Business 101

What are the primary functions of business management?

• Planning, organizing, controlling
• Strategizing, communicating, planning
• Finance, operations, management
• Marketing, accounting, human resource management

The standard of living for a nation’s people depends mainly on

• the quality of the natural environment
• how much political freedom they have
• their incomes and the prices of the good and services they buy
• the amount of labor and capital available employed in the manufacturing sector

The total value of final goods and services produced within a nation’s borders in a given year is known as that nation’s

• aggregate production quota
• aggregate domestic output
• index of aggregate economic output
• gross domestic product

The nation of Tryland has seen the total value of the goods and services it produces increase rapidly over the past year. What is the most likely result of this change?

• A rise in Tryland’s GDP
• A rise in Tryland’s CPI
• A rise in Tryland’s unemployment rate
• A decline in the number of workers who are structurally unemployed

Which of the following statements about government deficit spending is most accurate?

• Although the government used to run big deficits, it has consistently run surpluses since the late 1980s.
• One reason the government has a hard time reducing deficits is that there is a great deal of pressure on the government to increase its spending each year.
• The federal government violates the law by running deficits because the Constitution requires the government to balance its budget each year.
• The government has used deficit spending to lower the national debt.

What measure is used to report price changes at the wholesale level?

• Gross domestic product (GDP)
• Consumer price index (CPI)
• Wholesale price index (WPI)
• Producer price index (PPI)

Jack is the sole proprietor of a gift shop in a small shopping center. Any profit Jack's business earns is

• totally tax-free
• taxed only as Jack's personal income
• taxed only if and when it is distributed to investors
• taxed twice, once as business income, then again as Jack's personal income

What is the easiest form of business to start and to end?

• Sole proprietorship
• Limited partnership
• Corporation
• Cooperative

A(n) ________ is a person who assumes the risk of starting a business.

• manager
• stakeholder
• entrepreneur
• private investor

Which theory states that a nation should produce and sell goods that it produces most efficiently to other countries, and buy goods that are produced more efficiently by other countries?

• Comparative advantage
• Absolute advantage
• Bilateral advantage
• Mercantilism