Economics for Business Study Guide Questions
Course Introduction
Economics for Business explores the fundamental principles of microeconomics and macroeconomics as they apply to real-world business decision-making. The course examines market structures, supply and demand, pricing strategies, and the impact of government policies on the business environment. Students will analyze economic indicators, assess global economic trends, and develop critical thinking skills to interpret economic data relevant to managing businesses effectively. Through practical case studies and applications, learners gain an understanding of how economic theory informs strategies for production, investment, and competition in various industries.
Recommended Textbook
Principles of Macroeconomics 4th Canadian Edition by Robert H. Frank
Available Study Resources on Quizplus
16 Chapters
2776 Verified Questions
2776 Flashcards
Source URL: https://quizplus.com/study-set/3377
Page 2
Chapter 1: Measuring Macroeconomic Performance: Output and
Prices
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/67021
Sample Questions
Q1) If you make an interest-free loan of $10,000 to a friend to help her get started in her new business and the interest rate charged by banks on similarly-risky loans is 15%,then the opportunity cost of the loan is equal to
A) $10,000.
B) $1,500.
C) $11,500.
D) $0.
E) $8,500.
Answer: B
Q2) Which of the following is a microeconomic statement?
A) Tariff barriers hurt all Canadians.
B) Inflation will remain low for the next two years.
C) Inflation and unemployment will remain low for the next two years.
D) Increased gasoline prices have raised taxi fares by 10%.
E) National output remained constant last year.
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Measuring Macroeconomic Performance:
Saving and Wealth
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/67013
Sample Questions
Q1) Maria can produce 100 pounds of tomatoes or 25 pounds of squash in her garden each summer,while Tonya can produce 50 pounds of tomatoes or 25 pounds of squash.If the production possibilities curves are drawn with tomatoes on the vertical axis and squash on the horizontal axis,then the absolute values of the slope of Maria's and Tonya's production possibilities curves,respectively,are
A) 1/4 and 1/2.
B) 1/2 and 1/4.
C) 4 and 2.
D) 2 and 4.
E) 100 and 50.
Answer: C
Q2) When it is impossible to reorganize economic resources so that at least one person is better off while nobody is worse off,we have attained
A) allocative efficiency.
B) productive efficiency.
C) absolute advantage
D) comparative advantage.
E) a point outside the production possibilities curvE.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Measuring Macroeconomic Performance:
Wages, Employment and the Labour Market
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/67012
Sample Questions
Q1) Suppose that one observes that,when the price of peanut butter increases,the demand for crackers increases.One must conclude that
A) peanut butter and crackers are complements.
B) peanut butter and crackers are substitutes.
C) peanut butter and crackers are normal goods.
D) peanut butter and crackers are inferior goods.
E) peanut butter and crackers are superior goods.
Answer: B
Q2) The supply and demand model is not appropriate when analyzing markets where A) there are many buyers.
B) there are few sellers.
C) suppliers provide identical products.
D) transactions occur easily.
E) both buyers and sellers know all the information about the product.
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Short-Term Economic Fluctuations
Available Study Resources on Quizplus for this Chatper
131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/67011
Sample Questions
Q1) Output per employed worker is called
A) total output.
B) the average standard of living.
C) economic growth.
D) output per person.
E) average labour productivity.
Q2) When jobs are easy to find,wage increases are frequently given,and businesses are doing well,the economy is most likely in a(n)
A) expansion.
B) depression.
C) recession.
D) surplus.
E) shortagE.
Q3) If tax revenues equal 25% of total output and government expenditures equal 20% of total output,then there is a
A) budget deficit.
B) budget surplus.
C) trade imbalance.
D) trade deficit.
E) trade surplus.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Spending and Output in the Short Run
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/67010
Sample Questions
Q1) Peg's Manicure Manor did 4,000 sets of nails in the year 2011 and 4,500 sets of nails in the year 2012.The price of a set of nails was $20 in 2011 and $22 in 2012.If the year 2011 is the base year,Peg's contribution to nominal GDP in 2011 was _________ and in 2012 was _________.
A) $80,000;$88,000
B) $80,000;$90,000
C) $80,000;$99,000
D) $88,000;$90,000
E) $90,000;$99,000
Q2) The fact that gross national product is less than gross domestic product in Canada indicates that
A) the value of profits,dividends,and interest flowing in to Canada exceeds the value flowing out.
