DAVIS D270 FINAL QUESTIONS WITH
100% CORRECT ANSWERS.
1) The recent global economic crisis has led to which of the following?
A) Governments seeking to impose more constraints on capitalism
B) Governments seeking to eliminate constraints on capitalism
C) Governments seeking to increase the interdependence of developing economies
D) Governments seeking to eliminate the interdependence of developing economies - answer A)
governments seeking to impose more constraints on capitalism
2) Which of the following is most likely a true statement about the global economy since the
1980s?
A) Socialist governments are intervening more in global exchanges.
B) Wealthy countries are exercising total control over emerging markets.
C) Developing countries are losing growing shares of their foreign-exchange reserves.
D) Emerging economies are adopting the principles and practices of free markets. – answer D)
Emerging economies are adopting the principles and practices of free markets.
3) Kyle, an international manager for Apex Industries, has been given the task of analyzing the
economies of three different emerging countries for the firm's potential expansion. Which of the
following questions is LEAST relevant to Kyle's assignment?
A) How much freedom will Apex have to run its foreign operations?
B) What are the current economic policies related to development?
C) What is the likelihood that Apex can fill manufacturing positions with locals?
D) What factors in the country drive or hinder economic change? – answer C) What is the
likelihood that Apex can fill manufacturing positions with locals?
4) Managers at Morrison Manufacturing are considering expanding the firm's production
overseas and want to ensure that the firm is located in a country with a high degree of economic
freedom. Presently, which of the following locations would most likely offer Morrison the
highest economic freedom?
A) Mexico
B) Hong Kong
C) Venezuela
D) North Korea – answer B) Hong Kong
5) Since the late 1980s, the growing emergence of freer markets has been powered by the
realization that ________.
A) Economic growth is directly related to economic freedom
,B) Economic growth has a limited effect on the standard of living
C) Adoption of free market principles contributes to social injustices
D) Centrally planned economies are best designed to deliver progress – answer A) economic
growth is directly related to economic freedom
6) The Economic Freedom Index indicates that economic freedom is positively correlated with
all of the following EXCEPT ________.
A) Life expectancy
B) Literacy
C) Environmental sustainability
D) Diversity – answer D) diversity
7) The recent global credit crisis has interrupted the trend of national economies ________.
A) Rapidly adopting the command market model
B) Steadily adopting the free market model
C) Moving from the mixed to the command model
D) Turning away from the mixed model – answer B) steadily adopting the free market model
8) History suggests that if the economic crisis worsens, we are likely to see more people question
the ________.
A) Fall of communism
B) Legitimacy of capitalism
C) Practicality of mixed market economies
D) Correlation between economic freedom and prosperity – answer B) legitimacy of capitalism
9) According to research, which of the following countries is the strongest supporter of free
markets?
A) China
B) India
C) France
D) Ukraine – answer A) China
10) Which of the following is NOT a characteristic of capitalism?
A) Private ownership of assets
B) Right to profit from individual effort
C) State control of factors of production
D) Private control of investment – answer C) state control of factors of production
11) Communism primarily relies on a system of ________.
A) Private business ownership
,B) Competitive pricing and marketing
C) Market-generated supply and demand
D) Government controlled economic activity – answer D) government controlled economic
activity
12) In a market economy, the patterns of resource allocation are most directly influenced by
________.
A) Government administrators who monitor the equilibrium of supply and demand
B) Industry coalitions that strive to improve the efficiency of production and service
C) Consumer group alliances that negotiate with firms to improve product quality
D) Consumers who "vote" by their personal decision to buy or not buy products – answer D)
consumers who "vote" by their personal decision to buy or not buy products
13) A system in which individuals, rather than the government, make the majority of economic
decisions is commonly referred to as a ________.
A) Command economy
B) Market economy
C) Private economy
D) Mixed economy – answer B) market economy
14) Market economies are primarily characterized by ________.
