Future Business Leaders of America (FBLA) Advertising Practice test

Advertising stimulates sales and the economy in all of the following ways except by?

1. A) growing the gross domestic product

2. B) decreasing competition

3. C) adding value to products and services

4. D) generating jobs

The correct answer is: B) decreasing competition

Advertising plays a crucial role in stimulating sales and the overall economy primarily by enhancing competition rather than decreasing it. When companies advertise, they not only promote their own products but also increase awareness about various options available to consumers. This, in turn, can encourage businesses to improve their offerings and lower prices to capture market share, which leads to increased competition. The correct answer is based on the premise that advertising fosters an environment where competition thrives. It adds value to products and services through promotional efforts, highlights unique features, and often showcases customer satisfaction, all of which can enhance consumer interest and drive sales. Additionally, by growing the gross domestic product, advertising contributes to the economic health of a country through increased consumption and investment. It also plays an essential role in generating jobs, as the need to create advertisements leads to employment in various sectors like marketing, graphic design, and sales. In summary, the notion that advertising decreases competition runs counter to its fundamental purpose of making markets more dynamic and beneficial for consumers.