BGS, BSGS Bachelor of General Studies Economics and Business 2 — Questions and Answers
Question 1: What is the term for a trade policy that restricts imports to protect domestic industries?
- Free Trade
- Protectionism (Correct answer)
- Globalization
- Liberalization
Correct answer: Protectionism
Protectionism uses tariffs, quotas, and subsidies to shield domestic producers from foreign competition.
Question 2: Which economic system is characterized by private ownership of resources and free market competition?
- Communism
- Command Economy
- Capitalism (Correct answer)
- Mixed Economy
Correct answer: Capitalism
Capitalism relies on private ownership, market prices, and competition to allocate resources and generate wealth.
Question 3: What is 'opportunity cost' in economics?
- The direct dollar cost of a product
- The value of the best alternative forgone when making a choice (Correct answer)
- The cost of production inputs
- The tax paid on a business transaction
Correct answer: The value of the best alternative forgone when making a choice
Opportunity cost is the value of the next best alternative you give up when choosing one option over another.
Question 4: Which financial statement shows a company's assets, liabilities, and shareholders' equity at a point in time?
- Income Statement
- Cash Flow Statement
- Balance Sheet (Correct answer)
- Annual Report
Correct answer: Balance Sheet
The balance sheet is a snapshot of what a company owns (assets), owes (liabilities), and the owners' stake (equity).
Question 5: What does 'supply and demand' fundamentally determine in a free market?
- Government spending levels
- Prices and quantities of goods sold (Correct answer)
- Corporate tax rates
- Employment regulations
Correct answer: Prices and quantities of goods sold
The interaction of supply and demand determines equilibrium price and quantity in a competitive market.
Question 6: What type of unemployment occurs when workers are between jobs or searching for better positions?
- Structural Unemployment
- Cyclical Unemployment
- Frictional Unemployment (Correct answer)
- Seasonal Unemployment
Correct answer: Frictional Unemployment
Frictional unemployment is a natural, short-term state that occurs as people transition between jobs.
BGS, BSGS Bachelor of General Studies Economics and Business 2
What is the term for a trade policy that restricts imports to protect domestic industries?