A) Formal cooperation among government, companies, and workers to achieve stable growth
B) Heavy government spending and high taxation to pay for a range of social services
C) Minimal governmental participation
D) Restricted consumer powers – answer C) minimal governmental participation
15) In a command economy, the goods and services that a country produces, the quantity in
which they are produced, and the prices at which they are sold are planned by ________.
A) Government officials
B) Private industries
C) Individual entrepreneurs
D) Local trade associations – answer A) government officials
16) In a command economy, ________.
A) Businesses and consumers are assumed to be the best judges of how resources should be
allocated
B) The government sets goals and determines the price and quantity of what is produced
C) Different economic sectors coordinate the activities of the federal government
D) Each enterprise sets its goals before making reports to the central government – answer B)
the government sets goals and determines the price and quantity of what is produced
, 17) In Country X, all dimensions of economic activity, including pricing and production
decisions, are determined by the central government. Which term best describes Country X?
A) Market economy
B) Mixed economy
C) Command economy
D) Democratic economy – answer C) command economy
18) Which of the following is most typical of a command economy?
A) Consumers have choices of many substitutes for any given product.
B) Quality of products and services tends to be consistent.
C) The prices of goods and services frequently change.
D) Many products are usually in short supply. – answer D) Many products are usually in short
supply.
19) In a ________ economy, certain sectors of the economy are left to private ownership and
free market mechanisms, while other sectors have significant state ownership and government
planning.
A) State-directed
B) Market
C) Command
D) Mixed – answer D) mixed
20) Some countries opt for a mixed economic system in the belief that although an economic
system should aspire to achieve the efficiencies created by free markets, it must also support
policies to ________.
A) Destabilize poverty rates
B) Achieve low unemployment
C) Restrict economic growth
D) Inequitably distribute wealth – answer B) achieve low unemployment
21) In the Economic Freedom Index, ________ exhibit high economic freedom whereas
________ exhibit little to no economic freedom.
A) Mixed economies; market economies
B) Command economies; market economies
C) Market economies; command economies
D) Centrally planned economies; command economies – answer C) market economies;
command economies
22) Which of the following countries is the best example of a mixed economic model?
A) United States
100% CORRECT ANSWERS.
1) The recent global economic crisis has led to which of the following?
A) Governments seeking to impose more constraints on capitalism
B) Governments seeking to eliminate constraints on capitalism
C) Governments seeking to increase the interdependence of developing economies
D) Governments seeking to eliminate the interdependence of developing economies - answer A)
governments seeking to impose more constraints on capitalism
2) Which of the following is most likely a true statement about the global economy since the
1980s?
A) Socialist governments are intervening more in global exchanges.
B) Wealthy countries are exercising total control over emerging markets.
C) Developing countries are losing growing shares of their foreign-exchange reserves.
D) Emerging economies are adopting the principles and practices of free markets. – answer D)
Emerging economies are adopting the principles and practices of free markets.
3) Kyle, an international manager for Apex Industries, has been given the task of analyzing the
economies of three different emerging countries for the firm's potential expansion. Which of the
following questions is LEAST relevant to Kyle's assignment?
A) How much freedom will Apex have to run its foreign operations?
B) What are the current economic policies related to development?
C) What is the likelihood that Apex can fill manufacturing positions with locals?
D) What factors in the country drive or hinder economic change? – answer C) What is the
likelihood that Apex can fill manufacturing positions with locals?
4) Managers at Morrison Manufacturing are considering expanding the firm's production
overseas and want to ensure that the firm is located in a country with a high degree of economic
freedom. Presently, which of the following locations would most likely offer Morrison the
highest economic freedom?
A) Mexico
B) Hong Kong
C) Venezuela
D) North Korea – answer B) Hong Kong
5) Since the late 1980s, the growing emergence of freer markets has been powered by the
realization that ________.
A) Economic growth is directly related to economic freedom
,B) Economic growth has a limited effect on the standard of living
C) Adoption of free market principles contributes to social injustices
D) Centrally planned economies are best designed to deliver progress – answer A) economic
growth is directly related to economic freedom
6) The Economic Freedom Index indicates that economic freedom is positively correlated with
all of the following EXCEPT ________.
