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Home
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Business Essentials
Business Essentials MCQs
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Which environment is NOT an important dimension of a business organization's external environment?
The political-legal environment
The sociocultural environment
The technological environment
The corporate cultural environment
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What is profit?
Total money taken in by a corporation
Increases in income from year to year
Increases in a corporation's stock price
Revenue generated by goods and services
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What is the environment where a firm conducts business known as?
Global business environment
Economic environment
Domestic business environment
Technological environment
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Factors such as international trade agreements, economic conditions, and political unrest will have the greatest impact on what type of business envir...
Global business environment
Economic environment
Domestic business environment
Technological environment
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What is the general term for resources used by a business to produce a good or service referred to as?
Labor
Human Resources
Human capital
Factors of production
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What term denotes a nation's basis for allocating its resources among its citizens?
Capital structure
Economic system
Ownership processes
Distribution network
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What is the process for converting government enterprises into individually owned firms known as?
Production allocation
Privatization
Entrepreneurship
Demand assessment
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What is the term for the physical and intellectual contributions of people while engaged in the production of goods and services?
Human resources
Working capital
Physical resources
Planned resources
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Who is the person who accepts the risks and opportunities inherent in a new business opportunity?
Capital managers
Entrepreneurs
Human resources
Home country economic systems managers
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What factor of production is used to generate forecasts based on specialized knowledge and economic data?
Economic resources
Labor
Information resources
Entrepreneurs
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When making decisions about production and allocation, which type of system depends on individual producers and consumers to create a combination of s...
Planned economy
Communism
Private economy
Market economy
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The idea that individuals would contribute according to their abilities and receive benefits according to their needs supports which type of economy? ...
Market economy
Socialist based economy
Communist based economy
Capitalist market economy
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Which of the following best explains the difference between a market economy and a planned economy?
In a planned economy, consumers have little choice in where they work or what they purchase or pay.
In a market economy, consumers must pay what the market demands.
Capitalism is the root of a planned economy.
Market economies are also known as mixed market economies.
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What type of economy is the United States reflective of?
Planned
Mixed
Market
Private
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What does a planned economy rely on a centralized government to do?
Support free enterprise in every way possible
Allocate all or most factors of production
Encourage citizens to buy shares of stock in small companies
Keep its control activities to a minimum
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Which economic system emphasizes the private ownership of most factors of production?
Socialism
Communism
Capitalism
Marxism
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In which type of economy do the individual producer and consumer control production through supply and demand?
Planned
Communist
Market
Socialist
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What is the point at which the supply curve and the demand curve intersect on a graph?
Equilibrium price
Decision point
Surplus price
Perfect price
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What is the price at which the quantity of goods demanded and the quantity of goods supplied are equal?
The going rate
The margin rate
The market price
The optimum price
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What occurs when the quantity demanded exceeds the quantity supplied?
Demand deficit
Surplus
Equilibrium point
Shortage
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What marks the key difference between economic systems?
The way the factors of production are managed
The way goods are transported within their borders
The way rules and regulations are legislated
The way workers are relocated to different regions
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What is the primary force that determines what a firm buys and sells?
Laws of supply and demand
The demand and supply schedule
Economic resources
Equilibrium price
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What is the willingness and ability of producers to offer a good for sale referred to as?
Private enterprise
Supply
Free market economy
Law of supply
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What takes place when buyers purchase more of a product when the price drops, and less when the price increases?
Demand
Laws of supply
Laws of demand
Degree of competition
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What can be used to determine relationships among different levels of demand and supply, based on price?
Market economies
Degrees of competition
Surplus to shortage relationships
Demand and supply curves
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Graphically, what has been achieved when price of goods demanded is equal to the quantity of goods supplied?
Supply curve optimization
Potential for surplus
Freedom of choice opportunities
Equilibrium price
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What is the basis for a market economy?
The ability to pursue an interest with minimal government restriction.
The ability to limit profits on competitors based on government restriction.
The ability to offer a good or service at a variety of price points.
A limitation on the number of competitors the government will allow within a specific geographic region.
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Which of the following represents the ownership of resources used in a private enterprise system?
Freedom of choice
Private property rights
Increased profits
Limited competition
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Which of the following would lead some to become an entrepreneur and influence the choice of goods or services to produce?
Competition
Profit
Freedom of choice
Government regulation
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What is needed to gain a competitive advantage over competitors?
The ability to produce goods and services and sell those at a fixed profit
The ability to produce goods and services and sell those at a high profit
The ability to produce goods or services efficiently and at a reasonable profit
The ability to leverage the internet to sell in a global marketplace
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Which of the following does NOT fall into the degrees of competition continuum?
Perfect competition
Monopolistic competition
Competitive advantage
Oligopoly
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When there are many small firms in a specific industry, what is likely to occur?
Competitive advantage
An oligopoly
Private enterprise
Perfect competition
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What is created when one company is able to supply all the goods or services needed by the marketplace?
Communism
Natural monopolies
Marketplace shifts
Monopolistic competition
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Which of the following is one of the elements required in private enterprise?
Adequate representation in the government
Freedom from foreign competition
The opportunity for market leadership
The right to ownership of property
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In perfect competition, which of the following conditions must prevail?
All firms must adhere to cost and pricing standards.
The number of firms in the industry must be limited.
It is relatively difficult to enter the industry.
All firms in a given industry must be small.
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How does monopolistic competition differ from perfect competition?
There are more sellers in a market characterized by monopolistic competition.
It is easier for sellers to enter a market or industry characterized by monopolistic competition.
In a perfectly competitive market, products are more dissimilar.
In a market characterized by monopolistic competition, individual firms have some control over price.
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In an oligopoly, when one firm reduces its prices, how do other sellers react?
There is no reaction from other firms to change their prices.
Other firms reduce their prices also, usually quite quickly.
Other firms may reduce their prices, but usually gradually.
Other firms are not usually aware that price has changed.
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Which of the following is the MOST likely pricing approach for a monopoly?
Charge customers whatever you please.
Give customers a real bargain on price.
Charge a price that will not cause consumer demand to drop.
Undercut the prices of the competition.
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What is the term used to describe a market condition where buyers are able to satisfy the demand of the consumer, yet have some product remain unsold?...
Surplus
Stoppage
Shortage
Demand deficit
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Where can a firm find statistical information on the strength and performance of an economy?
Aggregate output
Business cycle reports
Economic indicators
Standard of living indexes
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National economies, regardless of industry, are measured through what?
Standard of living
Aggregate output
Gross domestic product
Output per capita
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When a new product has high demand in the market, how should a company react?
Increase the supply of the product.
Decrease the supply of the product.
Reduce the price of the product.
Maintain the current supply until demand falls.
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What term do economists use for the pattern of short-term expansions and contractions in the economy?
Business cycle
Aggregate output
Standard of living
Consumer price index
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Which indicator refers to the total quantity of goods and services produced by an economic system during a given period?
The business cycle
Aggregate output
Gross domestic product
The consumer price index
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What type of policy is made up of fiscal and monetary policy?
Trade
Employment
Stabilization
Tax
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How would supply affect the aggregate output of an economy?
Supply would decrease aggregate output.
Increases in both would cause inflation.
Aggregate output would grow as supply grows.
Supply would have no direct effect on aggregate output.
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Which of the following BEST describes what the consumer price index is used to indicate?
The average wage rate for a given region
The economic performance of key consumer product companies
The changes in the cost of consumer products over time
The percentage of consumers in the total population looking for work
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Which of the following is a likely cause of increased prices for products, decreased purchasing power, and decreased profit margins?
Low unemployment
Stagnant wages
Declining living standards
Cyclical inflation
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Which term refers to the pattern of short-term ups and downs in an economy?
