Business Essentials 12th Edition Test Bank

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1CHAPTER 1THE CANADIAN BUSINESS SYSTEMMULTIPLECHOICEQUESTIONS.Choosetheonealternativethatbestcompletesthestatementoranswersthequestion.1)Whichofthefollowingstatementsiscorrectwithregardtotheopeningcaseentitled“OpportunitiesandChallengesintheMobilePhoneMarket"?A)RIMhasbeenverysuccessfulsofar,buttherearebigpotentialproblemsonthehorizon.B)ThereisnowageneralconsensusamongindustryexpertsthatRIMisgoingtobetheleadingcompanyinthemobilephonemarket.C)Todatecompetitionisnottoughinthemobilephonemarket.D)The"bringyourowndevice"trendhasjustaboutrunitscourse.E)Unlikeotherphonemakers,RIMhasnotbeenplaguedwithpatentinfringementlawsuits.Answer:ADiff:2Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit2)ProfitisA)whatremainsafterbusinessexpensesaresubtractedfrombusinessrevenues.B)equaltothemarketvalueofsharesinacompany.C)equaltototalrevenueminuscashexpenses.D)theamountofsalesminus50percent.E)doubletheamountthecompanypaysintaxes.Answer:ADiff:1Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit3)Thisweek,Jessica'sVarietyStorehadsalesof$4,000,employeeswerepaid$1,000,thecostofgoodswas$1,500,andrentwas$500.ProfitfortheweekwasA)$3,000.B)$1,000.C)$4,000.D)$2,000.E)$1,500.Answer:BDiff:2Skill:ApplicationObjective:1.1A-Heading:TheIdeaofBusinessandProfit4)HowareprovincialuniversitiesinCanadadifferentfrombusinessfirms?A)TheydonotseektomakeaprofitB)TheyarenotaffectedbytheglobalenvironmentC)TheirorganizationalboundariesarenarrowerthannormalD)TheydonotproducegoodsorservicesE)TheyaremoreimportanttosocietythanbusinessfirmsAnswer:ADiff:2Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit

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25)__________isthedifferencebetweenabusinessfirm'srevenuesanditsexpenses.A)CostofgoodssoldB)ProductivityC)SalesD)DebtE)ProfitAnswer:EDiff:1Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit6)ProfitisA)themarketvalueofsharesofstockinacompany.B)thelevelofexpensesdividedbythefirm’sassets.C)whatremainsafterbusinessexpensesaresubtractedfrombusinessrevenues.D)grossrevenueminustaxesacompanypays.E)grosssalesminustaxesacompanypays.Answer:CDiff:1Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit7)ExamplesofbusinessesincludeallofthefollowingexceptA)localsupermarkets.B)one-personbusinesses,likebarbershops.C)non-profitorganizations.D)largecorporationslikeCanadianPacificorAlcanAluminum.E)farms.Answer:CDiff:2Skill:ApplicationObjective:1.1A-Heading:TheIdeaofBusinessandProfit8)MostofthegoodsandservicesconsumedinCanadaareproducedbyA)countriesintheEuropeanUnion.B)businessesintheU.S.C)countriesofthePacificRim.D)theCanadiangovernment.E)businessfirms.Answer:EDiff:1Skill:ApplicationObjective:1.1A-Heading:TheIdeaofBusinessandProfit9)Not-for-profitorganizationsA)arecontentwithsmallprofits,whereasbusinessfirmswantlargeprofitsB)aremoreimportantthanbusinessfirms.C)usethefundstheygeneratefromgovernmentgrantsorthesaleofgoodsorservicestoprovideservicetothepublic.D)donotsellgoodsorservices.E)arenotallowedtooperateinthemanufacturingsector.Answer:CDiff:2

