BUSN 11 Exam Questions with All
Correct Answers
When starting a business, a new owner will be asked for this document by capital
suppliers, key employees and possible supplier - Answer-A business plan
Business forms that are designed to limit liability to owners, limit the amount an owner
can lose to - Answer-The amount they have invested in the company
What is the most closely followed stock market index, which gauges the direction of the
market - Answer-Dow Jones Industrial Average
What happens when the value of the U.S. dollar increases, relative to other currencies -
Answer-The trade deficit increases
Capitalism - Answer-an economic and political system in which a country's trade and
industry are controlled by private owners for profit, rather than by the state.
Production Era - Answer-In the early 1900s, businesses refined production process and
created greater efficiencies
Marketing Era - Answer-After WWII, businesses began to develop brands to help
consumers understand the differences among products
liar loan - Answer-when they can't verify your income
the great recession - Answer-huge expansion in the late 90s fueled by Y2K and the web
M1 Money Supply - Answer-includes all currency plus checking accounts and traveler's
checks
M2 money supply - Answer-Includes all of M1 money supply plus most savings
accounts, money market accounts, and certificates of deposit.
Fed tools - Answer-open market operations, discount rate, reserve requirement
rights of capitalism - Answer-Right to own a business and keep after-tax profits
Right to private property
Right to free choice
Right to fair competition
, Oligopoly - Answer-a state of limited competition, in which a market is shared by a small
number of producers or sellers.
BRICS - Answer-five major emerging national economies: Brazil, Russia, India, China
and South Africa
Economies that were formerly centrally planned that have embraced free market forms
PIIGS - Answer-Portugal, Italy, Ireland, Greece, Spain
Economies that did not embrace the free market forms
Capitalism is when free markets determine what is to be produced (supply) and what is
to be consumed (demand) T / F - Answer-T
pure - Answer-many sellers selling virtually the same product
Monopolistic - Answer-a market structure in which many companies sell products that
are similar but not identical
Socialism - Answer-A system in which society, usually in the form of the government,
owns and controls the means of production.
Hyperinflation - Answer-A very rapid rise in the price level; an extremely high rate of
inflation.
Consumer Price Index (CPI) - Answer-evaluates the change in the weighted average
price of goods that an average of consumers buy each month
Producer Price Index (PPI) - Answer-Evaluates the change over time in the weighted
average wholesale prices
Reasons for International Trade - Answer-access to factors of production, reduced risk,
inflow of innovation
competitive advantage - Answer-a set of unique features of a company and its products
that are perceived by the target market as significant and superior to those of the
competition
opportunity cost - Answer-the most desirable alternative given up as the result of a
decision
absolute advantage - Answer-the ability to produce more of a given product using a
given amount of resources
trade surplus - Answer-when a country exports more than it imports
Correct Answers
When starting a business, a new owner will be asked for this document by capital
suppliers, key employees and possible supplier - Answer-A business plan
Business forms that are designed to limit liability to owners, limit the amount an owner
can lose to - Answer-The amount they have invested in the company
What is the most closely followed stock market index, which gauges the direction of the
market - Answer-Dow Jones Industrial Average
What happens when the value of the U.S. dollar increases, relative to other currencies -
Answer-The trade deficit increases
Capitalism - Answer-an economic and political system in which a country's trade and
industry are controlled by private owners for profit, rather than by the state.
Production Era - Answer-In the early 1900s, businesses refined production process and
created greater efficiencies
Marketing Era - Answer-After WWII, businesses began to develop brands to help
consumers understand the differences among products
liar loan - Answer-when they can't verify your income
the great recession - Answer-huge expansion in the late 90s fueled by Y2K and the web
M1 Money Supply - Answer-includes all currency plus checking accounts and traveler's
checks
M2 money supply - Answer-Includes all of M1 money supply plus most savings
accounts, money market accounts, and certificates of deposit.
Fed tools - Answer-open market operations, discount rate, reserve requirement
rights of capitalism - Answer-Right to own a business and keep after-tax profits
Right to private property
Right to free choice
Right to fair competition
, Oligopoly - Answer-a state of limited competition, in which a market is shared by a small
number of producers or sellers.
BRICS - Answer-five major emerging national economies: Brazil, Russia, India, China
and South Africa
Economies that were formerly centrally planned that have embraced free market forms
PIIGS - Answer-Portugal, Italy, Ireland, Greece, Spain
Economies that did not embrace the free market forms
Capitalism is when free markets determine what is to be produced (supply) and what is
to be consumed (demand) T / F - Answer-T
pure - Answer-many sellers selling virtually the same product
Monopolistic - Answer-a market structure in which many companies sell products that
are similar but not identical
Socialism - Answer-A system in which society, usually in the form of the government,
owns and controls the means of production.
Hyperinflation - Answer-A very rapid rise in the price level; an extremely high rate of
inflation.
Consumer Price Index (CPI) - Answer-evaluates the change in the weighted average
price of goods that an average of consumers buy each month
Producer Price Index (PPI) - Answer-Evaluates the change over time in the weighted
average wholesale prices
Reasons for International Trade - Answer-access to factors of production, reduced risk,
inflow of innovation
competitive advantage - Answer-a set of unique features of a company and its products
that are perceived by the target market as significant and superior to those of the
competition
opportunity cost - Answer-the most desirable alternative given up as the result of a
decision
absolute advantage - Answer-the ability to produce more of a given product using a
given amount of resources
trade surplus - Answer-when a country exports more than it imports
