BGS, BSGS Bachelor of General Studies Economics and Business 2

Question 1

What is the term for a trade policy that restricts imports to protect domestic industries?

Accepted Answer

Protectionism

Answer

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?

Accepted Answer

Capitalism

Answer

Capitalism relies on private ownership, market prices, and competition to allocate resources and generate wealth.

Question 3

What is 'opportunity cost' in economics?

Accepted Answer

The value of the best alternative forgone when making a choice

Answer

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?

Accepted Answer

Balance Sheet

Answer

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?

Accepted Answer

Prices and quantities of goods sold

Answer

The interaction of supply and demand determines equilibrium price and quantity in a competitive market.

BGS, BSGS Bachelor of General Studies Practice Test