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3Skill:RecallObjective:1.1A-Heading:TheIdeaofBusinessandProfit10)Generallyspeaking,whichoneofthefactorsofproductionismostimportant?A)LandB)LabourC)CapitalD)EntrepreneurshipE)NoneoftheseAnswer:EDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld11)ThekeydifferencebetweeneconomicsystemsisthedifferentwaysinwhichtheymanageA)thefactorsofproduction.B)thetransportationofgoodswithintheirborders.C)governmentrulesandregulations.D)thepaymentofworkers.E)noneoftheseanswersisaccurate.Answer:ADiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld12)AneconomicsystemisA)anagreementbetweencountriesthatdealwithfreetrade.B)thewayinwhichanationallocatesitsresourcesamongitscitizens.C)agovernmentdecreethatrequirescertaingoodsandservicestobeprovided.D)alongstandingagreementbetweencitizensandgovernmentsonhowaneconomyisrun.E)alargegovernmentdepartmentthatoverseeshowtheeconomyisrunning.Answer:BDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld13)ThekeydifferencebetweeneconomicsystemsisA)thestructureofgovernment.B)themanagementofcapitalandlabour.C)themanagementofthefactorsofproduction.D)whocontrolsthebanks.E)whocontrolslargeindustrieslikesteelandautomanufacturing.Answer:CDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld14)Inacommandeconomy,thecentralgovernmentA)supportsfreeenterpriseineverywaypossibleB)allocatesallormostfactorsofproductionC)encouragescitizenstobuysharesofstockinsmallcompanies

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4D)keepsitscontrolactivitiestoaminimumE)buyssurplusesfromprivatesectorcompaniestokeeppricesfromfallingAnswer:BDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld15)Anation'seconomicsystemisitswayofA)allocatingresourcesamongitscitizens.B)collectingtaxes.C)managingthemoneysupply.D)regulatingbusinessfirmsbygovernmentlaws.E)supplementinglow-incomefamilies.Answer:ADiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld16)Intermsoffactorsofproduction,ImperialOil’scrudeoilreservesareanexampleof_______,whilemarketforecastsareanexampleof________.A)labour;entrepreneursB)information;labourC)capital;informationD)naturalresources;informationE)information;naturalresourcesAnswer:CDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld17)AllofthefollowingarefactorsofproductionexceptA)naturalresources.B)labour.C)capital.D)entrepreneurs.E)technology.Answer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld18)EntrepreneursareimportantbecausetheyA)makelotsofmoney.B)aregoodatmakingdecisions.C)takeriskstostartnewbusinesses.D)aregoodmanagers.E)arerich.Answer:CDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld19)Whichofthefollowingisanexampleofanaturalresource?A)ComputersoftwareB)Thementalandphysicalcapabilitiesofpeople

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5C)Land,water,andmineraldepositsD)MoneyE)TrainedengineersAnswer:CDiff:1Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld20)Elizabethwantstosetupaconsultingbusinessthatspecializesinmathematicalproblemsolving.Whichofthefollowingfactorsofproductionwouldsherequire?A)CapitalB)LabourC)InformationresourcesD)NaturalresourcesE)AlloftheseAnswer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld21)WhichfactorofproductionisImperialOiltryingtoincreasewhenitspendslargesumsofmoneyinanattempttofindnewoilfields?A)InformationB)EntrepreneurshipC)LabourD)CapitalE)NaturalresourcesAnswer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld22)"Embracetheopportunitiesandaccepttherisks"isaphrasethatbestcharacterizesthe__________attitude.A)entrepreneurialB)capitalistC)communistD)socialistE)mixedmarketAnswer:ADiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld23)SomethingthatwouldcontributedirectlytoimprovinglabourasafactorofproductionwouldbeA)findingnewoilreserves.B)bettereducationformoreofthepopulation.C)increasingthepurchasingpowerofemployees.D)programsdesignedtodecreaseunemployment.E)findingmoreefficientwaystoproduceproducts.Answer:BDiff:2Skill:ApplicationObjective:1.2

