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Exam 3: Economic Challenges Facing Contemporary Business

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Question 81

Multiple Choice

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In a ______ system, the government owns all of the nation's major industries but still allows private ownership in less crucial areas.

A) communism
B) socialism
C) capitalism
D) mixed economy

E) B) and C)
F) A) and D)

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Question 82

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Increased purchases of discretionary items, such as cars and vacations, are common during periods of recession.

A) True
B) False

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Question 83

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A particular industry has only a few competitors, who have at least some control over price. Entry into the industry is difficult. This industry is an example of ______.

Because there are only a few manufacturers of computer chips, the product is sold in the pure competition market.

The price of gasoline rises sharply. One likely outcome is that the demand curve for hybrid vehicles should shift downward and to the left.

In order to control the rising price of housing, the city council enacts rent controls. This mandated price is below the equilibrium price. Consequently, a shortage of housing may result.

Complete the following using the terms listed below: -_____ refers to the willingness and ability of buyers to purchase goods and services at various prices.

In the recovery stage of the business cycle, the economy emerges from recession.

The equilibrium price is the same as the market price at which consumers are willing to buy the same quantity supplied by suppliers.

Which of the following fields is concerned with understanding the choices people make in using scarce resources?

The purpose of a restrictive monetary policy is to

The Bank of Canada can implement both expansionary and restrictive monetary policies.

During a recession, business spending falls but consumer spending remains relatively unchanged.

______ is caused by increases in the prices of raw materials and other factors of production.

A country has a strong private sector, along with publicly owned enterprises. Entrepreneurs and private-sector investors are entitled to profits, after taxes, and even state-owned enterprises are expected to at least break even. What type of economic system does this country have?

Explain the mixed market economy and mention three vital services controlled by the government in the Canadian mixed market system.

The conversion of the postal service from government-owned and operated into privately held businesses would be an example of ______.

The Bank of Canada reduces the amount of money banks can lend. As a result, interest rates will ______ and economic growth will ______.

Consumers can choose from hundreds of different kinds and producers of cheese, each with a slightly different flavour and texture. This type of market structure is known as ______.

The price of producing an item declines due to improved technology. The supply curve should shift to the left.