I.T.B Exam 1 Flashcards
Demographic changes create new business opportunities. (Chp 1)
True
World trade has both benefits and costs. Which of the following statements best attests to this fact? (Chp 1)
Large companies and small companies agree that the green movement is a global issue. Firms are embracing opportunities to bring value to consumers by creating green products and services.
Globalization has increased among nations. (Chp 1)
True
The threat of terrorism (Chp 1)
is costly to most firms because it is costly to governments who increase taxes to pay for added protection.
Retired people will be draining the U.S. economy of wealth. This is due to: (Chp 1)
the fact there are not enough workers in subsequent generations to support the ongoing drain of older persons into the Social Security system.
If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment—less than 2%), the Fed may decide to
______ Interest rates
(Chp 2)
Increase
the loss of the best and brightest people from their home countries to other countries. (chp 2)
Brain Drain
An incredibly rare stone known as Diamontite is used in many consumer products, including watch faces, smartphones, computer monitors, and tablets. In one year, the price of Diamontite has gone from $8/lb. to $107/lb. Under these circumstances and the fact that more companies are looking to use Diamontite in their products, a graph of the supply and demand for this product would show (Chp 2)
The price of Diamontite to be above the equilibrium price for this rare gem.
T/F: A free-market economic system is one in which the market of buyers and sellers decides what is produced, how much is produced, and how it is distributed. (Chp 2)
True
A major trend around the world today is that
(Chp 2)
free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism.
A(n) _____________ curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period.
(Chp 2)
Demand
Economics was called the “Dismal Science” by Thomas Carlyle because
(Chp 2)
too many people would result in food shortages and shortages of other resources.
T/F: History shows that free-market capitalism leads to a fair and equitable distribution of wealth.(Chp 2)
False
T/F: Adam Smith believed that an economic system couldn’t truly prosper unless people were taught to value the welfare of others above their own personal gain.(Chp 2)
False
T/F: Any output produced by U.S. firms is included in the value of U.S. GDP, even if the output was produced in a foreign country.
(Chp 2)
False
As a business strategy, the strategy behind dumping is to (Chp 3)
gain a foothold in a new market
American companies that produce sophisticated military weaponry are prohibited from exporting that equipment to unfriendly governments, such as Iran. This complete ban on exporting sensitive technology to specific countries is an example of a(n) (Chp 3)
Embargo
Free trade between nations generally results in (Chp 3)
mutually beneficial exchange relationships
A favorable balance of trade occurs when the value of (Chp 3)
imports is less than the value of exports.
T/F: A common market is a group of countries that have no internal tariffs among member nations, yet have a common external tariff.
(Chp 3)
True
A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a
(Chp 3)
foreign subsidiary.
Erin, an American citizen, says that her laptop was made in Japan. Erin purchased a(n) (Chp 3)
Imported item