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6A-Heading:EconomicSystemsAroundtheWorld24)LabourincludesA)everyoneinabusiness.B)onlynon-unionizedemployees.C)onlyunionizedemployees.D)onlymanagers.E)onlyworkerswhodophysicalwork.Answer:ADiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld25)AfactorthatcontributesdirectlytoimprovinglabourasafactorofproductionisA)freetuitionatpost-secondaryeducationalinstitutions.B)increasedpurchasingpowerbyemployees.C)bettereducationformoreofthepopulation.D)programsthatdecreaseunemployment.E)creationofmoremanual-labourjobs.Answer:CDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld26)Naturalresources,asafactorofproductionformining,areapracticalconsiderationwhenaminingcompanyconsidersA)theeasewithwhichorecouldbemined.B)thenumberofminersavailabletominetheore.C)theamountofcapitalrequiredtobuildthemine.D)theprofitthatcouldbemadefromminingtheore.E)thenumberofcustomerswhowanttobuyore.Answer:ADiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld27)WhichofthefollowingiscorrectwithregardtotheEntrepreneurshipandNewVenturesboxentitled“AShrinetoWine”?A)GenuwineCellarshasverylittlecompetitionforitsproductsB)Genuwinehasresistedmovingsomeofitsoperationstolower-costcountriesC)GenuwinefoundthatgovernmentagencieswerenotveryhelpfulwithadviceonhowtosucceedD)Genuwinestartedbyfocusingonbuildingwinecellars,butnowmostofitsbusinessistheactualproductionofwineE)AllthesearecorrectAnswer:ADiff:2Skill:RecallObjective:1.2A-HeadingEconomicSystemsAroundtheWorld28)Whatisthedifferencebetweenacommandeconomyandamarketeconomy?A)Acommandeconomyisfoundonlyincommunistcountries,whileamarketeconomyisfoundonlyincapitalistcountriesB)Acommandeconomyismoreefficientthanamarketeconomy

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7C)Amarketeconomygivesgreater“lifesatisfaction”topeopleD)Acommandeconomyreliesoncentralizedgovernmentcontrolofthefactorsofproduction,whileinamarketeconomysupplyanddemanddetermineproductionandallocationdecisionsE)TherereallyarenosignificantdifferencesbetweenacommandeconomyandamarketeconomyAnswer:DDiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld29)AcommandeconomyisA)onewherethereisamixofgovernmentregulationandfreeenterprise.B)oneinwhichthemarketdirectswhatismadeandinwhatquantity.C)thetypeofeconomyfoundinAustraliaandNewZealand.D)oneinwhichthegovernmentcontrolsallormostfactorsofproduction.E)oneinwhichcustomersdemandwhatnewproductsaretobemade.Answer:DDiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld30)TheeconomicsysteminwhichproducersandconsumerscontrolproductionandallocationdecisionsthroughsupplyanddemandiscalledA)acentrallyplannedeconomy.B)privatization.C)amarketeconomy.D)communism.E)socialism.Answer:CDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld31)Whichcountryhasacommandeconomy?A)AustraliaB)JapanC)CanadaD)GermanyE)CubaAnswer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld32)Whichofthefollowingiscorrectwithregardtothecommunisteconomicsystem?A)ThecentralizedplanningemphasisoncapitalequipmentandmilitaryhardwarehascauseddeclinesinthepricesofconsumergoodsB)GovernmentownershipofthemeansofproductionisonlytemporaryC)Mostgovernment-operatedenterprisesareveryefficientbecauseofcentralplanningD)OverallproductionexpandsrapidlybecauseofcentralplanningE)ThegovernmentownsandoperatesallsourcesofproductionAnswer:EDiff:2

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8Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld33)Stanislavlivesinacountrywhereallthefactorsofproductionareownedbythegovernment.TheeconomicsysteminhiscountryisA)communism.B)capitalism.C)mixedmarket.D)socialism.E)itisnotpossibletotellwiththeinformationprovided.Answer:ADiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld34)Johnlivesinacountrywhereproducersandconsumerscontrolproduction,andwhereallocationdecisionsaremadethroughthemechanismofsupplyanddemand.Johnlivesinacountrywitha_________economy.A)privatizedB)socialistC)communistD)marketE)itisnotpossibletotellwiththeinformationgivenAnswer:DDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld35)AGlobeScanpollshowedthatthehighestsupportforthefreemarketeconomywasfoundinA)Japan.B)China.C)U.S.D)Canada.E)Brazil.Answer:BDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld36)Whatisthemajorsourceofcapitalforsmallbusinesses?A)BankloansB)SaleofsharesofstockC)PersonalinvestmentbyownersD)VenturecapitalfirmsE)ItisnotknownwhatthemajorsourceofcapitalisAnswer:CDiff:2Skill:RecallObjective:1.2A-HeadingEconomicSystemsAroundtheWorld37)AmajordrawbacktocommunismasaneconomicsystemisthatA)governmentcontrolofthefactorsofproductionisonlytemporary.B)peopledon’tlikecommunism.C)individualscontributeaccordingtotheirability.

