Introduction to entrepreneurship/IENT103/Economics/Quiz

The questions which follow provide a basic knowledge test of selected concepts covered in this learning pathway: Principles of economics for small businesses.

The questions published at the end of each learning pathway are re-used for the knowledge test for learners interested in earning a digital badge or certificate of participation for the Financing a business start-up (IENT103) micro-course. Please consult the Certify participation page for more information.

True - false questions

Indicate whether the following statements are true or false:

• In the context of the IENT103 materials, economic systems are all based on the question of why something is being produced.
  • True
    • Incorrect. They are based on the questions what to produce, how (and how much) to produce) and who receives the production output.
  • False
    • Correct.
• A market economy is based on the principle of public ownership of businesses
  • True
    • No, a market economy is based on the principle of private enterprise.
  • False
    • Correct.
• A competitive market is made up of multiple buyers and sellers.
  • True
    • Yes, that’s true
  • False
    • Incorrect, in a competitive market, no individual buyer or seller can determine the market price.
• If a government is not involved in the economic system of its country in any way, the system is a free market.
  • True
    • Yes, that’s true.
  • False
    • Incorrect. The government does not intervene in a free market system.

Multiple choice questions

• Which ONE of the following statements is NOT true about a market economy?
  • In a market economy, the supply of goods and services will influence the price
    • This statement is true. Try again.
  • In a market economy, economic decision-making is made by the government
    • Well done! This is incorrect. In a market economy, decisions are made through markets.
  • In a market economy, businesses supply goods and/or services determined by demand
    • This statement is true. Try again.
  • In a market economy, consumer demand will determine the price of goods and services
    • This statement is true. Try again.
• In economic systems, when the supply of a good is the same as the demand, this is known as (select one answer):
  • An economic balance
    • Not quite - try again.
  • An economic surplus
    • No. A surplus is when the supply of a good is greater than the demand for that good.
  • An economic equilibrium
    • Yes, that’s right.
  • An economic shortage
    • No. A shortage is when demand for a good is greater than the supply.
• Which ONE of the following statements about economic growth is INCORRECT?
  • Economic growth must include the effects of inflation
    • Well done! This is incorrect. To be most accurate, measurement of economic growth must remove the effects of inflation.
  • Economic growth results in the creation of more jobs
    • This statement is correct.
  • Economic growth is the economic indicator most business people aim to achieve
    • This statement is correct.
  • Economic growth can be measured by Gross Domestic Product
    • This statement is correct.
• Which ONE of the following economic indicators is reported on an almost daily basis?
  • The inflation rate
    • Try again.
  • The monetary policy rate
    • Try again.
  • The price of oil
    • That’s right - the price of oil is reported nearly on a daily basis, though the amount of crude oil produced daily is not reported until the end of the month.
  • The unemployment rate
    • Try again.