1.
The study of how wealth is created and distributed is called
A consumerism
B economics
C
D accounting business
Answer: B, economics
2.
The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs is called
A free enterprise
B economics
C
D business socialism
Answer: C, business
3.
A market with only one seller is called
A
B
C
D a monopoly an oligopoly monopolistic competition barter
Answer: A, a monopoly
4.
In ______, key industries are owned and controlled by the government, and people may choose their own occupations. Private ownership of business is permitted in varying degrees.
A a market economy
B
C capitalism communism
D socialism
Answer: D, socialism
5.
Sylvia Benda immigrated from eastern Europe and has started and runs her own business. Every day, she risks her time, effort, and money in an attempt to earn a profit. In performing these activities, Sylvia is a(n)
A consumer
B entrepreneur
C director
D business cycle
Answer: B, entrepreneur
6.
_________ is what remains after all business expenses have been deducted from sales revenue.
A
B
C
Gross margin
Assets
Marginal revenue
D Profit
Answer: D, Profit
7.
An industry in which there are few sellers, such as automobile manufacturing, can be described as a(n)
A
B monopoly natural monopoly
C
D oligopoly monopolistic competition
Answer: C, oligopoly

8.
In a country where people have lost confidence in the value of the local currency, they have begun to trade goods and services they produce for goods and services produced by others – without using money. Such a situation is described as
A
B
C
D an oligopoly barter monopolistic competition product differentiation
Answer: B, barter
9.
The quantity of a product that producers are willing to sell at each of various prices is called
A supply
B
C demand
D
Answer: A, supply the market price the equilibrium price
10.
The quantity of a product that buyers are willing to purchase at each of various prices is called
A supply
B
C demand the market price
D the equilibrium price
Answer: B, demand
11.
If you added up the total dollar value of all goods and services produced by everyone in a country during a one year period, you would have calculated the
A
B productivity rate gross domestic product
C
D balance of trade
Consumer Price Index.
Answer: gross domestic product
12.
Which of the following actions would be associated with monetary policy?
A
B
C increasing the money supply increasing federal income taxes decreasing federal income taxes
D decreasing government spending
Answer: A, increasing the money supply
13.
Which of the following actions would be associated with fiscal policy?
A increasing the money supply
B
C
D decreasing the money supply decreasing federal income taxes increasing the level of interest rates
Answer: C, decreasing federal income taxes
14.
If you calculated the average level of output per worker per hour, you would have calculated
A
B productivity inflation
C
D profit factors of production
Answer: A, productivity

14.B. For a business, stakeholders represent
A. investors in the business
B. Lenders that have provided loans
C. Suppliers that have extended credit to the firm
D. Employees who work for the firm
E. All of the different people or groups who are affected in some way by the business
Answer: E
15.
The factory system was first introduced during what time period?
A the Colonial Period
B
C the Industrial Revolution the early 20 th Century
D the Great Depression
Answer: B, the Industrial Revolution
16.
In some segments of the plastics business, there are thousands of buyers of molded products as well as thousands of producers of these same products worldwide. Little differences exist between products, and none of the individual producers or sellers has the power to affect the price. This describes a market condition known as
A
B
C
D pure competition monopolistic competition an oligopoly product differentiation
Answer: A, pure competition
17.
An economy that exhibits elements of both capitalism and socialism is called a
A
B
C
D market economy mixed economy communistic economy command economy
Answer: B, mixed economy
18.
The __________ is a monthly index that measures the changes in prices of approximately three hundred goods and services purchased by a typical consumer.
A
B
C
D inflation rate consumer price index productivity rate producer price index
Answer: B, consumer price index
19.
The _________ is an economic statistic that tracks the increase in prices of goods and services over a period of time. The measure is usually calculated on a monthly or annual basis.
A
B
C
D balance of trade
Consumer Price Index
Producer Price Index inflation rate
Answer: D, inflation rate

