Page of 33 Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Full file at https://TestbankDirect.eu/ This chapter has 101 questions Scroll down to see and select individual questions or narrow the list using the checkboxes below questions at random and keep in order  Multiple Choice Questions - (58) Difficulty: Easy - (39) True/False Questions - (37) Difficulty: Hard - (7) Essay Questions - (6) Difficulty: Medium - (55) Odd Numbered - (51) Learning Objective: 01-01 Define basic concepts such as business; product; and profit - (11) Even Numbered - (50) Accessibility: Keyboard Navigation - (94) Bloom's: Analysis - (2) Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is important - (14) Learning Objective: 01-03 Define economics and compare the four types of economic systems - (24) Learning Objective: 01-04 Describe the role of supply; demand; and competition in a freeenterprise system - (19) Bloom's: Application - (7) Bloom's: Comprehension - (27) Learning Objective: 01-05 Specify why and how the health of the economy is measured - (18) Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in the economy - (15) Bloom's: Knowledge - (65) Products have tangible attributes only True → False Products can also be a service which has intangible attributes Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-01 Define basic concepts such as business; True / False Question product; and profit The goal of business activities is to earn a profit → True False Without profit, businesses will go out of business Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-01 Define basic concepts such as business; True / False Question product; and profit Non-profit organizations such as the Canadian Cancer Society not engage in management, marketing, or finance activities True → False Non-profit organizations not accumulate profits but they provide goods and services to consumers True / False Question Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-01 Define basic concepts such as business; product; and profit Profit is what it costs to make and sell a product True → False Profit is the difference between what it costs to make and sell a product and what a customer pays for it Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-01 Define basic concepts such as business; True / False Question product; and profit Businesses have the right to keep and use their profits as they choose, without limitations True → False Within legal limitations, businesses have the right to keep and use their profits as they choose Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-01 Define basic concepts such as business; True / False Question product; and profit Finance is concerned with obtaining money and using it effectively → True False Financial resources must be managed effectively for the business to succeed Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is True / False Question important Owners have little responsibility to provide funds for the operation of the business True → False The primary responsibility of the owners is to provide financial resources for the Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ operation of the business Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is True / False Question important Managers coordinate resources to achieve organizational objectives → True False Managers coordinate, organize, and motivate employees to achieve the business goals Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is True / False Question important The focus of all marketing activities is customer satisfaction → True False Marketing includes all the activities designed to provide goods and services that satisfy customer's needs and wants Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is True / False Question important 10 Owners always manage their businesses themselves True → False Owners can manage the business themselves or hire employees to accomplish this task True / False Question 11 Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is important Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ Studying business will help you develop skills to employ in a future career, if that career takes place in the country where you studied business topics True → False Studying business can help in students in careers both domestically and internationally, public and private, profit and non-profit Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-02 Identify the main participants and activities of business; and explain why studying business is True / False Question important 12 A central issue of economics is how to fulfill consumers' unlimited demand for goods and services in a world with limited resources → True False Economics is the study of how resources are distributed for the production of goods and services Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 13 Natural resources include land, minerals, water, and other gifts of nature which are not made by humans → True False Canada has an abundance of fresh water, large forest areas, and a variety of minerals including nickel, copper, and uranium Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 14 Capitalism is an economic system in which the government owns and operates basic industries while individuals own most other businesses True → False Socialism is an economic system in which the government owns and operates basic industries while individuals own most other businesses Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ True / False Question Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-03 Define economics and compare the four types of economic systems 15 Most socialist nations are democratic → True False Most socialist nations recognize basic individual freedoms such as voting for government officials Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 16 Human resources refer only to the mental abilities of people used to produce goods and services; it is synonymous with knowledge True → False Human resources includes both the physical and mental abilities of people in producing goods and services It is not just the knowledge or mental ability but also includes the physical efforts of labour as well Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 17 Demand is the quantity of goods and services that consumers are willing to buy at different prices at a specific time → True False Usually, as prices decrease, consumers are willing to buy more of a good or service Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-04 Describe the role of supply; demand; True / False Question and competition in a free-enterprise system 18 The equilibrium price is represented by the point where a product's supply and demand curves intersect → True False Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ The price at which the number of products that businesses