Understanding Canadian Business 10Th Canadian Edition By William G Nickels – Test Bank

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Understanding Canadian Business 10Th Canadian Edition By William G Nickels – Test Bank

 Sample Questions

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Chapter 02

How Economic Issues Affect Business

 

 

True / False Questions

1. The Canadian economy is an integral part of the world economy.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-01 How Economic Conditions Affect Business

2. Economics is the study of how people use resources to produce goods and services and distribute them for consumption among various competing groups and individuals.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

3. Macroeconomics is the economic perspective that looks at the operation of a nation’s economy as a whole.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

 

 

4. Microeconomics focuses on the decisions and behaviour of people and organizations in particular markets.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

5. Resource development is concerned with finding the best way to utilize the declining amount of resources a society has available.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

6. Economist Sue Pligh is examining how consumers in the automobile market have responded to recent price increases by car manufacturers. Sue’s efforts reflect the microeconomic perspective of economics.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

7. The primary difference between macroeconomics and microeconomics is that macroeconomics looks at long run economic problems while microeconomics examines short run economic problems.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-01 Describe basic economics.
Topic: 02-02 What Is Economics?

8. Followers of Malthus today believe that there are too many people in the world.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-03 The Secret to Creating a Wealthy Economy

9. The latest world statistics show the population increasing more rapidly than ever expected.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-03 The Secret to Creating a Wealthy Economy

10. Studies about the effects of population growth on the economy are part of macroeconomics.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-03 The Secret to Creating a Wealthy Economy

11. Adam Smith believed that the key to creating rising standards of living was to limit population growth.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-04 Growth Economics and Adam Smith

12. Adam Smith believed the self-interest of businesspeople would lead them to create needed goods, services, and jobs.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-01 Describe basic economics.
Topic: 02-04 Growth Economics and Adam Smith

13. The “invisible hand” in Adam Smith’s theory refers to the efforts of the government to control the operation of markets.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

14. Adam Smith believed that since businesspeople are motivated to improve their own prosperity, their actions are unlikely to benefit society as a whole.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

15. Adam Smith believed that an economic system couldn’t truly prosper unless people were taught to value the welfare of others above their own personal gain.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

16. The concept of the invisible hand is based on the assumption that the primary motivation of entrepreneurs is to enjoy the financial rewards of their hard work.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

17. Adam Smith felt that incentives to seek personal gain would insure the creation of wealth, but that the government must step in to make sure that this wealth was equitably distributed.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

18. Adam Smith’s theories focused on explaining the best way to divide the fixed resources we have available, rather than on how to create more wealth.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-01 Describe basic economics.
Topic: 02-05 How Businesses Benefit the Community

19. Adam Smith the author of The Wealth of Nations, said that all companies would function best with more government involvement.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-05 How Businesses Benefit the Community

20. Fatima is a citizen of a country that has an economic system that is primarily based on free-market capitalism. Fatima is likely to have the freedom to buy and sell property.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-06 Understanding Free-Market Capitalism

21. Resource development is the system that has led to wealth creation in much of the world.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-06 Understanding Free-Market Capitalism

22. In capitalist countries, the government decides what to produce and how the goods and services will be produced.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-06 Understanding Free-Market Capitalism

23. Capitalism is the foundation of the Canadian economic system.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-06 Understanding Free-Market Capitalism

24. In a free-market system, decisions about what to produce and in what quantities are made by the market.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-07 How Free Markets Work

25. In capitalism, the government prohibits people and businesses from competing with each other.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-07 How Free Markets Work

26. A basic right under capitalism is the right of business to receive funding provided by the government.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-07 How Free Markets Work

27. Just as no country is purely capitalist, no market is truly free.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-07 How Free Markets Work

28. Prices are determined by sellers in a free market.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-08 How Prices Are Determined

29. Under the basic principle of supply, as the price goes down, manufacturers and suppliers of a product are less willing or able to bring that product to the market.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-09 The Economic Concept of Supply

30. Market price is determined solely by supply.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-09 The Economic Concept of Supply

31. Jill owns a bakery that specializes in cheesecakes. Until recently, Jill charged a price of $12 for each cheesecake. At this price, Jill’s customers bought an average of 84 cheesecakes each week. For the last few weeks, she has reduced her price to $10.50 per cheesecake, and her customers have purchased an average of 96 cheesecakes each week. These results are consistent with the law of demand.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-10 The Economic Concept of Demand

32. Demand refers to the quantity of products that people are willing and able to buy at different prices at a specific time.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-10 The Economic Concept of Demand

33. Price is the key factor that determines both quantity supplied, and quantity demanded.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

34. One of the drawbacks of free markets is the fact that competition in such markets undermines the ability of price to adjust to its equilibrium value in the long run.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

35. Supporters of a free market would argue that because supply and demand interactions determine prices, there is no need for government involvement or planning.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

