Exam 2: Economics: The Framework of Business

What is a business cycle? Describe the key phases of a business cycle in a changing economy.

In the context of fiscal policy, which of the following actions by the government helps boost the economy in the long term?

Explain the various changes in the rate of price in an economy.

Gross Domestic Product (GDP) levels tend to be somewhat understated, since they don't include any illegal activities, which can represent a significant portion of some countries' production.

In the context of monetary policy, which of the following is a result of a decrease in the reserve requirement?

The term _____ refers to the quantity of products that producers are willing to offer for sale at different market prices.

The country of Ukanturk has been facing an economic downturn for two consecutive years. To revive the financial condition of the country, its government tries to influence the economy through taxation and spending decisions that are designed to encourage growth and increase employment. In this scenario, the government of Ukanturk is implementing its _____.

Brontsky & Co., a member bank of the Fed, receives a notice from the Fed that notifies that it must hold funds equal to 15% of the deposits held by its customers. In this scenario, the 15% is the _____.

The Kingsabode Daily is a community news agency that distributes newspapers to the residents of Kingsabode County. To meet the demand and to ensure that there is zero wastage of resources, the news agency prints 250 newspapers that are distributed in the 250 homes in the county. The price associated with such a demand and supply pattern is called the _____.

Macroeconomics involves the study of:

Rochester, an Asian country, follows an economic system that facilitates private ownership. The country's economy is based on economic freedom and fair competition. Given this information, the economic system followed by Rochester is _____.

Each year, the Federal Open Market Committee holds eight regularly scheduled meetings to make decisions about open market operations.

In its role as a regulator, the Fed:

During an especially difficult year of weakening financial conditions, the government of Geriva, a European nation, borrows money to meet its financial obligations. However, once the borrowed amount reaches a certain limit, the government is not allowed to borrow more money. If this was to happen in the United States, it could be said that this is because the government has hit the _____.

Larry is part of the Board of Governors that manages U.S. monetary policy. He has been elected by the President to serve a single 14-year term. In addition to setting the monetary policy, he is responsible for extending banking services to commercial banks. In this scenario, Larry is most likely part of the _____.

Social security taxes are a source of revenue for the U.S. federal government.

The economic situation in Lanceberg, an African country, slowly picks up after a severe financial downturn. Over a period of 12 months, businesses expand and employment levels rise. Consumers begin to engage in normal buying behavior. In this scenario, the economy of Lanceberg is currently in the _____.

The West Asian country of Quinland is experiencing an economic downturn. There has been a decrease in its gross domestic product for two consecutive quarters. In this scenario, Quinland is most likely facing an _____.

The district of Dansas in Nerito, a European country, is a major producer of walnuts. All producers in the district sell packaged walnuts. The market structure is flexible enough for producers to enter and leave the market as and when they wish, but no single producer has control over the prices of the product. Which of the following market structures exists in Dansas?

Real gross domestic product (GDP) measures the total value of final goods and services produced within a nation's physical boundaries over a given period of time, adjusted for: