Which statement about capitalism is the most accurate?

Capitalism is characterized by unequal distribution of wealth and income.

Contemporary governments promote business development by

establishing a currency that is tradable in world markets.

An unfavorable balance of trade occurs when the value of

imports exceeds the value of exports.

To implement a policy of empowerment, the organization will restructure so that

employees assume more responsibility.

The immigrant population (both legal and illegal) is having the most dramatic effect on

schools, hospitals, and other services industries

The green movement is

concerned with depletion of natural resources.

A major premise of a socialist system is

to reduce the inequality in the distribution of wealth.

The value of a firm's intellectual capital refers to

its employee's knowledge and skills.

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Module 1 Exam Review

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Questions 19

Answers

1
Today, the economic systems of most nations could most accurately be classified as
pure socialism.
mixed economies.
command economies.
pure capitalism.
2
Two factors of production that seem to contribute the most to a nation's ability to create wealth are
Land and Labor
Entrepreneurship and Knowledge
Entrepreneurship and Labor
Land and Capital
3
Which statement about capitalism is the most accurate?
In capitalist economies, most resources are owned by the government.
Capitalism is characterized by unequal distribution of wealth and income.
A strength of capitalism is its ability to deal with environmental problems
People have little freedom to pursue their own goals.
4
__________ is buying products from another country.
Outsourcing
Retailing
Exporting
Importing
5
Contemporary governments promote business development by
increasing business regulations.
encouraging government ownership of businesses.
permitting businesspeople to conduct business without the use of contracts.
establishing a currency that is tradable in world markets.
6
An unfavorable balance of trade occurs when the value of
exports exceeds the value of imports.
cash inflows is equal to the value of cash outflows.
imports equals the value of exports.
imports exceeds the value of exports.
7
High tax rates tend to
promote economic development.
encourage small business ownership.
make a nation's currency tradable.
discourage entrepreneurship.
8
Empowerment requires managers to focus more on __________ lower-level employees.
eliminating
directly supervising
training
controlling and correcting
9
Many business experts contend that __________ will likely be the growth market of the future.
Asia
South America
Central America
the Middle East
10
To implement a policy of empowerment, the organization will restructure so that
an entire level of management is removed from the organization.
workers agree to work overtime without extra pay.
managers have more responsibility and employees learn to follow directions.
employees assume more responsibility.
11
The immigrant population (both legal and illegal) is having the most dramatic effect on
car and truck makers
the mining and minerals industry
schools, hospitals, and other services industries
the ice cream and confection industry
12
In a free-market, __________ is the key determinant used to signal to producers what to produce and how much to produce.
price
quantity
quality
trend
13
The green movement is
developing more green food products to feed the world's poor.
the fact that everywhere we look things are a bit too green
concerned with depletion of natural resources.
a trend that started with the U.S. government.
14
A major premise of a socialist system is
that the people who create wealth are allowed to keep that wealth.
to reduce the inequality in the distribution of wealth.
create incentives to encourage entrepreneurs to create jobs
to keep tax rates extremely low so that businesses can prosper.
15
Efficiency in distribution systems around the world has led to
decreased international competition.
decreased world trade.
reduced standards of living around the world.
increased world trade.
16
The value of a firm's intellectual capital refers to
its employee's knowledge and skills.
its reputation in the marketplace.
the average educational level of management.
the type and success of its financial strategies.
17
Japanese car producers sold more overseas than they sold in Japan. Their business strategy emphasizes
Exporting
Importing
Dumping
Licensing
18
The social and economic goals of __________ include private ownership of land and business.
capitalism
command economies
socialism
communism
19
What indicator provides the clearest indication that an economy is experiencing deflation?
decrease in the CPI
increase in the PPI
decrease in the unemployment rate
decrease in GDP

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