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Exam 2: Understanding Economics and How It Affects Business

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Question 61

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A major trend around the world today is that

A) free-market economies are moving more toward socialism and socialist economies are moving more toward capitalism.
B) productivity in the service sector is increasing much more rapidly than productivity in agriculture and manufacturing.
C) governments in socialist economies are increasing their use of social programs and relying on higher tax rates to finance these programs.
D) governments in countries with capitalist economies are paying less attention to environmental concerns and issues involving social equality.

E) A) and B)
F) B) and C)

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Question 62

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Core inflation figures omit healthcare prices, but not energy prices.

A) True
B) False

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Question 63

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________ exists when a large number of firms produce goods that are similar but customers believe there is a difference.

The Federal Reserve Bank is responsible for controlling the money supply.

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Under capitalism, the government prohibits people and businesses from competing with each other.

As "global" trends become "local," and as we see more opportunities to compete in the global market,

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

In a free-market economic system, ________ is the key determinant used to signal to producers what to produce and how much to produce.

Which of the following people would tend to favor a socialist economy?

The newscast cited forecasts that national output might continue to fall in the future. If total output shows decline for two consecutive quarters, economists would classify this as a ________.

Serena is a vocal critic of socialism. She often points out that governments in many socialistic countries have cut back on government services and have thusly reduced taxes. Serena believes that this trend will ultimately result in every country adopting pure capitalistic ideals. Recent evidence shows that her views are essentially correct.

Brianne graduated from college and is looking for her first job. She received a degree in nursing from a well-regarded local university. Brianne has several leads and has heard the nursing market is still strong, so she is convinced that she will locate a good job in the near future. Brianne's current situation is an example of structural unemployment.

The U.S. national debt equals the sum of government deficits over time,.

Communism is an economic system in which

Compare and contrast fiscal policy and monetary policy. Discuss how each of these approaches can be used to influence the state of the economy.

Identify and describe the 4 basic rights that form the foundation of capitalism.

Adam Smith believed that an economic system couldn't truly prosper unless people were taught to value the welfare of others above their own personal gain.

The most fundamental of all rights in capitalism is the right to private property.

Microeconomics focuses on the decisions and behavior of people and organizations in particular markets.