AnswersCMS 2026-2027 Economics and Personal Finance CREDIT RECOVERYThe Principles and Practice of Free Market Capitalism

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1
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How do banks help businesses to grow?

A
They provide loans to businesses to expand.
B
They preside over significant business decisions.
C
They take away the owner's right to own the business.
D
They withhold profits for businesses to expand.
2
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Examples of raw materials and labor include

A
yarn.
B
knitters.
C
wool.
D
frames.
E
needles.
F
weavers.
3

What factors may influence price fluctuations in a free market economy? Select three options.

A
Property rights
B
Patents
C
Supply
D
Demand
E
Asset appreciation
F
Economic conditions
G
Asset depreciation
4

What happens when the demand for a product decreases but the supply increases?

A
The owner of a company fixes the price of the product.
B
The government allows companies to set the price of the product.
C
The price of the product increases due to high supply.
D
The price of the product decreases due to low demand.
5

How does the market play an essential role in free market capitalism? Select two options.

A
It helps sellers sell their products in one place.
B
It helps sellers to move to new markets to sell their products.
C
It helps determine the price of products.
D
It helps people trade worldwide.
E
It helps buyers buy one product for a lifetime.
6

Who owns the factors of production in a free market economy?

A
The labor
B
The stockholders
C
The business owners
D
The bank
7

How do prices influence choices?

A
People learn more about product brands.
B
People decide what and when to buy products.
C
People pay more taxes.
D
People choose which item should be available in the neighborhood.
8

Which is an example of raw materials in the factors of production?

A
The manufacturers who work in the factory.
B
The phone manufactured by the phone manufacturer.
C
The metals and recyclable plastic.
D
The factory where phones are manufactured.
9

The supply of corn and spinach has been impacted by a natural disaster. What is most likely to occur to the price of these crops?

A
Prices of corn and spinach will decrease because farmers will not want to sell them.
B
Prices of corn and spinach will increase because supplies will be limited.
C
Prices of corn and spinach will increase because supplies will increase.
D
Prices of corn and spinach will decrease because consumers will avoid buying these goods.
10

Which is an example of capital in the factors of production?

A
The tractor was used to plow fields.
B
The money earned after selling the crops.
C
The crop was grown on a farm.
D
The farmers working on the farm.

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