B) the value of profits,dividends,and interest flowing out of Canada exceeds the value flowing in.
C) real GDP is less than nominal GDP.
D) net domestic product exceeds gross domestic product.
E) income is falling in Canada.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/67009
Sample Questions
Q1) If the consumer price index in 1980 was 44.0 (2002 is the base period)and it was 49.5 in 1981,what is the best estimate of the rate of inflation from 1980 to 1981?
A) 8.5%.
B) 9.4%.
C) 11.1%.
D) 12.5%.
E) 14.4%.
Q2) The Canadian recessions of the early 1980s and the early 1990s were both associated with attempts by the Bank of Canada to produce A) deflation.
B) disinflation.
C) stable inflation.
D) accelerating inflation.
E) more equitable distribution.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Money, Prices and the Reserve Bank
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/67008
Sample Questions
Q1) Which of the following statements is NOT true about the labour market during economic fluctuations?
A) The unemployment rate rises during recessions.
B) The unemployment rate drops during expansions.
C) The part of unemployment that is associated with recessions is called cyclical unemployment.
D) Real wages grow quickly during recessions.
E) Workers are less likely to receive promotions during recessions.
Q2) All of the following are characteristics of short-term economic fluctuations EXCEPT A) expansions and recessions are felt throughout the economy.
B) recessions occur at regular and predictable intervals.
C) unemployment rises during recessions.
D) durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries.
E) recessions tend to be followed by a decline in inflation.
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: The Reserve Bank and the Economy
Available Study Resources on Quizplus for this Chatper
202 Verified Questions
202 Flashcards
Source URL: https://quizplus.com/quiz/67007
Sample Questions
Q1) In the basic Keynesian model,a tax increase
A) reduces short-run equilibrium output.
B) increases short-run equilibrium output.
C) reduces potential output.
D) increases potential output.
E) moves short-run equilibrium output to potential output.
Q2) Suppose C = 100 + 0.75(Y - T)and T = 200,I = 150,G = 250 and NX = 50.Then,an increase in net exports from NX = 50 to NX = 65 will result in an increase in Y (GDP)of
A) 25.
B) 35.
C) 50.
D) 60.
E) 75.
Q3) In the basic Keynesian model,an increase in transfer payments
A) reduces short-run equilibrium output.
B) increases short-run equilibrium output.
C) reduces potential output.
D) increases potential output.
E) moves short-run equilibrium output to potential output.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: The Aggregate Demand - Aggregate Supply
Model
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/67006
Sample Questions
Q1) Holding money as a store of wealth has the advantage of being useful as a medium of exchange.The disadvantages of holding your wealth in the form of money are that it
A) may be stolen or lost,and people may think you're a smuggler or drug dealer.
B) is difficult to trace,and may be lost or stolen.
C) may be lost or stolen,and usually pays no interest.
D) pays no interest,and it is difficult to trace.
E) pays no interest,and people may think you're a smuggler or drug dealer.
Q2) The specialization in production made possible by the use of money to avoid barter is an illustration of the
A) scarcity principle.
B) principle of comparative advantage.
C) principle of increasing opportunity cost.
D) benefits of diversification.
E) cost-benefit principlE.
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Macroeconomic Policy
Available Study Resources on Quizplus for this Chatper
128 Verified Questions
128 Flashcards
Source URL: https://quizplus.com/quiz/67020
Sample Questions
Q1) When the Bank of Canada conducts expansionary monetary policy,the nominal interest rate ______ and the real interest rate _______.
A) increases;increases
B) increases;decreases
C) decreases;increases
D) decreases;decreases
E) decreases;stays the same
Q2) To close a recessionary gap,the Bank of Canada _______ interest rates,which ______ planned aggregate expenditure and _______ short-run equilibrium output.
A) raises;increases;increases
B) raises;decreases;increases
C) raises;decreases;decreases
D) lowers;increases;decreases
E) lowers;increases;increases
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: The Economy in the Long Run: an Introduction to Economic Growth
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/67019
Sample Questions
Q1) One explanation for the inverse relationship between the price level and output,as depicted by a downward-sloping AD curve,is that a fall in the domestic price level,other things including the exchange rate and the foreign price level remaining constant,makes domestic goods ___________ to foreign consumers and foreign goods more expensive to Canadians,which ___________ Canada's net exports.This is called the ___________ on spending.
