Practice Test Answers

6 verified answers

Which statement best explains the role of producers in economics?

Producers supply goods and services.

Producers purchase goods and services.

Producers sell shares for companies in the market.

Producers create theories about the market.

Does a depression always follow a recession?

Yes, the trough is always considered a depression.

No, the economy could decline quickly and bypass recession.

No, a depression is indicated when the recession is exceptionally long.

Yes, for recovery to occur, the trough must be reached.

Which best explains why a sole proprietor would want a partner?

to reduce the number of responsibilities.

to make it easier to raise funds for expansion.

to move into a more favorable tax bracket.

to take advantage of little government oversight.

Articles of partnership establish

what business taxes are paid.

what is included in a charter.

how profits and losses are divided.

how businesses can raise capital.

When prices drop below the point where supply and demand meet, it results in

equilibrium.

disequilibrium.

production.

coordination.

How do consumers’ feelings about the economy help contribute to growth?

Positive consumer attitudes increase job prospects.

Positive consumer attitudes influence spending habits.

Positive consumer attitudes can end a depression.

Positive consumer attitudes inspire increased production.

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