An economy is both a social and financial system
True
Financial or social systems are not essential to the development of a strong economy
False
The study of economics focuses on how people, businesses, and governments choose to allocate resources.
True
A key economic goal is to provide a deep understanding of past choices that can be used to guide future business decisions.
True
An economic system is a structure for measuring gross domestic product.
False
Economists forecast business needs based on a deep understanding of past choices.
True
A surprisingly small number of key variables have a significant impact on the performance of the economy.
False
In the early 2000s the Federal Reserve decreased the interest rate in oder to decrease spending and discourage investment.
False
The $700 billion economic bailout package passed by congress in 2008 was an example of monetary policy.
False
The complexity of the economy makes economic forecasting an inexact process.
True
Broad economic trends in employment, inflation, and economic growth provide a context that has an important impact on businesses throughout the economy.
True
Microeconomics is the study of broad, economy-wide issues such as unemployment rate, gross domestic product and inflation
False
Macroeconomics condition impact day-to-day life by influencing variables such as the availability of jobs, the amount of take home pay households have available after paying taxes, and the buying power of those incomes.
True
The study of economics falls into two broad categories called meta-economics and econometrics.
False
Constant change is the most predictable economic force in the last few decades.
True
Luke is taking an economics class that focuses on decisions made by individual business firms and consumers. Luke's class is concerned with microeconomic issues.
True
Fiscal policy is the government's effort to influence the economy through taxation and spending decisions to encourage growth and boost employment while curbing inflation.
True
The twelve Federal Reserve Banks regional banks are privately owned by the member commercial banks in their individual districts.
True
Ben Bernanke is the current chairman of the Federal Reserve.
True
The Federal Reserve does not regulate banks; only state regulatory agencies perform this function.
False
The Federal Reserve provides banking services to member banks and is the central bank of the United States.
True
The Fed is headed by a 10-member Board of Governors.
False
The Federal Reserve Bank is in charge of both fiscal and monetary policy.
False
The government experiences a budget surplus when its tax revenue exceeds its expenditures.
True
The M1 money supply consists solely of currency (coins and paper money) issued by the government.
False
Capitalism is based on private ownership, economic freedom, and fair competition.
True
Capitalism places paramount importance on the need for the government to intervene in the economy to ensure a fair and equitable distribution of income.
False
Market equilibrium is the point at which the supply curve intersects the demand curve.
True
Federal law has made all types of monopolies illegal in the United States.
False
A typical supply curve shows that an increase in the price of a good will cause producers to decrease the quantity they supply.
False
Market equilibrium identifies the price at which quantity supplied is equal to quantity demanded.
True
Consumers will see prices fall when the quantity demanded exceeds quantity supplied.
False
Everlene's Bakery competes against many other bakeries in the same city. However, each bakery uses different recipes and each claims to offer better products than their rivals. For example, Everlene's advertises that it produces the "World's Best" chocola
False
In capitalism people strive to raise their standard of living. Businesses contribute to this goal by _____
Offering value to the consumer
A basic characteristic of _____ is that both producers and consumers are free to make their own economic decisions on many basic issues.
Capitalism
In _____ many firms compete by selling differentiated products.
Monopolistic competition
Which of the following industries operates under a market structure of monopolistic competition?
Clothing Industry
Firms in oligopolistic markets tend to
Avoid price competition whenever possible
Companies that attempt to monopolize a particular market are likely to violate the:
Sherman Anti-Trust Act of 1890
A core goal for successful businesses is to deliver value to customers while generating long term profits.
True
One personality trait shared by most entrepreneurs is the desire to avoid risk.
False
A firm experience a loss when its revenue is less than its expenses.
True
The quality of life is a narrow measure of social welfare that is based exclusively on the quantity and quality of goods and services produced by a society.
False
The standard of living reflects the quality and quantity of goods available to a nation's population.
True
One characteristic of all nonprofit organizations is that they do not earn any revenue.
False
Typically, socially responsible businesses act as advocates for the well being of the community.
True
The industrial revolution era is recognized for its technological advances.
True
During the entrepreneurship era, the government began to regulate business practices.
True
The production era is also referred to as the era of mass production.
False
During the industrial revolution the production process shifted from skilled artisans working in small workshops to semiskilled workers employed in huge factories.
True
The huge gains in production efficiency during the Industrial Revolution were mainly the result of changes in the nature of the production process that encouraged workers to take more pride and ownership in their work.
False
The marketing era came immediately before the entrepreneurship era.
False
Nonprofit organizations only focus on health, human services and religion.
False
A nonprofit organization's primary goal is to improve the quality of life in society.
True
Nonprofit organizations contribute to their region's economic stability and growth.
True
Nonprofit organizations can be economic magnets within a community.
True
Businesses and nonprofit organizations rely on factors of production to achieve their objectives.
True
The four factors of production are natural resources, capital, human resources, and entrepreneurship.
False
Natural resources are created by people as a factor of production and include agricultural products.
False
Companies use capital to produce goods and services.
True
Human resources include the physical, intellectual, and creative contributions of people in an economy.
True
In the context of factors of production, the term 'capital' means the money businesses use to finance their operations.
False
People can create natural resources by growing and harvesting agricultural products.
False
Using corn to create ethanol as an alternative fuel source will increase the price of corn in the grocery store.
True
Entrepreneurship is the resource that appears to be the most important determinant of economic growth.
True
There are three key dimensions to the business environment: financial, technical, and ethical.
False
The government in the United States has helped foster free enterprise and fair competition by reducing the risks of starting and running a business.
True
Demographics are measurable characteristics of a population.
True
Demographic factors that affect business include population size and density, age, gender, race, education, and income.
True
The economic dimension of the business environment includes US Government legislation that supports enforceable contracts.
True
Technology and global free trade have made it difficult to distinguish between individual economies worldwide.
True
According to a survey described in your textbook, approximately what percentage of American adults have taken steps towards entrepreneurship?
47%
Entrepreneurship is a growing trend in the US, and is likely to grow yet further for all of the following reasons EXCEPT:
The pace of change in the economy is likely to slow
Which of the following statements is most consistent with the marketing concept?
All aspects of a business organization should focus on the needs of the customer
The production era is recognized for:
Increasing specialized jobs, resulting in higher productivity and lower costs and prices
Businesses in the relationship era focus efforts on building long-term customer relationships. One key tool for business development during this era was utilizing:
Technology
The relationship between the price of a good or service and the expense of creating it is referred to as 'value'.
False
Speed-to-market is a business term which refers to the rate at which a new product moves from conception to commercialization.
True