are willing to supply is equal to the amount of products that consumers are willing to buy at a specific point in time is the equilibrium price Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; True / False Question and competition in a free-enterprise system 19 Monopolistic competition exists when there is only one producer of a product in a given market True → False Monopolistic competition exists when there are fewer businesses than in a purecompetition environment and the differences among the goods are small Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; True / False Question and competition in a free-enterprise system 20 An oligopoly exists when there are many small businesses selling one standardized product True → False An oligopoly exists when there are very few businesses selling a product Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; True / False Question and competition in a free-enterprise system 21 A product's equilibrium price is constantly changing in response to changes in economic conditions, availability of resources, and degree of competition → True False Changing the price alters the supply curve, and a new equilibrium price results This is an on-going process, with supply and demand constantly changing in response to changes in economic conditions, availability of resources, and degree of competition True / False Question Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Hard Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system 22 Economic expansion occurs when an economy is growing and people are spending more money → True False When people spend more money, it stimulates the production of goods and services which in turn stimulates employment Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 23 The standard of living rises because people have less money to spend True → False The standard of living rises because people have more money to spend Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 24 Inflation is a condition characterized by falling prices True → False Inflation describes the situation in which there is a sustained and persistent increase in the general level of prices of goods and services Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 25 A severe recession may turn into a depression → True False A depression has very high unemployment, very low consumer spending and business output is sharply reduced True / False Question Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ Learning Objective: 01-05 Specify why and how the health of the economy is measured 26 During a recession, unemployment is unusually low True → False A recession is characterized by a decline in production, rising unemployment, and declining income Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 27 Gross domestic product is the sum of all goods and services produced in a country during a year → True False GDP is a measurement that countries use to measure their state of economies Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 28 Since 1997, it has been common policy for the government of Canada to run large budget deficits True → False Since 1997, the Canadian government has made great efforts to reverse the trend of budget deficits The efforts to accumulate large budget surpluses have been quite successful until the recession in 2008-2009 Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the True / False Question economy is measured 29 When a nation collects more from taxes than it spends, it has a budget deficit True → False The relationship between its spending and income (from taxes) determines if a country has a budget deficit, surplus, or balanced budget True / False Question Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page of 33 Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-05 Specify why and how the health of the economy is measured 30 Industrialization mostly occurred in Central Canada → True False Industrialization was not as widespread in Canada as the United States and mostly occurred in Central Canada Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian True / False Question economy; and discuss the role of the entrepreneur in the economy 31 The Canadian Pacific Railway linked Canada from north to south True → False The Canadian Pacific Railway linked Canada from coast to coast Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian True / False Question economy; and discuss the role of the entrepreneur in the economy 32 Advertising first made consumers aware of differences in products and prices in the marketing economy → True False Following the manufacturing economy, businesses became more concerned with the needs of the consumer and entered the marketing economy Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-06 Trace the evolution of the Canadian True / False Question economy; and discuss the role of the entrepreneur in the economy 33 Entrepreneurs risk their wealth, time, and effort to develop for profit an innovative product or way of doing something → True False The Irving Group and Loblaws are great examples of entrepreneurs starting Canadian Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 10 of 33 Full file at https://TestbankDirect.eu/ companies Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian True / False Question economy; and discuss the role of the entrepreneur in the economy 34 Entrepreneurship is essential to a free-enterprise system → True False It is a growing interest as people are attracted to being their own boss Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian True / False Question economy; and discuss the role of the entrepreneur in the economy 35 In a free-market system, the government regulates business True → False In a free-market system, competition, supply, and demand determine which goods and services are produced Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 36 Free-market capitalism and laissez-faire capitalism are essentially the same thing → True False Government does not interfere in a free-market or laissez-faire society Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-03 Define economics and compare the four True / False Question types of economic systems 37 Society demands ethical and socially responsible business behaviour towards customers and investors only There seems to be less of a concern for other stakeholder groups including government regulators and the environment True → False Society is increasingly demanding that businesspeople behave ethically towards all Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 19 of 33 Full file at https://TestbankDirect.eu/ Learning Objective: 01-03 Define economics and compare the four types of economic systems 61 Most economic systems exist in a pure form → exist in a mixed form are ineffective create revolutions give individuals