36. At the equilibrium point the quantity consumers desire to buy equals the quantity sellers desire to sell.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

37. If the quantity supplied in a market exceeds the quantity demanded, a shortage will exist.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

38. If a shortage exists in a market for a good, the price of that good will tend to fall.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

39. If we graph the supply and demand curves for a product at a specific time, the point on the graph where the two curves intersect is called the stress point.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

40. In the long run, the actual market price tends to adjust toward the equilibrium price.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

41. Countries that rely on a free-market system often are plagued by persistent shortages or surpluses of goods and services.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-11 The Equilibrium Point and the Market Price

42. In perfect competition, each firm produces a product that is clearly differentiated from the products of other firms in the same market.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

43. A monopoly occurs when there is a single seller for a product or service.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

44. Economists refer to a market in which a few sellers dominate the supply side as monopolistic competition.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

45. Product differentiation is a key to success in monopolistic competition.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

46. Legislation has ended the monopoly status of utilities in some areas.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

47. Under monopolistic competition, product differentiation is a key to success.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

48. Monica notices that just a few big companies produce the vast majority of soft drinks. She would be correct in describing the soft drink industry as an oligopoly.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

49. Harry Cutter is the owner of Harry’s Hairy Business, one of a large number of barbershops that compete against each other in the city where Harry lives. Harry has tried to attract more customers by staying open longer hours than most barbershops, and by advertising heavily on local radio to convince people that he offers the best haircuts in town. Harry appears to be operating in an oligopolistic market.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

50. Under perfect competition, sellers’ products appear to be identical.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-12 Competition within Free Markets

51. A strength of a free-market economic system is that it emphasizes the fair and humane treatment of the less fortunate in society.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-13 Benefits and Limitations of Free Markets

52. Permany is a nation with an economic system that closely approximates pure capitalism. While Permany’s economy is likely to generate a great deal of wealth, it may do a poor job of providing an acceptable level of income for the elderly or disabled.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-13 Benefits and Limitations of Free Markets

53. History shows that free-market capitalism leads to a fair and equitable distribution of wealth.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-13 Benefits and Limitations of Free Markets

54. The greed of businesspeople represents the greatest danger to the operation of a free-market system.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-02 Explain what capitalism is and how free markets work.
Topic: 02-13 Benefits and Limitations of Free Markets

55. Socialists believe that the primary economic function of the government is to promote rapid economic growth.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-14 Understanding Socialism

56. In socialist economies, the government owns some, if not most, basic businesses such as coal mines and utilities.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-14 Understanding Socialism

57. The top tax rate on personal income in most socialist economies is usually lower than the top tax rate on personal income in capitalist economies.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-14 Understanding Socialism

58. The major benefit of socialism is that it creates strong incentives to work hard and take the risks associated with starting and operating a business.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-15 The Benefits of Socialism

59. Workers in socialist countries often get longer vacations and more social benefits than workers in free- market economies.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-15 The Benefits of Socialism

60. Over the past decade, socialist economies have proven to be more successful at innovation and inventions than capitalist economies.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-16 The Negative Consequences of Socialism

61. One drawback of socialism is that it may result in a reduction in the individual’s incentive to work hard.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-16 The Negative Consequences of Socialism

62. Skeeden is a nation with an economic system that features free markets with private ownership of businesses. It still relies on those businesses to create most wealth. However, over time the government of Skeeden has developed some programs and policies designed to help the needy and reduce the level of income inequality. It pays for these programs by levying relatively high taxes on businesses and workers. These arrangements suggest that the economy of Skeeden is moving closer to the adoption of pure capitalism.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-16 The Negative Consequences of Socialism

63. Communism is an economic system where the state makes almost all economic decisions.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

64. One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

65. Some communist countries have not allowed their citizens to practice certain religions or change jobs.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

66. Most communist countries today are suffering from severe economic problems.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

67. Socialism and communism are both variations of a free-market economy.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

68. In the small nation of Equalia, the government owns all of the key businesses. There are severe shortages of many key items, such as food. These features of Equalia’s economy are consistent with a communist economic system.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-17 Understanding Communism

69. Socialism and capitalism are examples of command economies.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-18 The Trend Toward Mixed Economies

70. An important economic trend has been for free-market economies to move more toward socialism while command economies move more toward free markets.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-18 The Trend Toward Mixed Economies

71. In command economies, the government plays a major role in deciding which goods will be produced and who will get them.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-03 Compare the benefits and negative consequences of socialism and communism.
Topic: 02-18 The Trend Toward Mixed Economies

72. Like many nations, Canada has a mixed economy.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-04 Describe the mixed economy of Canada.
Topic: 02-19 Canada’s Mixed Economy

73. In Canada, massive government support was needed to build our first national rail line.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 02-04 Describe the mixed economy of Canada.
Topic: 02-19 Canada’s Mixed Economy

