Business Essentials QUIZ 1 - Part 1

Inflation results in increased purchasing power for the consumer.

• FALSE

• TRUE

Which term refers to the total value of all goods and services produced within a given period by a national economy?

• standard of living

• aggregate output

• gross domestic product

• gross national produce

• purchasing power parity

Which of the following are groups of small investors seeking to make profits on companies with rapid growth potential?

• community banks

• venture capital companies

• equity managers

• government securities dealers

• stock brokers

Which economic system emphasizes the private ownership of most factors of production?

• socialism

• communism

• capitalism

• Marxism

• federalism

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.

• There is a combined response from other firms to stabilize prices.

Which of the following does NOT represent a degree of competition in a private enterprise system?

• oligopoly

• socialism

• monopoly

• perfect competition

• monopolistic competition

Which kind of strategy takes place at the level of the product line and focuses on a firm's competitive position?

• functional

• business

• local

• fundamental

• environmental

Which scenario describes an economic environment that is most suitable for an importing-exporting opportunity?

• Country X invests primarily in its textile industry while Country Y focuses on producing high-yield crops.

• Company A is willing to provide parts used in the production of equipment by Company B in exchange for discounts on manufacturing equipment.

• The southern region of Country X over-produces a wide range of produce, while few crops can be efficiently grown in the northern region.

• Company A and Company B are exploring the possibility of a joint venture to provide goods to Country X.

• Country X is looking to invest in foreign markets and Country Y currently has a large trade deficit.

What is the major drawback of accepting venture capital?

• sharing company control

• having to pay high interest rates

• limiting expansion

• facing a short repayment period

• having to write a proposal

Which type of business is legally considered a separate entity from its owners and is liable for its own debts?

• sole proprietorship

• corporation

• limited partnership

• cooperative

• general partnership