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9D)individualsreceiveeconomicbenefitsaccordingtotheirneeds.E)productionofgoodsandservicesisinefficientbecauseofthelackofaprofitincentive.Answer:EDiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld38)Olgalivesinacountrywherethegovernmentownsandoperatesselectedmajorindustries.TheeconomicsysteminhercountryismostlikelytobeA)privatization.B)mixedmarket.C)deregulation.D)communism.E)socialism.Answer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld39)CommandeconomiesaremostlikelytobefoundinA)thenewlyemergingeconomiesofsoutheastAsia.B)communistandsocialistnations.C)westernEuropeancountries.D)Japan.E)CanadaandtheU.S.Answer:BDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld40)Aneconomythathasastrongcentralgovernmentthatcontrolslabour,capital,andnaturalresourcesandhasfewentrepreneursisaA)marketeconomy.B)commandeconomy.C)free-enterpriseeconomy.D)capitalisteconomy.E)oligopolisticeconomy.Answer:BDiff:1Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld41)CommunismandsocialismareA)basicformsofmarketeconomies.B)becomingmorepopular.C)extremeopposites.D)basicformsofcommandeconomies.E)identicalforms.Answer:DDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld

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1042)Saralivesinaneconomywherethegovernmentrestrictsthenumberofchildrenshecangivebirthto.Saralivesina________economy.A)communistB)backwardC)mixedmarketD)marketE)capitalistAnswer:ADiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld43)Mexicoallowsproducersandconsumerstomakeproductionandallocationdecisionsthroughthemechanismofsupplyanddemand.SuchasystemiscalledA)socialism.B)communism.C)privatization.D)nationalization.E)amarketeconomy.Answer:EDiff:1Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld44)Cuba,NorthKorea,andVietnamareall___________economies.A)marketB)socialistC)mercantileD)mixedE)communistAnswer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld45)SocialisteconomiesmaystifleeconomicgrowthbecauseA)managementpositionsinstate-controlledindustriesareoftenfilledonthebasisofpoliticalconsiderations.B)theyhavetoofewregulationsconcerningproductsafety.C)theyarefoundincountrieswherepeopledon’thavemanyskills.D)theyareusuallyfoundincountrieswithcoldclimates.E)theyencourageexcessiveunionizationofemployees.Answer:ADiff:3Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld46)AneconomicsystemthatpermitsprivateownershipandcontrolofsmallbusinessesbutwherethegovernmentcontrolslargecriticalindustriesisknownasA)amixedeconomy.B)socialism.C)communism.D)capitalism.E)mercantilism.

