AnswersRAIL NCAA OC Economics 2027Business Structures

Business Structures — Unit test Answers

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Which best describes how a recession develops as demand and production decrease?

A
The recession enters a recovery period.
B
The recession slows.
C
The recession accelerates.
D
The recession starts and stops.
2
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Cooperatives save members money by

A
purchasing supplies and services as a group.
B
securing financing from banks as a group.
C
charging more to sell their products as a group.
D
sharing all profits democratically as a group.
3

Which scenario best reflects the relationship between production and demand in a recession?

A
Car dealerships have minimal overstock.
B
Car dealerships are not restocking.
C
Car dealerships cannot sell their stock.
D
Car dealerships cannot obtain stock.
4

Which event most likely explains renewed demand in a recovery period?

A
Consumers choose to save more and spend less.
B
Economic policy renews consumer confidence and demand.
C
Producers decrease prices to prompt demand and recovery.
D
Production decreases to prompt increased demand.
5

During a recession, what is one way governments try to encourage growth?

A
by increasing unemployment benefits
B
by stopping government spending
C
by requiring firms to maintain production
D
by eliminating all tax breaks
6

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the long run?

Question illustration
A
Output remains constant.
B
Output increases.
C
Output cannot be predicted.
D
Output decreases.
7

Rabia does not currently have a job, but declined a job offer because she feels her skills merit better pay and a better position. Which terms can be used to describe Rabia? Select two options.

A
cyclically unemployed
B
domestically unemployed
C
frictionally unemployed
D
structurally unemployed
E
still employed
F
unemployed
8

Which is the best definition of inflation?

A
a gradual decrease in the price of goods and services
B
a gradual increase in the price of goods and services
C
an exponential decrease in the price of goods and services
D
an exponential increase in the price of goods and services
9

Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?

A
Gasoline costs more to produce and purchase than tomatoes.
B
Gasoline is imported from other nations at a higher rate than tomatoes.
C
Americans purchase many more boxes of tomatoes than barrels of gasoline.
D
Americans spend more money on gasoline than tomatoes, on average.
10

Which best describes why taxes and savings are considered leakage factors?

A
They take money out of households.
B
They take money out of the economic system.
C
They take money out of the economic sectors.
D
They take money out of the financial sector.
11

The graph shows changes in GDP in the United States from 2009 to 2011.How did the contribution of the services sector to GDP change between 2009 and 2011?

Question illustration
A
It rose by less than 1 percent.
B
It fell significantly.
C
It rose significantly.
D
It stayed exactly the same.
12

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.
13

Which of the following is a characteristic of prosperity in the peak phase of the business cycle?

A
stagnant prices
B
high levels of production
C
ambivalence about the economy
D
reduced incomes
14

Which unemployment rate do most economists consider to be acceptable in the United States?

A
0 percent
B
5 percent
C
10 percent
D
20 percent
15

The graph shows data for the years 2010 through 2012.Which might be a better title for this graph?

Question illustration
A
Total Exports for the United States and China
B
Trade Between China and the United States
C
Unemployment in the United States and China
D
The History of International Trade
16

How do bonds generate income for investors?

A
Bonds depreciate in value.
B
Bonds protect investors from bankruptcy.
C
Bonds pay interest to the bank that sold the bond.
D
Bonds pay a specified amount to the investor at maturity.
17

The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012.

Question illustration
A
There is no link between prices and unemployment.
B
Rising unemployment rates drive prices higher.
C
Falling prices drive unemployment rates lower.
D
As unemployment rates rise, average prices fall.
18

Which best describes what a market index does?

A
An index measures market performance.
B
An index measures economic trends.
C
An index measures growth.
D
An index measures the performance of a single stock.
19

There are four stages in an economic recovery. 1. increased production2. rising demand (occurs twice)3. increased hiring In which order do these stages occur?

A
2, 1, 2, 3
B
3, 2, 1, 2
C
2, 3, 1, 2
D
2, 1, 3, 2
20

Which is true about investments and risk?

A
Low-risk investments have a high return over the long run.
B
High-risk investments usually fail.
C
Safe investments are always somewhat profitable.
D
Every investment carries some degree of risk.

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