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100% Pass Business-Education-Content-Knowledge-5101 - Accurate Pdf Praxis Business Education: Content Knowledge (5101)Exam Version

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PRAXIS Praxis Business Education: Content Knowledge (5101)Exam Sample Questions (Q20-Q25):

NEW QUESTION # 20
To calculate the net worth of a business, an entrepreneur should subtract

A. the liabilities from the current assets
B. the current liabilities from the owner's equity
C. the total expenditures from the total revenue
D. the liabilities from the total assets

Answer: D

Explanation:
Net worth (or owner's equity) of a business is calculated as Total Assets minus Total Liabilities, reflecting the residual value attributable to owners. Option B (current assets minus liabilities) is incorrect, as it excludes non- current assets. Option C (expenditures from revenue) relates to profit, not net worth. Option D (current liabilities from equity) is incorrect, as it misapplies the accounting equation. This question aligns with the Accounting and Finance category, emphasizing financial position.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Accounting and Finance; Financial Accounting, Chapter 1.

NEW QUESTION # 21
Which of the following statements best describes a recession?

A. The amount of goods a given amount of money buys declines.
B. Businesses expand production and unemployment rises.
C. Demand for goods and services rises and productivity falls.
D. Demand for goods and services falls and unemployment rises.

Answer: D

Explanation:
A recession is characterized by a decline in economic activity, leading to reduced demand for goods and services and increased unemployment as businesses cut back. Option B is incorrect, as business expansion typically reduces unemployment. Option C is incorrect, as rising demand does not align with a recession.
Option D describes inflation, not a recession. This question falls under the Economics category, focusing on macroeconomic concepts.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Principles of Economics, Chapter 22.

NEW QUESTION # 22
The depth and detail presented in a business plan will depend primarily on the

A. amount of capital obtained
B. target market of the new venture
C. size and scope of the new venture
D. experience of the entrepreneur

Answer: C

Explanation:
The depth and detail of a business plan are primarily determined by the size and scope of the new venture, as larger or more complex ventures require more comprehensive planning to address operational, financial, and market complexities. Option A (target market) influences the marketing section but not the overall plan's detail. Option B (entrepreneur's experience) may affect quality but not depth. Option D (capital obtained) is a result of the plan, not its determinant. This question aligns with the Entrepreneurship category, focusing on business planning.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Entrepreneurship; Entrepreneurship: Starting and Operating a Small Business, Chapter 7.

NEW QUESTION # 23
Martha sold 1,000 poinsettia plants at $9 each and had 100 remaining in inventory. Joe sold 1,000 poinsettia plants at $8 each and had none remaining in inventory. Which of the following can be inferred from the scenario?

A. Only Joe's price is at equilibrium.
B. Joe's price and Martha's price are at equilibrium.
C. Joe's price and Martha's price are above equilibrium.
D. Martha's price is below equilibrium.

Answer: A

Explanation:
In a market, equilibrium price clears inventory (no surplus or shortage). Joe sold all 1,000 plants at $8 with no inventory left, suggesting his price is at equilibrium. Martha sold 1,000 plants at $9 but has 100 left, indicating a surplus, so her price is above equilibrium. Option A is incorrect, as Martha's price is not below equilibrium. Option B is incorrect, as Martha's price is not at equilibrium. Option D is incorrect, as Joe's price is at equilibrium. This question falls under the Economics category, focusing on supply and demand.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Principles of Economics, Chapter 4.

NEW QUESTION # 24
The Federal Reserve Bank can increase the rate of growth of the money supply primarily by

A. raising the discount rate
B. raising the reserve requirement
C. selling government securities in the open market
D. buying government securities on the open market

Answer: D

Explanation:
The Federal Reserve increases the money supply by buying government securities in open market operations, injecting cash into the banking system, which banks can then lend. Option A (raising reserve requirements) reduces the money supply by limiting lending. Option B (selling securities) withdraws cash, decreasing the money supply. Option C (raising the discount rate) discourages borrowing, also reducing the money supply.
This question aligns with the Economics category, emphasizing monetary policy.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Money, Banking, and Financial Markets, Chapter 15.

NEW QUESTION # 25
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