Business and Finance Unit 3

The amount of goods or services a consumer is willing to buy at various prices is called demand. True
The programs initiated by the government in the 1930s were collectively called the _____, and helped to grow the U.S. economy out of the Great Depression. New Deal
A market economy that exists without any government regulation is _____. laissez-faire
Which of the following contribute to changes in the economy? Seasons
The economy is driven by _____. all of the above
_____ is the total market value of all goods and services a country produces in one year. Gross Domestic Product
The government uses a number of ways to make it difficult for a business to get started. False
The United States uses a mixed economy. True
The total of tools, equipment, machinery, and buildings used to produce goods and services is called supply. False
In the controlled economy of communism, what is produced and the price it is sold at are decided by _____. a central committee of the government
Businesses often make more money than they spend on wages, rent, cost of raw materials, and other costs. When a business has this surplus income, it is not called savings, but is called _____. profit
Which of the following is an example of individual needs? both food and shelter
A want in economic terms is something that _____. all of the above
Services are considered tangible items that can be weighed. False
Societal needs are satisfied by a mix of government employees and programs, not-for-profit organizations, and volunteers. True
_____ is the document one creates to plan and keep track of expenses. a budget
The money you have left over after you have accounted for your necessities and your budgeted desires is your savings. True
It is advisable to spend less money on wants than you do on needs. True
Professor Maslow’s description of the process we move through to meet needs is called his _____. Hierarchy of needs
The U.S. economy is driven by _____. supply and demand
When the supply does not meet the wants and needs of people, then _____ exists. scarcity
Advertisers in our economy target society’s _____ to make people believe they cannot live without a product. unlimited wants
Tools, buildings, and labor are examples of _____. capital resources
Resources that cannot be replaced when used up are called _____ resources. nonrenewable
An important goal for socially responsible companies is to conserve scarce natural resources. True
The obligation to contribute to the overall well-being of a community is called ______. social responsibility
Unlimited wants and needs help motivate people to find jobs and pursue an education. True
Sustainability is a business practice that could lead to greater profits. True
Sustainable development is both a political term and an environmental goal. True
Which of the following is not an economic system? revisionist
The Inuit of the Arctic region have maintained a _____ economy for centuries. mixed
The cornerstone of our economy is _____. capitalism
Which of the following describes the stage in the economic cycle that follows growth? peak
The average economic cycle from peak to peak typically lasts _____. 3-5 years
Our system of laws is based on all but which of these? private contracts
The mission of the Department of Commerce includes all but which of the following? administer the unemployment trust fund
Congress passed the Sherman Antitrust Act, which prohibits companies from forming monopolies, in _____. 1890
Which of the following is not a factor of production? litigation
Which of the following is a need and not a want? food
Which of the following groups contribute to meeting a community’s societal needs? all of the above
Which is not a recognized sector of the U.S. economy? self-interest sector
The Welfare Reform Act of 1996 _____. mandated collaboration among the public, private, and social sectors of the economy
The most appropriate strategy for budgeting needs and wants is to _____. budget for needs first, use a fraction of the remaining money for wants, but put the rest into savings
Abraham Maslow was an American psychologist who _____. described the indivuduals heirarchy of needs starting with the most basic of needs and reaching self-actualization
Productivity is _____. all of the above
Opportunity cost is _____. none of the above
Goods are typically tangible while _____ are typically intangible. services
In the United States, corporations are treated as individual citizens under the law. True
The Federal Reserve is a division of the Treasury Department. False
People cannot live if they do not meet their basic needs. True
False scarcity occurs when a producer or retailer deliberately withholds inventory from market, despite rising demand. True
Services typically require some level of interaction between the buyer and seller (service provider). True
The factors of production have limited availability and, because of this, producers must constantly evaluate how much of any one factor of production they wish to commit to a product or service. True
Which of the following is false about the reasons to keep organized financial records? Organized financial records allow workers to receive a higher rate of pay.
