Exam 2: How Economic Issues Affect Business

Under capitalism:

The challenge for macroeconomists is what?

Socialism and capitalism are examples of command economies.

The rise and fall of the economy is referred to as the concept of:

Sue is a gifted cook.She is about to open her own business,a restaurant in which she will be the head chef.Sue is willing to work long hours because she believes that her culinary talents and hard work will allow her business to succeed and earn her a great deal of money.Sue's efforts appear most consistent with the economic theory developed by:

A basic right under capitalism is the right of business to receive funding provided by the government.

Adam Smith believed that the key to creating rising standards of living was to limit population growth.

The study of how society employs resources to produce goods and services and distribute them for consumption among various competing groups and individuals is known as:

Resource development is concerned with finding the best way to utilize the declining amount of resources a society has available.

The Canadian economy is an integral part of the world economy.

Free-market capitalism has brought prosperity as well as_______ .

Which of the following statements most accurately identifies a serious limitation of the free-market economic system?

Stagflation occurs when the economy is slowing but prices are rising.

In the nation of Equalia,many businesses are privately owned,but the government owns some of the basic businesses and has developed many social programs designed to promote social equality.Tax rates are high,and many educated people have left the country.The economy of Equalia would be considered an example of:

The CPI is based on the prices of a carefully selected basket of goods,all of which consumers can purchase at a typical supermarket.

_______refers to a general rise in the price level of goods and services over time.

Identify the four different degrees of competition.

Permany is a nation with an economic system that closely approximates pure capitalism.While Permany's economy is likely to generate a great deal of wealth,it may do a poor job of providing an acceptable level of income for the elderly or disabled.

In an effort to promote rapid growth,the government of Goldinia has kept taxes low,done little to regulate business activities,and implemented only modest social programs.The government is now facing political pressure to do more to clean up the environment and reduce the inequalities of income and wealth.Which of the following statements is most accurate? Goldinia's government is currently taking:

If the quantity supplied in a market exceeds the quantity demanded,a shortage will exist.