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MCQ Chapter 4
MCQ Chapter 4
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26) Businesspeople who accept the risks and opportunities involved in creating and operating
new business ventures are called ________.
A) managers
B) supervisors
C) entrepreneurs
D) angel investors
27) In ________ cultures, economic systems tend to provide incentives and rewards for a
person's private business initiatives.
A) individualist
B) high uncertainty avoidance
C) feminine
D) large power distance
28) The ________ system of a country consists of the structure and processes it uses to allocate
its resources and to conduct its commercial activities.
A) political
B) economic
C) social
D) cultural
29) A ________ economy is a system in which the government owns a nation's land, factories,
and other economic resources, and schedules nearly all economic activities.
A) mixed
B) market
C) centrally planned
D) laissez-faire
33) Who among the following popularized the idea of central economic planning in the
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nineteenth century?
A) Frederick Taylor
B) Karl Marx
C) Peter Drucker
D) Henry Fayol
35) Which of the following disagrees with the concept of centrally planned economies?
A) At the time of their collapse, standards of living in most centrally planned economies were at
or above those of market economies.
B) Basic necessities were often not provided to citizens in centrally planned economies.
C) Underground economies for goods and services thrived in most centrally planned economies.
D) Prices on the black market were much higher than the official prices set by governments.
36) Which of the following emerged during the failure of centrally planned economic systems?
A) black markets
B) public markets
C) free enterprise system
D) market economies
37) Which of the following is an important factor in forming successful business ventures in
China?
A) following the strategies of western countries for establishing business relationships
B) focusing on establishing tight formal contracts
C) giving high importance to written contracts
D) establishing a trusting relationship before proceeding with business
39) In which of the following systems is land, factories, and other economic resources equally
split between private and government ownership?
A) market economy
B) black market economy
C) mixed economy
D) centrally planned economy
40) The government maintains control over the banking industry in a country. Which of the
following is most likely true if the country has a mixed economy?
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A) Businesses in most economic sectors of the country are privately owned.
B) The government considers banking sector as important to national security.
C) The country has never experienced threats against its long-term stability.
D) The government views banking as more important than manufacturing.
42) In which of the following economies would manufacturing firms most likely produce
defective products due to low incentives for quality outputs?
A) centrally planned economies
B) market economies
C) closed economies
D) mixed economies
45) In a market economy, economy-related decisions are determined by the interactions between
________.
A) the government and individuals
B) supply and demand
C) customers and employees
D) large and small businesses
46) Which of the following dictates supply and demand in a market economy?
A) privatization
B) production quotas
C) price mechanism
D) government intervention
48) Assuming insects destroyed most of the coffee crops in key coffee-producing countries
worldwide, which of the following would most likely occur within the coffee market?
A) Coffee prices would increase.
B) Coffee prices would decrease.
C) Demand for coffee would increase.
D) Demand for coffee would decrease.
50) Several research studies were published lately that documented the health benefits of a
certain grain. Which of the following is the most likely economic result of these findings?
A) Demand for the grain increases.
B) Equilibrium in terms of demand and supply is maintained.
C) The price of the grain decreases.
D) Supply of the grain remains constant.
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55) Which of the following statements is most accurate regarding the element of free choice
when market economies are compared with centrally planned economies?
A) Consumers have free choice in both types of economies.
B) Free choice exists in market economies, but choices are restricted in planned economies.
C) Planned economies allow for greater free choice than do market economies.
D) Consumers do not have free choice in either of these economies.
56) When one company alone controls a product's supply and therefore, its price, it is considered
a(n) ________.
A) oligopsony
B) monopoly
C) duopoly
D) oligopoly
57) Which of the following control inflation through policies regarding taxation and government
spending in a market economy?
A) fiscal policies
B) monetary policies
C) social policies
D) trade policies
58) ________ policies control the currency supply and interest rates in a market economy.
A) Fiscal
B) Economic
C) Monetary
D) Social
59) Which of the following would characterize a nation with high degree of economic freedom?
A) low tariffs
B) strict trade policies
C) government interventions
D) flourishing black markets
60) The ________ approach to national economics calls for less government interference in
commerce and greater individual economic freedom.
A) totalitarian
B) laissez-faire
C) guanxi
D) centrally planned economy
61) Which of the following would most likely characterize a nation with a low degree of
economic freedom?
A) low government intervention
B) protected property rights
C) strict trade policies
D) low tariffs
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62) Which of the following terms refers to the broadest measure of economic development of a
country?
A) gross domestic product (GDP)
B) purchasing power parity (PPP)
C) gross national product (GNP)
D) human development index (HDI)
63) ________ is the value of all goods and services produced by the domestic economy over a
one-year period.
A) Gross domestic product (GDP)
B) Human development index (HDI)
C) Gross national product (GNP)
D) Purchasing power parity (PPP)
64) The ________ of a country is its gross national product divided by its population.
A) GNP per capita
B) GDP per capita
C) purchasing power parity
D) purchasing power
65) The relative ability of two countries' currencies to buy the same basket of goods in those two
countries is called ________.
A) gross national product
B) gross domestic product
C) purchasing power
D) purchasing power parity
66) ________ is the value of goods and services that can be purchased with one unit of a
country's currency.
A) Potential output
B) Gross national product
C) Purchasing power
D) Gross domestic product
67) An investor wants to invest in a country that has a high gross national income (GNI). Which
of the following countries would most likely qualify as a prospect?
A) Nepal
B) India
C) Japan
D) Vietnam
68) Which of the following terms is used to refer to the exchange of goods and services for other
goods and services instead of money?
A) fiat money
B) letter of credit
C) barter
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D) guanxi
69) The GDP per capita of a country is lower than that of France. If the GDP per capita of the
country is adjusted for PPP, the country's revised GDP is higher than that of France. Which of
the following is most likely true about the country?
A) The cost of living in the country is higher than that of France.
B) The cost of living in the country is lower than that of France.
C) The cost of living in the country is approximately equal to that of France.
D) The cost of living in the country has increased over the past decade.
70) The GDP per capita of a country is higher than that of Thailand. If the GDP per capita of the
country is adjusted for PPP, the country's revised GDP is lower than that of Thailand. Which of
the following is most likely true about the country?
A) There are fewer goods available for purchase in the country than in Thailand.
B) The cost to buy everyday goods in the country is approximately the same as in Thailand.
C) It costs less to buy everyday goods in the country than in Thailand.
D) It costs more to buy everyday goods in the country than in Thailand.
71) Which of the following measures the extent to which a government equitably provides its
people with a long and healthy life, an education, and a decent standard of living?
A) category development index
B) gross national product index
C) human development index
D) purchasing power index
75) Nations having the poorest infrastructures and lowest personal incomes are called ________.
A) developed countries
B) newly industrialized countries
C) emerging markets
D) developing countries
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