Business Management Exam Questions and Solutions (Latest Version)
Free Enterprise the system of business in which individuals are free to decide what to produce,
how to produce it, and at what price to sell it
cultural (or workplace) diversity differences among people in a workforce owing to race, ethnicity, and gender
business the organized effort of individuals to produce and sell, for a profit, the goods
and services that satisfy society's needs
Profit what remains after all business expenses have been deducted from sales
revenue
Stakeholder A person or organization with an interest in a particular place or issue.
Economics the study of how wealth is created and distributed
Macroeconomics the study of the national economy and the global economy
Microeconomics the study of the decisions made by individuals and businesses
Economy the way in which people deal with the creation and distribution of wealth
Entrepreneur a person who risks time, effort, and money to start and operate a business
Capitalism an economic system in which individuals own and operate the majority of
businesses that provide goods and services
Market economy an economic system in which businesses and individuals decide what to produce
and buy, and the market determines quantities sold and prices
Consumer products goods and services purchased by individuals for personal consumption
Command economy an economic system in which the government decides what goods and services
will be produced, how they will be produced, for whom available goods and
services wil be produced, and who owns and controls the major factors of
production l
Productivity the average level of output per worker per hour
1/10
, Inflation a general rise in the level of prices
Gross domestic product the total dollar value of all goods and services produced by all people within the
boundaries of a country during a specified time period—usually a one-year period
Deflation Consumer price index a monthly index that measures the changes in prices of a fixed basket of goods
purchased by a typical consumer in an urban area
Producer price index an index that measures prices that producers receive for their finished goods
Business cycle the recurrence of periods of growth and recession in a nation's economic activity
Recession two or more consecutive three-month periods of decline in a country's GDP
depression a severe recession that lasts longer than a typical recession and has a larger
decline in business activity when compared to a recession
Federal deficit a shortfall created when the federal government spends more in a fiscal year than it
receives
National debt the total of all federal deficits
Competition rivalry among businesses for sales to potential customers
Supply the quantity of a product that producers are willing to sell at each of various prices
Demand the quantity of a product that buyers are willing to purchase at each of various
prices
Barter Exchange goods without involving money.
Adam Smith Philosophy (invisible hand) a term created by Adam Smith to describe how an individual's personal gain
benefits others and a nation's economy
Consumer Price Index a monthly index that measures the changes in prices of a fixed basket of goods
purchased by a typical consumer in an urban area
2/10
Free Enterprise the system of business in which individuals are free to decide what to produce,
how to produce it, and at what price to sell it
cultural (or workplace) diversity differences among people in a workforce owing to race, ethnicity, and gender
business the organized effort of individuals to produce and sell, for a profit, the goods
and services that satisfy society's needs
Profit what remains after all business expenses have been deducted from sales
revenue
Stakeholder A person or organization with an interest in a particular place or issue.
Economics the study of how wealth is created and distributed
Macroeconomics the study of the national economy and the global economy
Microeconomics the study of the decisions made by individuals and businesses
Economy the way in which people deal with the creation and distribution of wealth
Entrepreneur a person who risks time, effort, and money to start and operate a business
Capitalism an economic system in which individuals own and operate the majority of
businesses that provide goods and services
Market economy an economic system in which businesses and individuals decide what to produce
and buy, and the market determines quantities sold and prices
Consumer products goods and services purchased by individuals for personal consumption
Command economy an economic system in which the government decides what goods and services
will be produced, how they will be produced, for whom available goods and
services wil be produced, and who owns and controls the major factors of
production l
Productivity the average level of output per worker per hour
1/10
, Inflation a general rise in the level of prices
Gross domestic product the total dollar value of all goods and services produced by all people within the
boundaries of a country during a specified time period—usually a one-year period
Deflation Consumer price index a monthly index that measures the changes in prices of a fixed basket of goods
purchased by a typical consumer in an urban area
Producer price index an index that measures prices that producers receive for their finished goods
Business cycle the recurrence of periods of growth and recession in a nation's economic activity
Recession two or more consecutive three-month periods of decline in a country's GDP
depression a severe recession that lasts longer than a typical recession and has a larger
decline in business activity when compared to a recession
Federal deficit a shortfall created when the federal government spends more in a fiscal year than it
receives
National debt the total of all federal deficits
Competition rivalry among businesses for sales to potential customers
Supply the quantity of a product that producers are willing to sell at each of various prices
Demand the quantity of a product that buyers are willing to purchase at each of various
prices
Barter Exchange goods without involving money.
Adam Smith Philosophy (invisible hand) a term created by Adam Smith to describe how an individual's personal gain
benefits others and a nation's economy
Consumer Price Index a monthly index that measures the changes in prices of a fixed basket of goods
purchased by a typical consumer in an urban area
2/10
