Davis D270 Final
1) The recent global economic crisis has led to which of the following?
A) governments seeking to impose more constraints on capitalism
B) governments seeking to eliminate constraints on capitalism
C) governments seeking to increase the interdependence of developing economies
D) governments seeking to eliminate the interdependence of developing economies -
CORRECT ANSWER-A) governments seeking to impose more constraints on
capitalism
2) Which of the following is most likely a true statement about the global economy
since the 1980s?
A) Socialist governments are intervening more in global exchanges.
B) Wealthy countries are exercising total control over emerging markets.
C) Developing countries are losing growing shares of their foreign-exchange
reserves.
D) Emerging economies are adopting the principles and practices of free markets. -
CORRECT ANSWER-D) Emerging economies are adopting the principles and
practices of free markets.
3) Kyle, an international manager for Apex Industries, has been given the task of
analyzing the economies of three different emerging countries for the firm's potential
expansion. Which of the following questions is LEAST relevant to Kyle's
assignment?
A) How much freedom will Apex have to run its foreign operations?
B) What are the current economic policies related to development?
C) What is the likelihood that Apex can fill manufacturing positions with locals?
D) What factors in the country drive or hinder economic change? - CORRECT
ANSWER-C) What is the likelihood that Apex can fill manufacturing positions with
locals?
4) Managers at Morrison Manufacturing are considering expanding the firm's
production overseas and want to ensure that the firm is located in a country with a
high degree of economic freedom. Presently, which of the following locations would
most likely offer Morrison the highest economic freedom?
A) Mexico
B) Hong Kong
C) Venezuela
D) North Korea - CORRECT ANSWER-B) Hong Kong
,5) Since the late 1980s, the growing emergence of freer markets has been powered
by the realization that ________.
A) economic growth is directly related to economic freedom
B) economic growth has a limited effect on the standard of living
C) adoption of free market principles contributes to social injustices
D) centrally planned economies are best designed to deliver progress - CORRECT
ANSWER-A) economic growth is directly related to economic freedom
6) The Economic Freedom Index indicates that economic freedom is positively
correlated with all of the following EXCEPT ________.
A) life expectancy
B) literacy
C) environmental sustainability
D) diversity - CORRECT ANSWER-D) diversity
7) The recent global credit crisis has interrupted the trend of national economies
________.
A) rapidly adopting the command market model
B) steadily adopting the free market model
C) moving from the mixed to the command model
D) turning away from the mixed model - CORRECT ANSWER-B) steadily adopting
the free market model
8) History suggests that if the economic crisis worsens, we are likely to see more
people question the ________.
A) fall of communism
B) legitimacy of capitalism
C) practicality of mixed market economies
D) correlation between economic freedom and prosperity - CORRECT ANSWER-B)
legitimacy of capitalism
9) According to research, which of the following countries is the strongest supporter
of free markets?
A) China
B) India
C) France
D) Ukraine - CORRECT ANSWER-A) China
10) Which of the following is NOT a characteristic of capitalism?
,A) private ownership of assets
B) right to profit from individual effort
C) state control of factors of production
D) private control of investment - CORRECT ANSWER-C) state control of factors of
production
11) Communism primarily relies on a system of ________.
A) private business ownership
B) competitive pricing and marketing
C) market-generated supply and demand
D) government controlled economic activity - CORRECT ANSWER-D) government
controlled economic activity
12) In a market economy, the patterns of resource allocation are most directly
influenced by ________.
A) government administrators who monitor the equilibrium of supply and demand
B) industry coalitions that strive to improve the efficiency of production and service
C) consumer group alliances that negotiate with firms to improve product quality
D) consumers who "vote" by their personal decision to buy or not buy products -
CORRECT ANSWER-D) consumers who "vote" by their personal decision to buy or
not buy products
13) A system in which individuals, rather than the government, make the majority of
economic decisions is commonly referred to as a ________.
A) command economy
B) market economy
C) private economy
D) mixed economy - CORRECT ANSWER-B) market economy
14) Market economies are primarily characterized by ________.
A) formal cooperation among government, companies, and workers to achieve
stable growth
B) heavy government spending and high taxation to pay for a range of social
services
C) minimal governmental participation
D) restricted consumer powers - CORRECT ANSWER-C) minimal governmental
participation
, 15) In a command economy, the goods and services that a country produces, the
quantity in which they are produced, and the prices at which they are sold are
planned by ________.
A) government officials
B) private industries
C) individual entrepreneurs
D) local trade associations - CORRECT ANSWER-A) government officials
16) In a command economy, ________.
A) businesses and consumers are assumed to be the best judges of how resources
should be allocated
B) the government sets goals and determines the price and quantity of what is
produced
C) different economic sectors coordinate the activities of the federal government
D) each enterprise sets its goals before making reports to the central government -
CORRECT ANSWER-B) the government sets goals and determines the price and
quantity of what is produced
17) In Country X, all dimensions of economic activity, including pricing and
production decisions, are determined by the central government. Which term best
describes Country X?
A) market economy
B) mixed economy
C) command economy
D) democratic economy - CORRECT ANSWER-C) command economy
18) Which of the following is most typical of a command economy?
A) Consumers have choices of many substitutes for any given product.
B) Quality of products and services tends to be consistent.
C) The prices of goods and services frequently change.
D) Many products are usually in short supply. - CORRECT ANSWER-D) Many
products are usually in short supply.
19) In a ________ economy, certain sectors of the economy are left to private
ownership and free market mechanisms, while other sectors have significant state
ownership and government planning.
A) state-directed
B) market
C) command
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