freedom No country practises a pure economic form but have elements from more than one economic system Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-03 Define economics and compare the Multiple Choice Question four types of economic systems 62 Private property, profits, independent business decisions, and freedom of choice are rights associated with socialism → free enterprise communism egalitarianism humanitarianism Free enterprise necessitates these four rights in order for the system to work Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-03 Define economics and compare the Multiple Choice Question four types of economic systems 63 Which of the following systems has the highest degree of competition? → Communism Socialism Pure capitalism Modified capitalism Mixed economy In theory, pure capitalism has no government intervention but no pure form of an economic system exists in practice Multiple Choice Question Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Hard Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 20 of 33 Full file at https://TestbankDirect.eu/ Learning Objective: 01-03 Define economics and compare the four types of economic systems 64 In which economic system(s) are basic services provided by the central government? → Communism and socialism Capitalism and socialism Communism and capitalism Socialism only Capitalism only Both communist and socialist societies provide basic services through a centralized government but socialist societies also recognize basic individual freedoms Accessibility: Keyboard Navigation Bloom's: Analysis Difficulty: Medium Learning Objective: 01-03 Define economics and compare the Multiple Choice Question four types of economic systems 65 Which of the following countries best depicts a communist economic system? → Cuba Canada Russia Poland Hungary Both China and Cuba are good examples of communist systems, however the Chinese economy has grown more than any other country in the past 30 years The Chinese government maintains a high degree of control but significant capitalist reforms are taking place Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Medium Learning Objective: 01-03 Define economics and compare the Multiple Choice Question four types of economic systems 66 If an economist is analyzing the quantity of goods or services that businesses are willing to sell at different prices at specific times, then the focus is on competition pure competition demand → supply equilibrium Supply is the number of goods or services that a business is willing to sell at different prices at specific times Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 21 of 33 Full file at https://TestbankDirect.eu/ Multiple Choice Question Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system 67 Suppliers are generally willing to lower prices below costs → supply more at a higher price demand more at a higher price determine equilibrium price supply more at a lower price The potential for profits is higher when businesses sell goods at a higher price Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Hard Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 68 When Walmart has a sale on digital cameras, consumers won't demand more digital cameras than normal the store won't supply more digital cameras than it normally does → consumers will demand more digital cameras the manufacturer will halt production of digital cameras consumers will demand fewer digital cameras Generally, when prices decrease there is an increase in the quantity demanded of that item Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 69 When Apple introduced the iPod portable digital music player, the price of and demand for digital music players was high As a result, → other suppliers introduced digital music players to meet the demand consumers stopped buying digital music players manufacturers stopped producing digital music players competition was not allowed to enter the market the equilibrium price met supply Although prices were high, demand was also high, and therefore businesses have the potential for high profits Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 22 of 33 Full file at https://TestbankDirect.eu/ Multiple Choice Question Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system 70 Supply and demand may be an efficient way to distribute resources, → but it may not distribute resources equally among those who need them but it doesn't allow the poor to get rich although equilibrium price is determined by the government but it helps inefficient producers to succeed and it is always fair The forces of supply and demand prevent sellers who have to sell at higher prices and buyers who cannot afford to buy goods at the equilibrium price from participating in the market Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Hard Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 71 Competition fosters efficiency because the government regulates prices → producers have to offer the best products at reasonable prices supply depresses prices all buyers have perfect knowledge businesses can set whatever prices they want If producers not offer the best products at the most reasonable price, the business will fail Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 72 If Chrysler raises the prices of its new models of pickup trucks by percent and General Motors and Ford follow by raising prices by a similar amount, then this is evidence of a monopoly → an oligopoly pure competition monopolistic competition supply and demand Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 23 of 33 Full file at https://TestbankDirect.eu/ The prices charged by different firms in an oligopoly stay fairly close because a price cut or increase by one company will trigger a similar response by another company Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 73 Monopolies that function in a capitalistic economy are likely to have prices determined by law of supply law of demand interaction of supply and demand equilibrium interaction → government regulation Government-granted monopolies, such as utility companies, are subject to government regulated prices Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 74 Using the supply and demand curves shown in the graph that follows, what is the equilibrium price for soft drinks? → 35 cents 45 cents 50 cents 55 cents 75 cents The equilibrium price is where the supply and demand curves intersect Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 24 of 33 Full file at https://TestbankDirect.eu/ Multiple Choice Question Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-04 Describe the role of supply; demand; and competition in a free-enterprise system 75 When businesses can promote different features of their products and consumers are willing to pay more for products containing