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11Answer:BDiff:1Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld47)Whichofthefollowingstatementsiscorrect?A)SwedenisthebestexampleofacountrywithapuresocialisteconomyB)AGlobeScanpollfoundthatthegreatestsupportforthefreemarketeconomywasfoundamongthecitizensofIndiaC)TheUnitedStatesisapurecapitalisteconomyD)ManycountriesintheworldhaveapurelycommunisteconomyE)Undersocialism,smallerbusinessesareoftenprivatelyownedAnswer:EDiff:3Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld48)SocialismisbestdescribedasA)akindofcommandeconomyinwhichthegovernmentownsandoperatesallindustries.B)akindofcommandeconomyinwhichthegovernmentownsandoperateslargecriticalindustries.C)aneconomythatisfreefromanyregulationorplanning.D)amarketeconomyinwhichmarketsdecidewhat,when,andhowmuchtoproduce.E)aneconomicsystemwithelementsofmarketeconomy,butnotaplannedeconomy.Answer:BDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld49)Socialismisbestdescribedas:A)aneconomicsystemwithelementsofbothaplannedeconomyandamarketeconomyB)akindofcommandeconomyinwhichthegovernmentownsandoperateslargecriticalindustriesC)amarketeconomyinwhichmarketsdecidewhat,when,andhowmuchtoproduceD)akindofcommandeconomyinwhichthegovernmentownsandoperatesallindustriesE)noneoftheseAnswer:BDiff:2Type:MCSkill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld50)Marketeconomieshaveallofthefollowingcharacteristics,exceptthattheyA)allowbusinessestochargewhatevertheywantfortheirproductsandservices.B)encourageentrepreneurshipbyofferingprofitsasanincentive.C)requiregovernmentinterventioninordertoprosper.D)relyonmarkets,notgovernments,todecidewhat,when,andforwhomtoproduce.

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12E)allowcustomersfreechoice.Answer:CDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld51)Canadaishometoa(n)________economy.A)mixedmarketB)oligopolisticC)socialistD)marketE)commandAnswer:ADiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld52)MarketeconomiesareconsideredbeneficialforsmallbusinessesbecausetheyA)providesmallbusinesseswithlotsofgovernmentassistanceandprotection.B)provideacentraleconomicplanwithinwhichsmallbusinessescaneasilyprosper.C)protectsmallbusinessesfromthepoweroflargecorporations.D)allowsmallbusinessestofail.E)allowthebusinesstodowhateveritwantsaslongasitdoesn’tbreakthelaw.Answer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld53)Inwhicheconomicsystemwillprofitmotivateentrepreneurstouseresourcesefficientlyandtoproducegoodsthatconsumerswant?A)AcentrallyplannedeconomyB)CommunismC)AmarketeconomyD)SocialismE)AbartereconomyAnswer:CDiff:1Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld54)JoseisfromGuatemala.HeisunsureaboutthenatureofbusinessinCanada.YoupointoutthatatypicalbusinessinCanadaoperatesthesameasatypicalbusinessinA)ThePeople'sRepublicofChina.B)Poland.C)Peru.D)England.E)Japan.Answer:DDiff:3Skill:ApplicationObjective:1.2

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13A-Heading:EconomicSystemsAroundtheWorld55)Whichofthefollowingiscorrectwithrespecttoinputandoutputmarkets?A)Intheinputmarket,firmssupplygoodsandservicesinresponsetodemandonthepartofhouseholdsB)Intheoutputmarket,firmsbuyresourcesfromhouseholds,whichthensupplythoseresourcesC)ConsumerbuyingpatternsprovideinformationthathelpscompaniesdecidewhichproductstoproduceD)ConsumersarerestrictedinthecompaniestheycanworkforE)InputandoutputmarketsexistonlyincommunistcountriesAnswer:CDiff:3Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld56)Whichofthefollowingiscorrectwithrespecttomixedmarketeconomies?A)TheyhavefeaturesthatarenotfoundineithercommandormarketeconomiesB)Asaresultofthefinancialcrisisof2008,thereisatrendtowardincreasedgovernmentregulationofbusinessinmixedmarketeconomiesC)VeryfewcountrieshavethistypeofsystemD)ThereisatrendtowardincreasedgovernmentownershipofbusinessinmixedmarketeconomiesE)ThemixedmarketeconomyisthebesttypeofeconomicsystemAnswer:BDiff:2Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld57)Theprocessofconvertinggovernment-ownedenterprisesintoenterprisesownedbyindividualsorprofitseekingfirmsisknownasA)entrepreneurship.B)deregulation.C)privatization.D)socialism.E)marketing.Answer:CDiff:1Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld58)ThefederalgovernmentsoldtheLesterB.PearsonInternationalAirportinTorontotoagroupofentrepreneurs,whichthensetuptheGreaterTorontoAirportsAuthority.ThissaleisanexampleofA)socialism.B)freedomofchoice.C)entrepreneurship.D)deregulation.E)privatization.Answer:EDiff:2Skill:ApplicationObjective:1.2A-Heading:EconomicSystemsAroundtheWorld

