Review - Chapter 1

Question 1

Economic contraction occurs when

Accepted Answer

spending declines and businesses cut back on production

Question 2

In a free-market system, the government regulates business

Accepted Answer

False

Question 3

Monopolistic competition exists when there is only one producer of a product in a given market.

Accepted Answer

False

Question 4

An oligopoly exists when there are many small businesses selling one standardized product.

Accepted Answer

False

Question 5

During a recession, unemployment is unusually low

Accepted Answer

False

Question 6

Factors of production are:

Accepted Answer

Resources used to produce goods and services.

Question 7

The goal of business activities is to earn a profit.

Accepted Answer

True

Question 8

Most socialist nations are democratic.

Accepted Answer

True

Question 9

All of the following are true in a communist economy except

Accepted Answer

consumers have a wide choice of goods and services

Question 10

Which of the following systems has the highest degree of competition?

Accepted Answer

Pure capitalism

Questions 10