the features they desire, the competitive environment is probably pure competition → monopolistic competition oligopoly monopoly pure capitalism Consumers value some features more than others and are often willing to pay higher prices for the feature they want Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 76 Agricultural commodities are usually sold under which competitive environment? Monopoly Monopolistic competition → Pure competition Oligopoly Pure capitalism No one business sells enough agricultural commodities to influence the price and there is no difference between the commodities offered therefore prices are determined only by supply and demand Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 77 Which competitive environment best describes the market for wheat, corn, and cotton? Monopoly Monopolistic competition → Pure competition Oligopoly Pure capitalism Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 25 of 33 Full file at https://TestbankDirect.eu/ Agricultural commodities trade in a market characterized by pure competition as no single business can influence the price and there is no difference between the commodities offered Prices are therefore determined only by supply and demand Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Easy Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 78 Which competitive environment best describes the market for Canadian air travel? Monopoly Monopolistic competition → Oligopoly Pure competition Pure capitalism Canadian air travel is characterized by an oligopoly as it is dominated by Air Canada and WestJet Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Easy Learning Objective: 01-04 Describe the role of supply; Multiple Choice Question demand; and competition in a free-enterprise system 79 Economic expansion occurs when fewer goods and services are produced than consumers demand → an economy is growing and people are spending more money a nation's standard of living drops quickly employment levels decline over time prices begin to rise and incomes begin to fall When people spend more money, it stimulates the production of goods and services which in turn stimulates employment Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 80 Economic contraction occurs when more goods and services are demanded by consumers → spending declines and businesses cut back on production a nation's standard of living remains stable over time employment levels increase over time Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 26 of 33 Full file at https://TestbankDirect.eu/ prices begin to rise and incomes rise accordingly In an economic contraction, there is a decline in production, employment, and income Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 81 A continuing rise in prices over a period of time refers to → inflation economic expansion a recession economic contraction stagflation When economies expand rapidly, prices generally as well Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 82 Economic contraction leads to: spending increases → recession higher employment inflation deflation In an economic contraction, businesses cut back on production and lay off workers This leads to a recession, which is characterized by rising levels of unemployment Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 83 Countries measure the state of their economies to → determine whether they are expanding or contracting regulate wages and employment let other nations know the state of their economic health avoid taking corrective action control government spending Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 27 of 33 Full file at https://TestbankDirect.eu/ In order for a country to take corrective action or minimize fluctuations, they must first measure the state of their economies Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 84 Increased unemployment can reduce consumer demand for goods and services, leading to economic contraction inflation → deflation a budget deficit higher employment levels In an economic contraction, people spend less money which can lead to deflation or decrease in market prices Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 85 A budget surplus, when a nation spends less than it takes in from taxes, is the opposite of a(n): stagnant income → budget deficit economic expansion balance of trade economic contraction A budget deficit spends more than it takes from taxes Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 86 Much of the new debt accrued in Canada between 2008 and 2013 can be attributed to: stagnant income → Canada's Economic Action Plan Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 28 of 33 Full file at https://TestbankDirect.eu/ economic expansion balance of trade poor monetary management Much of the increase in debt can be attributed to Canada's Economic Action Plan which consisted of a $62 billion injection into the economy during the last recession Accessibility: Keyboard Navigation Bloom's: Application Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 87 Inflation in Canada is typically measured by: Gross Domestic Product → The Consumer Price Index Per capita income Worker productivity The Trade Balance The Consumer Price Index (CPI) measures the changes in the prices of goods and services purchased for consumption by typical urban households Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of Multiple Choice Question the economy is measured 88 The early economy of Canada was marked by settlers who operated a society primarily based on manufacturing technology sweatshops information → agriculture Abundant natural resources nourished industries such as farming, fishing, shipping and the fur trade Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 89 All of the following are associated with the Industrial Revolution, except: Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 29 of 33 Full file at https://TestbankDirect.eu/ → factories railroads farm equipment computers machines Computers came after World War II during the service economy Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 90 In the history of the Canadian economy, the period or stage following the Industrial Revolution was known for its emphasis on service technology manufacturing agriculture → both manufacturing and agriculture The Industrial Revolution brought factories to central Canada but most of the east and west coast remained agriculture-focused Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 91 The entrepreneur has been primarily associated with a willingness to stay conventional follow others → take risks be repetitive be conservative An entrepreneur risks his or her wealth, time, and effort Multiple Choice Question Full file at https://TestbankDirect.eu/ Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Medium Learning