True/False

Question 1

When a nation buys more goods from other nations than it sells to them, that nation has a favorable balance of trade

Answer 1

False

Question 2

Eastern European nations pioneered the economic philosophy of mercantilism

Answer 2

False

Question 3

With capitalism, the government generally has more control over the individual business owner

Answer 3

False

Question 4

Public goods are usually provided by government because business firms could not supply them and make profit

Answer 4

True

Question 5

Donald trump is a socialist

Answer 5

False

Question 6

Exploration is not one of the five points of mercantilism

Answer 6

False

Question 7

The full title of Adam smiths landmark economic treaties is :”an inquiry into the nature and causes of nations”

Answer 7

False

Question 8

According to the classical definition, liberalism does not equal Liberty

Answer 8

False

Question 9

One of the three functions of government according to Adam smith is to protect its citizens from foreign invasion

Answer 9

True

Question 10

Because it denies the legitimacy of government, radical capitalism is approved by scripture

Answer 10

False

Question 11

A partnership is a business enterprise with two or more persons as the owners

Answer 11

True

Question 12

A limited partner holds all management responsibilities and makes all business decisions

Answer 12

False

Question 13

A corporation is not a separate entity recognized by law

Answer 13

False

Question 14

Surety is the act of becoming security for or pledging to undertake another debt

Answer 14

True

Question 15

A business firm with one owner is called a sole proprietorship

Answer 15

True

Question 16

Two of the advantages of a partnership are greater management skills and greater possibilities of keeping competent employees

Answer 16

True

Question 17

Two of the disadvantages of a sole proprietorship are unlimited personal financial liability and limited life

Answer 17

True

Question 18

Scripture warns against becoming surety for another’s debt

Answer 18

True

Question 19

Two of the disadvantages of incorporation are lower taxes and less government regulation

Answer 19

False

Question 20

Corporations are the most common for of business organizations in the US

Answer 20

False

Question 21

The S&P 500 is intended to give a broad perspective on business in the US

Answer 21

True

Question 22

Those who actively buy and sell stocks for the purpose of taking advantage of short term price changes are engaging in speculation

Answer 22

True

Question 23

When stock prices rise in an industry or across the entire market simply because of expectations and they rise in excess of the corporations true value, it is called a speculative bubble

Answer 23

True

Question 24

A group of stocks which are organized to help identify trends in certain industries are called a speculative bubble

Answer 24

True

Question 25

An IPO is known as an initial private offering

Answer 25

False

Question 26

The NASDAQ is the largest stock exchange in the US that has no trading floor

Answer 26

True

Question 27

The S&P 500 tracks industrial production along with other types of industries

Answer 27

True

Question 28

“But high, sell low”

Answer 28

False

Question 29

Stock exchanges originated in Ireland and Belgium

Answer 29

False

Question 30

The first stock exchange in the US developed in Philadelphia in 1790

Answer 30

True

Question 31

A loose oligopoly is one in which the bottom four firms account for 50-75% of the industry’s total sales

Answer 31

False

Question 32

An oligopoly composed of more than two businesses is called a duopoly

Answer 32

False

Question 33

Collusion is when companies agree to not work together

Answer 33

False

Question 34

Perfect competition exists when there are many procedures selling an identical product

Answer 34

True