I have completed a practice exam, can some please review? And explain if wrong?
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I have completed a practice exam, can some please review? And explain if wrong?


1.      Individuals ownership of property is a key element in:

a.      socialism

b.      capitalism

c.      communism

d.      utopianism


2.      The standard of living is lower in Haiti. This means:

a.      is has a positive balance of trade

b.      is has higher wages than the U.S.

c.      the people that live there and are its citizens cannot afford to buy much

d.      it attracts entrepreneurs who are against risk (risk-averse)


3.      In order to enjoy the highest standard of living possible, comparative advantage theory states that all nations should strive to become self-sufficient

a.      True

b.      False

4.      Jobs tend to be more plentiful during the last 3 months (4th quarter) of the year when retailers earn over 75-90% of their profits, but more difficult to find in February after inventory is over and the stores go back to "business as usual". What kind of unemployment do people who work only in the fourth quarterly every year?

a.      Structural employment

b.      Seasonal employment

c.      Frictional employment

d.      Operational employment

5.      The two major systems are command economies and free-market economies. Which of the following are the two examples of a command economy?

a.      oligopoly and communism

b.      communism and mixed economies

c.      socialism and communism

d.      socialism and the free enterprise system


6.      The ____ is defined as the difference in value of a country's exports and imports over a period of time.

a.      balance of trade

b.      federal deficit

c.      balance of exchange

d.      balance of payments


7.      The government of Cuba owns or controls all of the basic industries in its economy. Cuba operates in which type of economic system?

a.      socialism

b.      communism

c.      capitalist

d.      mixed economy


8.      The relationship between the goods and services produces in a national each year and the inputs needed to produce them is known as:

a.      gross domestic product

b.      productivity

c.      consumer price index

d.      price-level change

9.      The most fundamental reason for the growth in world trade is probably due to:

a.      The creation of free trade areas

b.      The need for businesses to expand their markets

c.      Fluctuating exchange rates

d.      Cultural differences


10.      If a business fails to meet its responsibilities to its employees, which of the following is likely to occur?

a.      There is reduced employee turnover

b.      Employees believed it is easier to get ahead

c.      More jobs are created

d.      Employees do the minimum needed to get by


11.      A ____ is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.

a.      multinational cooperative

b.      joint venture

c.      franchisee transfer

d.      recruit affiliation

12.      Harry, Sirly, and Bo are in the midst of a heated discussion. As the chief operating officers of the U-Scream Ice Cream Corporation, they are reviewing the latest financial reports. Intense competition has results in deceased profits. Each of the three officers has his own view of how to reverse the current trend. Harry suggests cutting costs by firing union employees and hiring replacement workers at lower wages. He has directed the firm's attorney to find a loophole in the contract that will allow for this action. Sirly protest, stating that Harry's proposal is unethical and unfair. Sirly feels that every stakeholder should be treated equally, and that profiting at the expense of other is foolhardy. Bo, agreeing in part with Sirly, states, "We must be sensitive to all affected parties, but clearly our primary goal is to make a profit for our owners." In an attempt to resolve the conflict between Harry and Sirly, Bo offers and alternative suggestion: reduce the firm's charitable contributions until acceptable profit levels are realized. Sirly is outraged and remind Bo of the social responsibilities that U-Scream Ice Cream has to the community, environment, suppliers, employees, and stockholders.


If management adopts Bo's suggestion of reducing U-Scream Ice Cream's charitable donations until profits stabilize, the company will essentially reduce its ____.

a.      corporate citizenship

b.      nonprofit volunteerism

c.      corporate philanthropy

d.      RF factor

13.      Which of the following are organized for profit and provide goods and services?

a.      public schools

b.      churches

c.      governments

d.      businesses


14.      Patterns of prosperity, recession, depression, and recovery, as measured by Gross Domestic Product (GDP), are called:

a.      business standards

b.      business cycles

c.      cyclical adjustments

d.      economic yields


15.      The inflation rate in Alegria in 2005 was 1.9 percent, which was higher than the rate in 2004. This means that Alegerians in 2005:

a.      Saw a decline in gross domestic profit (GDP)

b.      Saw their purchasing power decrease slightly from what it was in 2004

c.      Experienced demand-push inflation

d.      Saw an economy recovery


16.      Businesses that operate in an environment where success or failure is determined by how well they matched and counter the offerings of competitors are operating under ____.

a.      The private enterprise system

b.      A monopoly

c.      Socialism

d.      A social democracy


17.      Which of the following statements is the most accurate observation regarding multinational corporations?

a.      Rather than manage manufacturing and marketing facilities overseas, most multinational corporations attempt to enter global markets by exporting domestically produced goods

b.      Most multinational corporation are small to medium - sized firms

c.      Because of political and economic concerns, most multinational corporations choose to ignore investment opportunities in China and Russia

d.      Only those firms with a physical presence in difference nations qualify as multinational corporations.


18.      Businesses today are socially responsible to four groups. These include all of the following EXCEPT:

a.      Customers

b.      Business analysts

c.      Investors

d.      Society and the environment


19.      Laura Collins, J.D. decided to open a private law practice to serve clients who are not wealthy enough to hire most lawyers, but not low enough income to qualify for legal aid of any type. Not only is she illustrating her social responsibility to her community, but she is also seeking ____ for taking the risk.

a.      Ethics

b.      Business

c.      Public acceptance

d.      Profits

20.      Economics is the study of:

a.      How countries monitor and control their financial institutions, such as banks

b.      How countries determines it's the fiscal policy

c.      How countries use resources to produce and distribute goods and services

d.      How government influences business

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