A) Life expectancy
B) Literacy
C) Environmental sustainability
D) Diversity – answer D) diversity
7) The recent global credit crisis has interrupted the trend of national economies ________.
A) Rapidly adopting the command market model
B) Steadily adopting the free market model
C) Moving from the mixed to the command model
D) Turning away from the mixed model – answer B) steadily adopting the free market model
8) History suggests that if the economic crisis worsens, we are likely to see more people question
the ________.
A) Fall of communism
B) Legitimacy of capitalism
C) Practicality of mixed market economies
D) Correlation between economic freedom and prosperity – answer B) legitimacy of capitalism
9) According to research, which of the following countries is the strongest supporter of free
markets?
A) China
B) India
C) France
D) Ukraine – answer A) China
10) Which of the following is NOT a characteristic of capitalism?
A) Private ownership of assets
B) Right to profit from individual effort
C) State control of factors of production
D) Private control of investment – answer C) state control of factors of production
11) Communism primarily relies on a system of ________.
A) Private business ownership
,B) Competitive pricing and marketing
C) Market-generated supply and demand
D) Government controlled economic activity – answer D) government controlled economic
activity
12) In a market economy, the patterns of resource allocation are most directly influenced by
________.
A) Government administrators who monitor the equilibrium of supply and demand
B) Industry coalitions that strive to improve the efficiency of production and service
C) Consumer group alliances that negotiate with firms to improve product quality
D) Consumers who "vote" by their personal decision to buy or not buy products – answer D)
consumers who "vote" by their personal decision to buy or not buy products
13) A system in which individuals, rather than the government, make the majority of economic
decisions is commonly referred to as a ________.
A) Command economy
B) Market economy
C) Private economy
D) Mixed economy – answer B) market economy
14) Market economies are primarily characterized by ________.
A) Formal cooperation among government, companies, and workers to achieve stable growth
B) Heavy government spending and high taxation to pay for a range of social services
C) Minimal governmental participation
D) Restricted consumer powers – answer C) minimal governmental participation
15) In a command economy, the goods and services that a country produces, the quantity in
which they are produced, and the prices at which they are sold are planned by ________.
A) Government officials
B) Private industries
C) Individual entrepreneurs
D) Local trade associations – answer A) government officials
16) In a command economy, ________.
A) Businesses and consumers are assumed to be the best judges of how resources should be
allocated
B) The government sets goals and determines the price and quantity of what is produced
C) Different economic sectors coordinate the activities of the federal government
D) Each enterprise sets its goals before making reports to the central government – answer B)
the government sets goals and determines the price and quantity of what is produced
, 17) In Country X, all dimensions of economic activity, including pricing and production
decisions, are determined by the central government. Which term best describes Country X?
A) Market economy
B) Mixed economy
C) Command economy
D) Democratic economy – answer C) command economy
18) Which of the following is most typical of a command economy?
A) Consumers have choices of many substitutes for any given product.
B) Quality of products and services tends to be consistent.
C) The prices of goods and services frequently change.
D) Many products are usually in short supply. – answer D) Many products are usually in short
supply.
19) In a ________ economy, certain sectors of the economy are left to private ownership and
free market mechanisms, while other sectors have significant state ownership and government
planning.
A) State-directed
B) Market
C) Command
D) Mixed – answer D) mixed
20) Some countries opt for a mixed economic system in the belief that although an economic
system should aspire to achieve the efficiencies created by free markets, it must also support
policies to ________.
A) Destabilize poverty rates
B) Achieve low unemployment
C) Restrict economic growth
D) Inequitably distribute wealth – answer B) achieve low unemployment
21) In the Economic Freedom Index, ________ exhibit high economic freedom whereas
________ exhibit little to no economic freedom.
A) Mixed economies; market economies
B) Command economies; market economies
C) Market economies; command economies
D) Centrally planned economies; command economies – answer C) market economies;
command economies
22) Which of the following countries is the best example of a mixed economic model?
A) United States
