$$\text{Surplus} = \text{Revenues} - \text{Expenditures}$$

$$\text{Deficit} = \text{Expenditures} - \text{Revenues}$$

Question 1

Which of the following best describes 'monopolistic competition' in the context of market structures?

Accepted Answer

A market with many sellers offering similar products, but buyers perceive differences among them.

Question 2

Which of the following is a shared responsibility between the federal and provincial governments in Canada?

Accepted Answer

Immigration

Question 3

The Bank of Canada influences the money supply primarily by adjusting which of the following rates?

Accepted Answer

Overnight rate

Question 4

Which of the following is NOT a responsibility of the federal government in Canada?

Accepted Answer

Property law

Question 5

If the government spends more than it collects in taxes during a fiscal year, this situation is called:

Accepted Answer

A deficit

Question 6

Which of the following best describes the process of privatization?

Accepted Answer

The government sells Crown corporations to private investors.

Question 7

A Canadian company is being sold to a foreign owner. Under what condition can the federal government block the sale?

Accepted Answer

If the sale does not pass the Net Benefit to Canada Test.

Question 8

Which of the following is a primary objective of the Bank of Canada’s monetary policy?

Accepted Answer

Ensuring price stability

Question 9

Which of the following is an example of a Crown Corporation?

Accepted Answer

Bank of Canada

Question 10

Which of the following equations correctly represents a government budget surplus?

Accepted Answer

$$	ext{Surplus} = 	ext{Revenues} - 	ext{Expenditures}$$

Question 11

Which of the following is a key reason for the creation of marketing boards in Canada?

Accepted Answer

To stabilize prices and supply for both farmers and consumers

Question 12

Which of the following is a municipal government responsibility?

Accepted Answer

Zoning and by-laws

Question 13

Which of the following best describes the effect of tariffs under the National Policy (1867)?

Accepted Answer

They forced trade to flow within Canada, east to west.

Question 14

Which of the following is a plausible impact of government deregulation on businesses?

Accepted Answer

Reduced barriers to competition

Question 15

If the Bank of Canada increases the overnight rate, what is the likely effect on the prime rate?

Accepted Answer

The prime rate will increase.

Question 16

Which of the following is an example of a federal law that protects consumers in Canada?

Accepted Answer

Personal Information Protection and Electronics Document Act

Question 17

Which of the following best describes the concept of a 'mixed economy' as it applies to Canada?

Accepted Answer

Resource allocation is determined by both the market and the government.

Question 18

Which of the following is a direct result of government purchasing policies that favour local businesses?

Accepted Answer

Creation of trade barriers

Question 19

Which of the following is a correct formula for calculating a government deficit?

Accepted Answer

$$	ext{Deficit} = 	ext{Expenditures} - 	ext{Revenues}$$

Question 20

Which of the following is a plausible reason for the federal government to intervene in the sale of a Canadian company to a foreign owner?

Accepted Answer

The sale threatens national security.

The Role of Government in Business: Canadian Context

Study Guide - Practice Questions