74. In a mixed economy, some allocation of resources is made by government, and some by the market.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 02-04 Describe the mixed economy of Canada.
Topic: 02-19 Canada’s Mixed Economy

75. In recent years, government leaders in Canada have reached broad agreement on the need for the government to continue expanding its role in health care and the regulation of banks and airlines.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 02-04 Describe the mixed economy of Canada.
Topic: 02-19 Canada’s Mixed Economy

Chapter 04

The Role of Government in Business

 

 

True / False Questions

1. Governments try to respond to business needs.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-01 List the seven categories of government activities that can affect business.
Topic: 04-01 Government Affects Business

2. Early Canadian governments placed high tariffs on imports from the U.S. to protect Canadian manufacturers.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-02 Government Involvement in the Economy

3. Canada’s first prime minister is responsible for the National Policy which placed high tariffs on U.S. imports to protect Canada’s fledgling companies.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-02 Government Involvement in the Economy

4. Crown corporations can be found in all provinces.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-03 Crown Corporations

5. While Canada Post and Canada Mortgage and Housing Corp. are crown corporations, Export Development Canada and Hydro One are not.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-03 Crown Corporations

6. Some crown corporations have been set up to provide services not provided by businesses.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-03 Crown Corporations

7. The origin of the CNR (Canadian National Railways) in 1919 was the result of the federal government bailing out a troubled major industry.
   TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-03 Crown Corporations

8. Provinces cannot have crown corporations, as they only exist at the national level.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-03 Crown Corporations

9. The Alberta Heritage Savings Trust Fund and Québec’s Caisse de dépôt et placement are examples of two important federal crown corporations.
   FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

10. The process of selling off crown corporations is called privatization.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

11. The Ontario provincial government partially privatized the Crown corporation Hydro One Inc.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

12. Deregulation refers to the privatization of noncompetitive crown corporations.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

13. Governments play a very minor role in the Canadian economic system.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

14. Canada’s history is replete with many successful examples of government stepping in to produce solutions when the market couldn’t such as the setting up of the CNR and Air Canada.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

15. Deregulation means that the government withdraws certain laws and regulations that seem to hinder competition.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-02 Trace the historical role of government in the Canadian economy and explain why Crown Corporations were created.
Topic: 04-04 The Role for Crown Corporations

16. Canada continues to follow the British North American (BNA) Act.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-05 Laws and Regulations

17. Since Canada was formed in 1867, the federal government has played a significant role in the economy through its laws and regulations.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-05 Laws and Regulations

18. The Canada Health Transfer (CHT), the smallest of the major funds transfer to provinces and territories, was eliminated in 2017.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

19. While the federal government is responsible for health care, it is still up to the provinces and territories to implement The Canada Health Act, and their co-operation is critical for success.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

20. While the Competition Bureau offers significant protection to the average Canadian consumer, it fails to protect them from artificially high prices for goods and service.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

21. The Canadian system of marketing boards has been under attack by various organizations because it does not permit normal competitive conditions to operate in this field.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

22. The sole purpose of Canada’s federal Competition Act is to ensure that all advertising done by corporations meets government standards.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

23. Innovation, Science and Economic Development Canada (ISEDC) administers a variety of laws affecting businesses and consumers.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-06 Federal Government Responsibilities

24. All trade between the provinces in Canada are exempt from restrictive trade barriers.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-07 Provincial Government Responsibilities

25. There are significant interprovincial trade barriers restricting trade and damaging the Canadian economy.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-07 Provincial Government Responsibilities

26. The Competition Bureau sometimes launches investigations to ensure fair completion.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-07 Provincial Government Responsibilities

27. Competition in the marketplace has never been greater than it is today.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-07 Provincial Government Responsibilities

28. In Canada, we have a special system of marketing boards that control the pricing of certain agricultural products.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-07 Provincial Government Responsibilities

29. The dropping of interprovincial trade barriers would have little effect on Canada’s economy.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-08 Municipal Government Responsibilities

30. A new trend is the emergence of the public-private partnership (P3).
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-08 Municipal Government Responsibilities

31. The role of municipalities in consumer protection is limited to regulating signage.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-09 The Bank of Canada

32. Municipalities set certain zoning requirements on businesses including height and distance from the road of all buildings.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-03 Demonstrate why understanding laws and regulations at all levels of government is critical to business success.
Topic: 04-09 The Bank of Canada

33. Monetary policy is directly under the control of the Bank of Canada.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

34. One of the major tools the Bank of Canada uses to influence economic conditions is through its control of interest rates.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

35. The Bank of Canada’s responsibilities include determining the direction of fiscal policy.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