20.
The _________ is an economic measure that tracks the increase and decrease in the average level of output per worker.
A Producer Price Index
B
C
D
Consumer Price Index inflation rate productivity rate
Answer: D, productivity rate
21.
.Andrew Cooper decides to become a part owner of a corporation. As a part owner, he expects to receive a profit as payment because he has assumed the risk of
A. serious inflation eroding the purchasing power of his investment
B. being paid before the suppliers and employees are paid.
C. having the company lose money due to foreign competition
D. losing the money he has invested in the corporation and not receiving profits
E. the company giving all of the profits to charitable causes
Answer: D
22.
What three-word phrase describes a loose, subjective measure of how well-off an individual or society is, mainly in terms of want satisfaction through goods and services?
Answer: standard of living
23.
If Karl Marx is considered to be the “father of communism,” who is considered to be the “father of capitalism”?
Answer: Adam Smith
24.
What is the term used to describe what occurs when the federal government spends more in a fiscal year than it receives?
Answer: federal deficit (or deficit)
25.
What one-word term refers to a general rise in the level of prices?
Answer: inflation
26.
__________ policies are government decisions that determine the size of the money supply and interest rates, while __________ policies are government decisions on the level of government spending.
Answer: Monetary; fiscal
27.
If you add up all of the federal deficits from every year and subtract any federal surpluses, what term describes what you would have (assuming the total is negative)?
Answer: national debt
28.
What two economic systems are examples of command economies?
Answer: socialism and communism
29.
____________ is an economic system in which individuals own and operate the majority of businesses that provide goods and services.
Answer: Capitalism
30.
One of the four factors of production is “natural resources.” List the remaining three factors of production.
Answer: labor, capital, and entrepreneurship
31.
One of the four factors of production is “natural resources.” List the remaining three factors of production.
Answer: labor, capital, and entrepreneurship
32.
What is the three-word term that describes the total value of a nation’s exports minus the total value of its imports over a specific period of time?
Answer: balance of trade

33.
Cuba and North Korea are most closely associated with which type of economic system?
Answer: communism
34.
Smart Question 2
Collectively, labor, capital, entrepreneurship, and natural resources are known as
Answer: factors of production
35.
What is the two-word term that describes the recurrence of periods of growth and recession in a nation’s economic activity?
Answer: business cycle
36.
The total value of a nation’s exports minus the value of its imports, over some period of time, is called
A
B
C
D exporting importing balance of trade trade deficit
Answer: C, balance of trade
37.
Which of the following countries is NOT a member of NAFTA?
A
B
Brazil
Mexico
C
D
United States
Canada
Answer: A, Brazil
38.
“New United Motor Manufacturing, Inc.” is a long-term commitment formed by Toyota and
General Motors to make Chevrolet Novas and Toyota Tercels using Toyota’s engineering expertise and GM’s marketing know-how. This is an example of
A a trading company
B a strategic alliance
C a joint venture
D countertrade
Answer: B, a strategic alliance
39.
Despite trade restrictions, international business is
A Moving slowly
B
C
D
Growing
Slowing down
Decreas ing
Answer: B, growing
40.
The term that best describes “all business activities that involve exchanges across national borders” is
A
B
C
D marketing international business management exporting
Answer: B, international business

41.
Companies such as Ford, IBM, and General Electric that operate on a worldwide scale, without ties to any specific nation or region, are best described as
A exporters
B
C importers multinational enterprises
D trading companies
Answer: C, multinational enterprises
42.
Selling and shipping raw materials or products to other nations is called
A importing
B exporting
C
D licensing dumping
Answer: B, exporting
43.
The European Union, NAFTA, and OPEC are all examples of a(n)
A
B
C
D economic community world trade organization military alliance multinational business
Answer: A, economic community
44.
A complete halt to trading with a particular nation in a particular product is called a(n)
A
B import duty (tariff) import quota
C
D boycott embargo
Answer: D, embargo
45.
The total flow of money into the country minus the total flow of money out of the country, over some period of time, is called
A
B balance of trade balance of payments
C
D trade deficit exporting
Answer: B, balance of payments
46.
An example of a cultural barrier for international businesses would include:
A. a tariff on a good coming into a country
B. extra paperwork or ‘red tape’
C. religious beliefs that conflict with your product
D. All of the above
Answer: C, religious beliefs that conflict with your product
47.
Which of the following is one of the typical consequences of trade restrictions?
A Greater choices in consumer products
B
C
Overall increases in employment
Higher prices for consumers
D Lower national security
Answer: C, Higher prices for consumers