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1459)Whichofthefollowingiscorrectwithrespecttoprivatization?A)TheTNTPostGroupintheNetherlandshasbeenconvertedfromprivatetogovernmentownershipB)PrivatizationismostlikelytooccurincommunistcountriesC)Privatizationhasbeenageneraltrendduringthelastdecade,butsomecountriesaregoingintheoppositedirectionandpursuingnationalizationinsteadD)SeveralcompanieshavebeennationalizedinCanadainrecentyearsE)Therecessionof2008acceleratedthetrendtowardprivatizationAnswer:CDiff:3Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld60)TheprocessbywhichcontrolofacompanyisshiftedfromgovernmenttobusinessiscalledA)governmentbailouts.B)nationalization.C)socialism.D)mercantilism.E)privatization.Answer:EDiff:1Skill:RecallObjective:1.2A-Heading:EconomicSystemsAroundtheWorld61)TheroleofgovernmentinoureconomicsystemincludesallofthefollowingexceptA)customers.B)innovators.C)competitors.D)regulators.E)taxationagents.Answer:BDiff:2Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment62)Sandyisresponsibleformonitoringcompliancewithregulationsinhercompany.SheneedstoknowthattheimportantareasofgovernmentregulationareA)protectingcompetitionandupholdingenvironmentalregulations.B)protectingsocialgoals,upholdingenvironmentalregulations,andprotectingshareholderrights.C)protectingcompetition,protectingconsumers,andupholdingenvironmentalregulations.D)protectingcompetition,protectingconsumers,protectingsocialgoals,andprotectingtheenvironment.E)protectingshareholderrights,andfollowingbusinesslaw.Answer:DDiff:2Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment63)Madelineisresponsibleforansweringquestionsaboutwhathercompany

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15candoundertheCompetitionAct.WhichoneofthefollowingisallowedundertheAct?A)ThereturnofsurplusesbycreditunionstotheirmembersB)PricingproductsunreasonablylowtoeliminatecompetitionC)FormingamergeroramonopolythatlessenscompetitionD)Refusaltoselltoaretailerwho,inturn,sellstheproductsignificantlybelowthesuggestedretailpriceE)GivingselectiveallowancesandrebatestocoveradvertisingexpensestospecificretailersAnswer:ADiff:2Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment64)WhichofthefollowingiscorrectregardingtheCompetitionAct?A)TheActprohibitsagreementsbetweencompaniesthatreducecompetitionB)ThegovernmenthastoprovethatagreementsbetweencompaniesactuallyreducecompetitionC)RecentchangestotheActhavereducedfinesformisleadingmarketingpracticesbecauseithasbeenshownthatthesefinesdon'thaveanyeffectD)SurveysofbusinessexecutivesshowthattheythinktheCompetitionBureauisactuallyquitequickinapprovingordenyingmergerrequestsE)AlloftheseAnswer:ADiff:1Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment65)Whyareincometaxescalledprogressivetaxes?A)BecausepoorerpeoplespendproportionallymoreonnecessitiesB)Becausethemoreonemakes,agreaterproportionofadditionalamountsispaidinincometaxesC)Becausethemoreonemakes,thehighertheincometaxratethatisappliedtoone'sentireincomeD)BecausetheyincreasetotalconsumptionE)Becausethemoreoneprogressesinacompany,themoreonepaysinincometaxesAnswer:BDiff:2Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment66)Whyaresalestaxescalledregressivetaxes?A)BecausefoodanddrugsareoftenexemptB)Becausethemoreonemakes,thelowertherateofsalestaxthatisappliedtoone'spurchasesC)BecausepoorerpeoplepayahigherpercentageoftheirincomethanricherpeopleD)BecauseitappliestosalestaxesE)BecausetheydiscouragethepurchaseofsomeproductsAnswer:CDiff:3Skill:RecallObjective:1.2A-Heading:InteractionsBetweenBusinessandGovernment67)Incentiveprogramsaredesignedto

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