Aggregate output
Business cycle
Standard of living
Balance of payments
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Which term refers to the total quantity and quality of goods and services that people living in an economic system can purchase?
Business cycle supply
Demand and supply schedule
Standard of living
aggregate output
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Which term refers to the total value of all goods and services produced within a given period by a national economy through domestic factors of produc...
Standard of living
Aggregate output
Gross domestic product
Gross national product
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Which of the following measures indicates the prices of typical products purchased by American consumers living in urban areas?
GDP per capita
Standard of living
Consumer price index
Purchasing power parity
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What does productivity measure?
The total value of all goods and services produced by a national economy
How much a system produces with the resources needed to produce it
How much output is necessary to produce a certain level of demand
The standard of living relative to purchasing power parity
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What is the economic condition characterized by widespread increased prices without increased purchasing power?
Unemployment
Inflation
Expansion
Deflation
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What is the condition in an economic system in which the amount of money available and the number of goods and services produced are growing at about ...
Unemployment
Stability
Deflation
Inflation
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Which of the following BEST gives the meaning of the term gross domestic product?
Total quantity of goods and services produced by an economic system
Total quantity of goods that a country's citizens can purchase with the currency used in their economic system
Conditions of the economic system in which an organization operates
Total value of all goods and services produced within a given period by a national economy through domestic factors of production
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Which of the following BEST describes nominal GDP?
Total quantity of goods and services produced by an economic system
Total value of all goods and services produced within a given period by a national economy through domestic factors of production, measured in current dollars or with all components valued at current prices
Total value of all goods and services produced within a given period by a national economy regardless of where the factors of production are located
Total value of all goods and services produced within a given period by a national economy through domestic factors of production, adjusted to account for changes in currency values and price changes
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Which is the BEST explanation for why standard of living only increases through productivity?
The more goods that are available, the lower prices will be.
More goods are available without having to come by additional resources.
Productivity increases the money supply in an economy.
Purchasing power increases when there is more consumer choice.
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Why would a government MOST likely be concerned about its country carrying a trade deficit?
A trade deficit means that the country's productivity is low.
A trade deficit means local companies do not have enough competition.
A trade deficit ties up money that could be used for economic growth.
A trade deficit decreases demand for goods overall.
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If, in the long run, international trade improves the standards of living in participating countries, why might some countries want to place trade bar...
Imported products compete with domestic products and thus put pressure on local business.
Imported products are usually not as good quality as domestically made products.
Generating government revenue is often more economically valuable than free trade.
This is necessary to keep a country's currency strong.
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Which of the following is an indication of national economic growth, shown by measuring aggregate output?
Gross domestic product
Standard of living
Economic indicators
Gross national product
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When gross domestic product increases, what is the outcome for economic growth?
Aggregate output will increase.
The nation will experience a slowdown in growth.
Aggregate output will decrease.
Growth will remain steady when compared to developing nations.
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When economists measure gross national product, what is being measured within a specific time period, regardless of location?
The aggregate output
The economic growth of the nation
The growth of domestic factors of production
The total value of all goods and services
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Why is gross national product (GNP) considered to be a less valuable indicator of domestic economic performance than gross domestic product (GDP)?
GNP does not consider where the economic performance was located.
GNP only considers economic performance within the United States.
GNP is not adjusted for inflation.
GNP does not consider currency fluctuations at the time of product purchase.
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The amount of money that a government owes its creditors is referred to as that country's
GDP.
national debt.
consumer price index.
inflation rate.
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Which of the following supports the idea that the prices of similar products in different countries should be about the same?
Standard of living
Real growth rate
Purchasing power parity
Trade deficit
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Why is it important to calculate purchasing power parity in the global market?
It indicates how much consumers will pay for goods and services.
It determines interest rates on short-term debt.
It identifies how much the nominal GDP should be adjusted.
It determines standards of living across the globe.
