Question

1. The business cycle looks like rolling waves and has natural rises (recoveries and booms) followed by drops (recessions) and occasionally depressions.

True

False

2. Efficient firms provide the most goods/services using the least amount of resources.

True

False

3. Stockholders include the suppliers, employees, community, and others impacted by a business."

True

False

4. The secret to developing a prosperous free enterprise economy is to ensure the government owns and controls all factors of production.

True

False

Answer 1

1) True

Business cycle also commonly known as economic cycles, includes phases of economic ups and downs. Many a times, economy/business moves into heavy downfall , where economic activities tend to go down like recession and depression. Also at times economy recovers and moves into economic cycle of boom and recovery. The graph of this is somewhat similar to waves. Thus it is a true statement.

2) True

Efficiency is a important factor in order to survive in the long run. Efficiency can be attained by optimum use of resources and minimising wastage. Thus a firm which is efficient is likely to survive more in the market as it is able to minimise wastage. By being efficient means doing a work by using least possible resources. Hence it is a true statement.

3) False

A stockholder or a shareholder is a person who has purchased the shares of the company and is the owner of the company. However stakeholder is the name used to define all the person and entities who are someway related to the business including supplier, shareholder, customers etc. But stockholder relates to the owners of the company only and not outsiders. Hence it is a wrong statement.

4) False

A free entreprise economy or market economy is a economic system wherein market forces of demand and supply is free of any control or intervension by anyone say government. Here, government has no role to play. Everything is open to the market and everything is determined by the market. Hence this js wrong that govenment exerts control.