Exam 2: How Economic Issues Affect Business

The government of Ruritania has implemented many programs that promote equality,but has become concerned about the very slow rate of growth that has plagued the national economy for many years.In order to address this problem,the government is likely to:

_______studies the operation of a nation's economy as a whole.

The study of how to increase resources is known as what?

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

Frictional unemployment occurs because the economy is experiencing a recession.

As productivity increases,the cost of producing goods and services is likely to fall.

Today,the economic systems of most nations could most accurately be classified as:

A collapse in the national banking system of Lasia has resulted in a condition where prices are declining.This condition is known as:

Disinflation refers to a situation in which the overall level of prices in an economy is steadily falling.

Fourteen years ago,Murray noticed that a lot of people who bought personal computers really did not know much about how to use them and frequently suffered system crashes and other aggravations.He decided he could earn a nice profit by starting a consulting business to help other people overcome their computer woes.Although the business struggled at first,it has been quite successful for the last five years.Murray has many satisfied customers,and the business has grown to the point where he now employs several workers.According to Adam Smith,Murray's experience is an example of:

In the service sector of the economy,the influx of machinery such as computers increases output per worker,but does little to improve the quality of services.

A_______ is a very severe recession that is usually accompanied by a decline in the average level of prices.

Monica notices that just a few big companies produce the vast majority of soft drinks.She would be correct in describing the soft drink industry as an oligopoly.

Macroeconomics is the economic perspective that looks at the operation of a nation's economy as a whole.

Adam Smith believed that since businesspeople are motivated to improve their own prosperity,their actions are unlikely to benefit society as a whole.

Deflation is a situation where the average level of prices is actually declining.

If a shortage exists for a good in a free-market economy,the:

Under perfect competition,sellers' products appear to be identical.

When the supply curve and demand curve for a particular good are on a single graph,the point at which the two curves intersect identifies the:

Which of the following would be a topic emphasized in a macroeconomics course?