48.
Which of the following countries imports the most goods from the United States?
A Mexico
B Japan
C
D
Germany
Canada
Answer: D, Canada (almost twice as much as any other nation)
49.
Which of the following is NOT a nontariff barrier?
A
B
C import quota import duty foreign-exchange control
D embargo
Answer: B, import duty (also called a tariff)
50.
For the past decade, the balance of payments in the United States has been
A positive
B
C
D negative fluctuating (sometimes positive, sometimes negative) balanced
Answer: B, negative
51.
When a country exports more than it imports, the country is said to have a(n)_________ balance of trade.
A
B absolute comparative
C
D favorable unfavorable
Answer: C, favorable
52.
Farquar Company produces three-ring binders at a cost of $0.40/binder. Farquar recently began selling its binders in another country at $0.38/binder, seriously damaging local binder producers.
This is an example of
A
B a nontarrif barrier dumping
C a tarrif
D a bill of lading
Answer: B, dumping
53.
A company interested in entering a foreign market without any investment into the foreign market would most likely choose
A
B
C licensing a joint venture a strategic alliance
D direct investment
Answer: A, licensing
54.
__________ of the US is an independent agency of the US government whose function is to assist in financing the exports of American firms.
A
B
The International Monetary Fund (IMF)
Export-Import Bank
C
D
Multi Development Bank (MDB)
World Trade Organization (WTO)
Answer: B, Export-Import Bank

55.
Nation A has a natural resource that is in greater quantities and less expensive to access than it is in any other country. This natural resource is important in many manufacturing processes worldwide. Apparently, Nation A has a(n)
A
B
C
D comparative advantage absolute advantage positive balance of trade negative balance of trade
Answer: B, absolute advantage
56.
Countertrade is a(n)
A import duty on the goods of another country when a negative balance of trade exists
B
C import duty on goods of another country when a positive balance of trade exists strategy for dealing with currency devaluation
D international barter transaction
Answer: D, international barter transaction
57.
The US imports more than it exports to all of the following countries EXCEPT one. With which of the following countries does the US have a positive balance of payments?
A
B
China
Mexico
C
D
Answer: C, Canada
58.
Which of the following is NOT a frequently cited reason for imposing trade restrictions?
A
B
Canada
Germany
To protect new or weak industries
To lower prices for consumers
C
D
To equalize a nation’s balance of payments
To protect national security
Answer: B, To lower prices for consumers
59.
The ___________ was created at the end of World War II and dedicated to reducing or eliminating tariffs and other barriers to world trade.
Answer: General Agreement on Tariffs and Trade (GATT)
60.
Completed in 2001, the ________ Round saw WTO members agree to reduce tariff and nontariff barriers, agriculture, services, and easing trade rules.
Answer: Doha
61.
___________ is a three word term that is calculated by subtracting a nation’s total imports from the nation’s total exports.
62.
Answer: Balance of trade
Saudi Arabia purchased ten 747 jets from Boeing, but rather than pay for the jets in currency, Saudi
Arabia paid for them in crude oil. This is a form of international barter called ________.
Answer: countertrade
63.
The text lists four reasons against the use of trade restrictions. What are two of these reasons?
Answer: Any two of the following
• Higher prices for consumers
• Restriction of consumers’ choices
• Misallocation of international resources
• Loss of jobs

64.
Besides “political considerations,” the text lists six reasons for the use of trade restrictions.
What are three of those reasons?
Answer: Any three of the following
• To equalize a nation’s balance of payments
• To protect new or weak industries
• To protect national security
• To protect the health of citizens
• To retaliate for another nation’s trade restrictions
• To protect domestic jobs
65.
Overall describe the U.S. or the forecast for the U.S. economy using information from the scavenger hunt.
66.
Explain two ways that government uses fiscal or monetary policy to influence our economy.
67.
Pick two of the following economic measures and explain how they impact business in the
United States as well as what they currently are in the U.S. For example, how does inflation impact business and what are inflation rates currently like in the US?