26.  Recessions are an inevitable part of business cycles.
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27.  Exporting involves the selling of products to another country.
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B.
28.  Monetary policy is the management of the money supply and interest rates and is under the control of the president and the congress
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B.
29.  One of the justifications for government intervention in the economy is that the accumulation of wealth in society is not always even.
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B.
30.  The US postal service is a good example of monopolistic competition
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B.
31.  NAFTA represents a trade agreement among the united states, mexico, and cuba.
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B.
32.  Critics of the Central American Free Trade Agreement (CAFTA) argue that NAFTA will cost american jobs, especially in the sugar and textile industries.
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B.
33.  All of the countries in Europe have now adopted the euro as their common currency.
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B.
34.  The best way for a compnay to go international is to form a foreign subsidiary since it minimizes risk for the company.
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B.
35.  The Teamster's union was one of the major supporters of the NAFTA provision allowing Mexican trucks access to US highways for the purposes of delivering goods from Mexico to the United States.
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36.  Ethical behavior requires more then merely following the law.
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B.
37.  In class we defined ethics as the rules and principles which guide right versus wrong conduct.
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38.  The first step in the "Four Questions" test of ethical behavior is asking "Will the action deny due process to someone?"
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39.  Designing an employee incentive program based on an unrealistic increase in sales could lead to unethical behavior.
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B.
40.  The case of R.J. Reynolds and its marketing of Downtown cigarettes was used in class as an example of a situation where an unethical decision could nonetheless be legal.
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41.  An ethical lapse can be used to describe a situation involving a conflict between two arguably valid positions.
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42.  The Sarbanes-Oxley Act (SOX), passed in 2002, now protects executives like JEff Skilling, former CEO of Enron, from being prosecuted for deceiving stockholders and others regarding the financial condition of their company.
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43.  Stocks represent shares of ownership in a company.
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44.  Bondholders are also owners of a company.
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45.  The P/E ratio of a stock is a measure of "performance" to "equity"
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46.  When acquiring funds through the sale of a bond, the business incurs a legal obligation to pay regular interest payments.
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47.  The first public offering of a company's stock is called an initial public offering or IPO.
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48.  If a stock's current price is $50 per share, it's earnings are $4 per share, and it is paying a dividend of $1.50 per share, the stock's price-to-earnings ratio is 12.5
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49.  Unlike trading on the NYSE, trading on the NASDAQ takes place on an electronic network.
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50.  The dividend yield on a stock equals its dividend divided by earnings.
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51.  Any activity which seeks to earn a profit by providing a good or service is known as a(n)
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C.
D.
52.  Starting a business always involves a
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53.  The amount of goods and services people can buy with the money they have is called their
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54.  Which of the following is a factor of production?
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55.  Which of the following is a basic right under capitalism?
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56.  A typical supply curve shows that the increase in the price of a good will cause the quantity supplied to
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D.
57.  The willingness and ability of sellers to provide goods and services for sale in a market is referred to as
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58.  The study of macroeconomics is
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59.  If the number of buyers increases, the demand curve will shift to the _______ and the price will _______.
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60.  Which of the following statements about demand curves is true?
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61.  An oligopoly is a market that is characterized by
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62.  Entrepreneurs have the most economic freedom in which type of economy?
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D.
63.  The four different types of market structure in a private enterprise system are
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64.  The four types of unemployment are
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65.  The European Union created a single monetary unit to replace the national currencies of some, but not all, of ties member nations. This common currency is known as the
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D.
66.  An example of a regional trading alliance is which one of the following?
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67.  A major concern voiced by US critics of the NAFTA is that it would result in:
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68.  The first stem of the four questions test when facing an ethical dilemma is to ask
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69.  The Securities and Exchange Act of 1934 created the
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70.  In terms of dollar value of stocks traded, which of the following stock markets is the largest?
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D.
71.  Which of the following stock market indexes is considered to be the broadest measure of overall stock market activity?
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D.
72.  Which agency has most of the federal regulatory responsibility over the securities market?
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73.  Your instructor recommends that you perform financial analysis for your compnay by
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74.  Compared to common stockholders, preferred stockholders have a ______ claim to asset and _______ claim to dividends.
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75.  With respect to the primary securities market, the term IPO stands for
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