A company might hire an accountant if it wants help with which of the following duties? all of the above
The acronym CPA stands for _____. certified public accountant
The equation Assets = Liabilities + Owner’s Equity is called the equation. accounting
The main purpose of a balance sheet is to _____. show a business’s financial state
a business’s regulary occuring expenses are itemized in the ________ budget NOT MASTER
The name of the budget that plans for how the business will run until it becomes self-sustaining, i.e. until it begins to make a profit, is called a budget. start-up
A summary budget, one that contains the combined information of the flexible and operating budgets and is compiled annually for the consideration of upper management, is called a budget. master
Variable expenses, those that fluctuate and depend on unpredictable events or inexact scenarios, are itemized in a budget. flexible
The first thing a business should do when making a budget is to check standards. NOT OPERATING
_____ is anything that people accept as a standard for payment. money
U.S. currency is produced by the _____. u.s bureau of engraving
Banks once were able to print their own money true
FDIC stands for _____. federal deposit insurance coropation
U.S. currency is often called a _____. greenback
A financial institution is any business whose primary operations are handling and managing money. True
Which of the following is not one of the roles of the Federal Reserve? providing individuals with mortgage loans
Collateral is something of value a person puts up for a loan, such as a car or house, so that the lending institution can take it if you do not pay back the loan. True
What is the economic term that encompasses money or property, used by businesses or individuals, to expand assets and investments? capital
Prior to the Great Recession, it was very difficult for a family to secure a mortgage loan. False
Which of the following is not one of the guiding questions to creating a Strategic Business Plan? “What do we want”
The four key concepts to forming a strategic business plan are vision, mission, _____________________, and strategy. Values
Market research is the process associated with the controversial act of “data mining” or acquiring information about potential customers. True
The difference between a mission statement and a vision statement is: A mission statement is about action and polices now, while the vision statement describes the ideal to which an enterprise aspires.
Fill in the Blank: A business competitor is, in simplest terms, another enterprise that shares a Target Market
An S-T-P strategy has three phases. What does each letter stand for? Situation Target Proposal
In the Draw-See-Think-Plan, in which stage do you imagine the steps that will take you from the current situation to the ideal situation? NOT PLAN
PEST Analysis, a framework for understanding different facets of the world in which a business operates, looks particularly at Political, ______________Social, and Technological factors. Economic
EPISTLE (or, sometimes, EPISTEL) is an acronym used to describe a multifaceted analytical approach to understanding the global context of an enterprise. The letters in the acronym stand for: Environmental, political, informatic, social, technological, legal and economic
Of the analytical tools we learned in this lesson, which is designed to describe not only the external factors that influence the operations of a business, but also an enterprise’s internal factors of success and opportunities for expansion in the marketplace? NOT EPISTLE Analysis
Which of the following is not financial information most businesses require? NOT NONE OF THESE
The accounting equation is _____. Assets = Liabilities + Owners Equity
The master budget may be considered the _____. company’s blueprint
The Operating Budget focuses on _____. sales and expenses
One benefit of consulting industry standards is _____. it allows business owners to compare their structure and accounting procedures with the accepted guidelines in the industry
Which of the following institutions accept customer deposits? all of the above
The government agency that insures depositors’ funds in federally insured banks is _____. FDIC
Which of the following is not a financial institution? the title company
The Bank Panic of 1907 was caused by _____. NOT ALL OF THE ABOVE
The Federal Reserve is governed by _____. a Board of Governors representing different regions of the country and different industries
Which of the following is not a question business executives will ask as part of their strategic planning? When will our competitors succeed?
Which is not a key concept for a strategic business plan? fears
Which of the following attributes of a competitor is important in strategic planning? all of the above
Which of the following is not an activity associated with market research? none of the above
A SWOT analysis does not reveal _____. outdated use of technology
There is only one accepted format for a balance sheet. False
Banks are not authorized to earn money on individual’s depoits other than the fees charged for maintaining the account. False
Many check cashing services are able to make loans. True
The amount of interest a bank pays a depositor for placing money in a savings account is the same amount of interest they charge customers who borrow money in the form of a loan. False
When you take a car loan, the car you purchased is used as collateral. True
Banks will frequently curtail extending business credit during periods of economic downturn. True
A business need only move through the strategic business planning process once. False
The Federal Reserve System is the nation’s central bank. True
The Small Business Administration regularly loans funds to small businesses. False
A business should not be concerned with where they hope to be in twenty years. False

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