A) more expensive;increases;foreign trade effect
B) cheaper;increases;real balance effect
C) cheaper;increases;foreign trade effect
D) cheaper;decreases;foreign trade effect
E) cheaper;decreases;real-balances effect
Q2) If the SRAS and AD curves intersect at an output level to the right of the LRAS curve,then
A) there is an expansionary gap,with Y > Y*.
B) there is a recessionary gap,with Y < Y*.
C) there is an expansionary gap,with Y < Y*.
D) there is a recessionary gap,with Y > Y*.
E) there is no output gap and Y = Y*.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: The Production Function Approach to Understanding Growth
Available Study Resources on Quizplus for this Chatper
211 Verified Questions
211 Flashcards
Source URL: https://quizplus.com/quiz/67018
Sample Questions
Q1) Based on the diagram above,starting from a long-run equilibrium at point C,a tax increase that decreases aggregate demand from ADI<sup>1</sup> to ADI will lead to a short-run equilibrium at point ________,and eventually to a long-run equilibrium at point ________,due to falling inflation and the lowering of real interest rates by the Bank of Canada.
A) D;B
B) D;C
C) D;A
D) B;C
E) B;B
Q2) If the correction process that eventually eliminates output gaps works very slowly,so that actual output differs from potential output for long periods of time,then active
A) stabilization policies are probably not justified.
B) stabilization policies may end up doing more harm than good.
C) use of monetary and fiscal policy can cause actual output to overshoot potential output.
D) use of monetary and fiscal policy can help to stabilize output.
E) stabilization policies can cause the output gap to become larger.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Savings, Capital Formation and Comparative
Economic Growth
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/67017
Sample Questions
Q1) Based on the diagram above,if the official value of the Norwegian krone is fixed at $0.14 per krone,then Norway will have a balance-of-payments ___________ of ___________ kroner per period.
A) surplus;2,000
B) surplus;3,500
C) deficit;2,000
D) deficit;3,500
E) deficit;5,500
Q2) A country with a fixed exchange rate will have a balance-of-payments surplus when its exchange rate
A) equals the fundamental value.
B) is overvalued.
C) is undervalued.
D) is flexible.
E) is determined by purchasing power parity.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: International Trade
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/67016
Sample Questions
Q1) Support for free public education based on the idea that the demand curve for educational services does not include all the social benefits of education relies on the
A) principle of comparative advantage.
B) principle of increasing opportunity costs.
C) scarcity principle.
D) equilibrium principle.
E) cost-benefit principlE.
Q2) Organizing production,obtaining financing,assigning workers to jobs,and dealing with suppliers are among the ways that __________ increase(s)average labour productivity.
A) human capital
B) physical capital
C) technology
D) entrepreneurs
E) managers
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Exchange Rates and the Open Economy
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/67015
Sample Questions
Q1) Imports from China accounted for only 1% of Canada's imports in 1989 but ________ of Canada's imports by 2011.
A) 2.5%
B) 4.5%
C) 11%
D) 15.5%
E) 33%
Q2) If the economy in the diagram above is open to trade and the world price of oil is $20 per barrel,then this economy will __________ million barrels of oil.
A) import 7
B) import 9
C) import 11
D) import 18
E) export 7
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Balance of Payments: Net Exports and International Capital Flows
Available Study Resources on Quizplus for this Chatper
247 Verified Questions
247 Flashcards
Source URL: https://quizplus.com/quiz/67014
Sample Questions
Q1) The interest rate promised when a bond is issued is called the
A) coupon rate.
B) real rate of interest.
C) real after-tax rate of interest.
D) dividend rate.
E) discount ratE.
Q2) In an economy without international trade,gross investment must equal ________ saving.
A) national
B) private
C) public
D) life-cycle
E) precautionary
Q3) The saving of the government sector is called ________ saving.
A) private
B) public
C) national
D) aggregate
E) bequest
To view all questions and flashcards with answers, click on the resource link above. Page 18