31 Jan D. Expansion

Question
Question 1

1. Which of the following is a disadvantage of mass production?

A. Job gains

B. Increased profits

C. Lost jobs

D. Productivity gains

Question 2

2. The government has an interest in promoting competition between businesses because competition results in

A. lower prices and higher quality of products.

B. higher prices and lower-quality products

C. lower prices and lower-quality products

D. higher prices and higher-quality products

Question 3

3. A tax that takes a higher proportion from a low-income person than a rich person is known as a/an _______ tax.

A. estate

B. regressive

C. progressive

D. proportional

Question 4

4. Which government agency is in charge of regulating the sale of stocks and bonds?

A. The Federal Deposit Insurance Corporation

B. The Securities and Exchange Commission

C. The Federal Security Agency

D. The Interstate Commerce Committee

Question 5

5. What motivates most entrepreneurs to go into business for themselves?

A. The potential for profit

B. Guaranteed health care

C. Full liability

D. A higher salary

Question 6

6. Which of the following is an advantage of the sole proprietorship form of ownership?

A. Limited liability

B. Split responsibility

C. Unlimited liability

D. Control over the business

Question 7

7. A tax that can be passed onto someone else is known as a/an _______ tax.

A. direct

B. indirect

C. personal income

D. quarterly

Question 8

8. Money lent to a corporation that promises to pay the loan back with interest is known as

A. equity financing.

B. corporate stock.

C. corporate loans.

D. corporate bonds.

Question 9

9. A merger between a company and one of its suppliers is known as a _______ merger.

A. supply

B. demand

C. horizontal

D. vertical

Question 10

10. Each worker doing a small part of the overall manufacturing process is known as

A. interchangeable parts.

B. specialization.

C. automation.

D. appreciation.

Question 11

11. Which of the following is a reason the government can’t completely control the business cycle?

A. Government has no control over consumer spending.

B. It’s difficult to accurately predict the economic future.

C. The government can’t control interest rates.

D. Unemployment is unpredictable.

Question 12

12. How are stock speculators different from stock investors?

A. Speculators hold stock for long periods of time.

B. Speculators invest only in long-term bonds.

C. Speculators hold stock for short periods of time.

D. Speculators purchase stock in companies.

Question 13

13. Which of the following is a reason people could be concerned about mergers?

A. Large businesses can offer lower prices.

B. The most efficient businesses are small.

C. Small businesses hire more people than large businesses.

D. Mergers can reduce competition.

Question 14

14. Which of the following is a reason for the growth of federal government spending?

A. Shrinking population

B. Growing population

C. Less demand for services

D. Deflation

Question 15

15. One advantage of preferred stock over common stock is that preferred stockholders

A. have the right to vote for the board of directors.

B. get a cheaper price on stock.

C. are entitled to a fixed dividend.

D. participate in managing the company.

Question 16

16. An advantage of using interchangeable parts is that they

A. are custom made to fit each machine.

B. are made out of cheaper materials.

C. make it easier to repair machines.

D. are easier to work with.

Question 17

17. The NASDAQ is an example of what type of stock exchange?

A. Technology exchange

B. Over-the-counter market

C. Floor exchange

D. Inside market

Question 18

18. How can the Federal Reserve fight recession?

A. Raise taxes

B. Raise interest rates

C. Lower taxes

D. Lower interest rates

Question 19

19. The period of time when business slows, workers are laid off, and GDP declines is what part of the business cycle?

A. Trough

B. Recession

C. Peak

D. Expansion

Question 20

20. Limited liability is an advantage of what form of business ownership?

A. Corporation

B. Franchise

C. Sole proprietorship

D. Partnership