Objective: 01-06 Trace the evolution of the Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 30 of 33 Full file at https://TestbankDirect.eu/ Canadian economy; and discuss the role of the entrepreneur in the economy 92 Time-pressed Canadians are increasingly: → paying others to their own home tasks relaxing sleeping reading reducing the time they spend at work Cooking, laundry, landscaping, and child care have made Canada a service-based economy Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 93 As women entered the workforce in increasing numbers, Canadians began to pay others to jobs for them which made their lives easier This began the transformation of the Canadian economy into a: → service economy sluggish economy financial economy agricultural economy industrial economy Cooking, laundry, landscaping, and child care have made Canada a service-based economy Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 94 Technological trends have gradually changed Canada to a(n) _ economy focused on making life easier for busy consumers manufacturing → service agriculture technology marketing As consumers get busier, they need others to tasks such as house cleaning, Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 31 of 33 Full file at https://TestbankDirect.eu/ laundry, and landscaping Accessibility: Keyboard Navigation Bloom's: Knowledge Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 95 All of the following are associated with the manufacturing economy, except: buying on a time-payment plan marketing advertising → cable television marketing research Cable television came about during the service and Internet-based economy Accessibility: Keyboard Navigation Bloom's: Comprehension Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in Multiple Choice Question the economy 96 Briefly describe the goals of a business, especially the primary goal Explanation: Answers will vary Feedback: The primary goal of businesses is to earn a profit, the difference between what it costs to make and sell a product and what a customer pays for it Other business goals may include acting ethically and socially responsible Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-01 Define basic concepts such as business; Essay Question product; and profit 97 Describe the relationship between management, marketing, finance, owners, employees, and customers Explanation: Answers will vary Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 32 of 33 Full file at https://TestbankDirect.eu/ Feedback: Management involves coordinating the efforts of employees to achieve organizational objectives Marketing involves activities designed to provide goods and services that satisfy customers Finance involves activities concerned with obtaining money—from owners and investors and other sources—and using it effectively Bloom's: Comprehension Difficulty: Easy Learning Objective: 01-02 Identify the main participants and activities of Essay Question business; and explain why studying business is important 98 What are the three questions that all economic systems must answer? Who answers them under a communist system? A socialist system? A capitalist system? Explanation: Answers will vary Feedback: The three economic questions are (1) What goods and services and how much of each, will satisfy the needs of the consumer? (2) How will goods and services be produced, who will produce them and with what resources will they be produced? (3) How are the goods and services to be distributed to the consumer? Under a true communist system, these questions are answered by a central government planning committee Under a true socialist system, central planning answers the questions for basic goods and industries, while the forces of supply and demand answer them for most other products Within a capitalist system, competition, supply, and demand determine the answers Bloom's: Analysis Difficulty: Hard Learning Objective: 01-03 Define economics and compare the four types Essay Question of economic systems 99 Define supply, demand, and equilibrium price, and explain their relationship with each other Explanation: Answers will vary Feedback: Supply is the quantity of goods or services that businesses are willing to sell at different prices at a specific time Demand is the quantity of goods or services that consumers are willing to buy at different prices at a specific time Both can be shown graphically with supply and demand curves Where the supply and demand curves intersect is the equilibrium price, the price at which the quantity of products businesses are willing to supply equals the quantity of products consumers are Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 33 of 33 Full file at https://TestbankDirect.eu/ willing to buy at a specific point in time If economic conditions, resource availability, degree of competition, or some other factor changes either supply or demand, a new equilibrium price will be established Bloom's: Knowledge Difficulty: Hard Learning Objective: 01-04 Describe the role of supply; demand; and Essay Question competition in a free-enterprise system 100.Discuss the issues involved in measuring a country's economy Explanation: Answers will vary Feedback: Countries measure the state of their economies to determine whether they are expanding or contracting and whether corrective action is necessary to minimize fluctuations One commonly used measure is gross domestic product (GDP), the sum of all goods and services produced in a country during a year Another important indicator of a nation's economic health is the relationship between its spending and income (from taxes) Bloom's: Comprehension Difficulty: Medium Learning Objective: 01-05 Specify why and how the health of the Essay Question economy is measured 101.Why are entrepreneurs important to the economy? Explanation: Answers will vary Feedback: Entrepreneurs are important to the economy because they are willing to take the risks necessary to bring ideas for new goods, services, and business practices into the marketplace They bring together all the factors of production to produce new products Essay Question Bloom's: Comprehension Difficulty: Easy Learning Objective: 01-06 Trace the evolution of the Canadian economy; and discuss the role of the entrepreneur in the economy Full file at https://TestbankDirect.eu/ ... file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 13 of 33 Full file at https://TestbankDirect.eu/ Managers plan, organize, staff, and... https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 10 of 33 Full file at https://TestbankDirect.eu/ companies Accessibility: Keyboard Navigation... will vary Full file at https://TestbankDirect.eu/ Test Bank for Business A Changing World 5th Canadian Edition by Ferrell Page 32 of 33 Full file at https://TestbankDirect.eu/ Feedback: Management