FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 2: Understanding Economics and How It Affects Business

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

A major premise of a socialist system is:

A) To make sure that those that create wealth are allowed to keep that wealth.
B) To reduce the inequality in the distribution of wealth.
C) To create incentives to encourage entrepreneurs to create jobs and economic growth.
D) To keep tax rates extremely low so that businesses do not need to support government projects.

E) C) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements about business cycles in the U.S.is most accurate?

A) Business cycles occur precisely every 5 years.
B) Long term business cycles have only two phases-boom and bust.
C) Seasonal business cycles occur within a year.
D) Business cycles are based on theories.

E) A) and C)
F) A) and D)

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

____________ refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

Inflation refers to the persistent rise in the purchasing power of money.

__________ unemployment results when the demand for labor varies during the year.

An) _____________ curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period.

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.

Economics was known as the "Dismal Science" because:

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.

Which of the following statements would a follower of Adam Smith be most likely to make?

Countries that rely on a free market system are plagued by persistent shortages or surpluses of goods and services.

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

Joe and Tess McGreen are purchasing their first home in Durham,North Carolin A.They are seeking pre-qualification on a home loan.The unemployment rate for North Carolina is 10.2% and GDP is declining.Chances are pretty good that the Fed will raise interest rates in order to loosen the supply of money,resulting in a more expensive loan for Joe and Tess.

Due to the rights and freedoms afforded under capitalism:

In order to restrict spending by businesses and households,the Fed would take measures designed to lower interest rates.

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

If the national debt is $14 trillion,the national deficit will be considerably higher.

Gig's native country of Frinezia was much different from the United States.In addition to its higher tax rates,the government offered more extensive social programs that were designed to redistribute income and reduce inequality.Although small businesses were privately owned and operated in Frinezia,many basic industries were owned and operated by the government.From this information,you would classify Frinezia's economic system as ___________.

Chase is a recent college graduate with a new job as an engineering trainee for a large defense company.Now that he is making good wages,he hopes to start saving for his first house and also contribute toward the company retirement plan.As he looks over his monthly bills,Chase is concerned about ever getting ahead of the game.His food bill,car payment,and mounting gasoline payments keep him in the "just making ends meet" category.As his mind wonders back to the good ol' college days,he reflects on a time when gas and food seemed a lot more reasonable.Chase is experiencing the effects of:

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