36. Monetary policy adjusts the level of government spending.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

37. Larry wants to buy a new car and is planning to borrow the money from a bank. He has just read in the newspapers that the Bank of Canada is likely to implement policies in the next few weeks that are designed to stimulate the economy, which is currently in a recession. Larry would probably get a lower interest rate on his car loan if he waits until after the Bank of Canada implements its new policies.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

38. Fiscal policy refers to the federal government’s efforts to keep the economy stable by controlling the amount of money in circulation.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

39. The ultimate goal of monetary and fiscal policy is to keep the economy growing.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

40. Senator Spendital has just made a speech deploring the continuous deficits in the federal budget. He is proposing an increase in tax rates to raise more revenue for the government and thus gradually reduce the size of the national debt over a period of several years. The strategy Senator Spendital is proposing is a common type of monetary policy.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

41. When the BoC lowers interest rates, businesses tend to borrow more, and the economy improves.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

42. If twice as much money were available in the economy, prices would fall to half the level they are today.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

43. A decrease in prices is referred to as disinflation.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

44. If the money supply is reduced too quickly, a recession might result.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

45. The global money supply is controlled by the central bank in the United States, called the Federal Reserve Bank.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

46. Stephen Poloz is the director of the U.S. Federal Reserve.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

47. The objective of the monetary policy is to support a level of spending by Canadians that is consistent with the BoC’s goal of price stability.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

48. The target range of inflation, set by the BoC, is between 1 and 3 percent.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

49. The bank rate is the interest rate at which major financial institutions borrow and lend one-day (or overnight) funds among themselves.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-10 Using Monetary Policy to Keep the Economy Growing

50. It can take one or two full quarters for a change in the policy interest rate to have its full effect on inflation.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

51. If the economy grows too fast, it can lead to inflation.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

52. When interest rates rise, consumers and businesses tend to hold less money, to borrow less, and to pay back existing loans.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

53. A rising dollar value means that the amount of goods and services you can buy with a dollar decreases.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-04 Describe how the Bank of Canada influences monetary policy.
Topic: 04-11 Transmission of Monetary Policy

54. Taxes come from a variety of sources.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-12 Taxation

55. Government, at all levels, redistribute wealth through taxation.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-12 Taxation

56. A sin tax is the name for a tax charged on black market items crossing Canada’s southern border.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-12 Taxation

57. The average Canadian family spends more of its income on taxes than it does on food, shelter, and clothing combined.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-12 Taxation

58. Fiscal policy looks at the money supply and interest rates.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-13 Stabilizing the Economy Through Fiscal Policy

59. The annual federal budget reveals federal government financial policies for the coming year.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-13 Stabilizing the Economy Through Fiscal Policy

60. The national debt grows when the government spends over and above the amount it collects in taxes over a specific time, such as a fiscal year.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-05 Explain how taxation and fiscal policy affect the Canadian economy.
Topic: 04-13 Stabilizing the Economy Through Fiscal Policy

61. Governments have many direct and indirect programs designed to help businesses.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-14 Government Expenditures

62. In special, unplanned but important, cases threatening the survival of a major company, the government has a policy of non-intervention.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-14 Government Expenditures

63. All levels of government offer a variety of direct assistance programs to businesses.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-15 Financial Aid

64. Some government aid goes to help industries or companies that are deemed to be very important.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-15 Financial Aid

65. Payments from the federal government to the lower-income provinces are called legislative payments.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-16 Major Federal Programs

66. Transfer payments are direct payments from governments to other governments.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-16 Major Federal Programs

67. Equalization is viewed as a means of maintaining the same level of taxation across Canada, although the level of services provided will vary.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-16 Major Federal Programs

68. In 2017-2018 the federal government will no longer provide billions of dollars in equalization payments to ten provinces.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-16 Major Federal Programs

69. The Territorial Formula Financing program provides territorial governments with financing.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-06 Describe how government expenditures benefit consumers and businesses alike.
Topic: 04-16 Major Federal Programs

70. When advanced technology is involved in government purchasing, governments make a strong effort to ensure that some of the manufacturing is done in Canada.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Hard
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-17 Purchasing Policies

71. Contracts are often awarded to help Canadian businesses even if they are sometimes more expensive than bids from non-Canadian companies.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Easy
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-17 Purchasing Policies

72. Canadian governments will buy in Canada only if the Canadian price offered is equal to, or less than, that offered by a foreign company.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-17 Purchasing Policies

73. The federal government has a “buy foreign” policy when it comes to significant military acquisitions.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-17 Purchasing Policies

74. The federal government in Canada does nothing to encourage industrial development. Such initiatives are all left to the provinces.
    FALSE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-17 Purchasing Policies

75. To encourage industrial development in Canada the federal government runs various incentive programs and offers services through different departments.
    TRUE

 

Accessibility: Keyboard Navigation
Difficulty: Medium
Learning Objective: 04-07 Illustrate how purchasing policies and services assist Canadian businesses.
Topic: 04-18 Services