Business Final Pt. 1

The consumer price index (CPI)

• is a quarterly index that producers receive for their finished goods.

• measures increases or decreases in the level of worker performance.

• is the price of metals, lumber, and raw materials.

• measures prices paid during periods of deflation.

• is a monthly index that tracks the prices paid by consumers.

A system where the basic economic questions are determined, at least to some degree, through centralized government planning is referred to as a ____ economy.

• command

• capitalistic

• mixed

• laissez-faire

• communal

The business cycle has two phases;

• expansion and trough.

• recession and trough.

• recession and expansion.

• expansion and peak

• peak and trought

Growth in the standard of living measured by the increase in

• the Rule of 79

• employment

• real GDP

• real GDP per person

• consumption

Items bought by businesses to help produce other goods and services are called

• government goods and services

• consumption goods and services

• exports of goods and services

• productive goods

• capital goods

Which of the following is NOT considered one of the factors of production?

• capital

• technology

• entrepreneurship

• land

• labor

The fundamental force that generates gain from international trade is

• comparative advantage

• the need for more goods and services

• absolute advantage

• the existence of tariffs

• the sea rule

Real GDP measures the value of goods and services produced in a given year using

• base year prices

• future prices

• prices of that same year

• no prices

• government approved prices

Investment is defined as the purchase of

• financial assets and inventories only

• new capital goods and additions to inventories

• new capital goods but not additions to inventories

• additions to inventories only

• any financial asset only

One reason why water is cheap compared to diamonds is because

• Diamonds are relatively less scarce

• Water is relatively less scarce

• Water is not that important

• Diamonds are more important

• Can not be determined