Exam 2: Economics: The Framework of Business

Describe the two key categories of planned economies and illustrate the features of each.

Identify a true statement about the debt ceiling.

In the context of fundamental principles of a free market system, which of the following statements is true of a supply curve?

The gross domestic product (GDP) of Trelinberg, a South American nation, has been decreasing for the past eight years. The long period of consecutive decreases in the GDP has led to high unemployment rates in Trelinberg. In the given scenario, the economy of Trelinberg is most likely experiencing _____.

The controversial $700 billion economic bailout plan passed by Congress in early October 2008 was called the _____.

_____ is a form of unemployment that involves layoffs during recessions.

In the context of the business cycle, which of the following statements is true of the period of economic contraction?

In the context of monetary policy, when the economy contracts, the Fed typically decreases the money supply.

In the context of the free market system, which of the following statements is true of pure competition?

Prior to formulating its annual budget, the government of the Asian country of Florenesia employs a number of individuals to look into the overall productivity of the country. These individuals are also responsible for studying and revising some of the taxation policies and gauging the employment rate. Given this information, these individuals are studying _____.

Lefrada, a luxury watchmaker, stops production for three months and lays off 30 employees because of a sharp decline in its sales during the period of recession. In the given scenario, the laid off employees are facing _____.

Which of the following is a feature of capitalism?

Which of the following statements best describes the role of the government in a capitalist economy?

Irkholm, a South American nation, experiences an economic downturn that leads to an increase in average prices across the country. The situation becomes more serious when average prices increase more than 50% per month. In the given scenario, Irkholm is experiencing _____.

The structure of the Board of Governors of the Federal Reserve is such that no single president can appoint all of the Board's members.

Keltica, a country in Asia, enjoyed a period of great economic boom in the 1980s. The country had robust economic growth, high employment, and abundant business investments during this period. In the context of the business cycle, the economy of Keltica was in _____ during the 1980s.

Which of the following is a negative factor that interferes with the effectiveness of socialist economic systems?

Which of the following is an example of a natural monopoly?

The government of Lenzerbia, a country in South Asia, monitors its inflation rate using an index that measures change over time in the prices that businesses pay to each other for goods and services. In this scenario, the Lenzerbian government most likely uses the _____ to evaluate inflation.

In the context of the fundamental rights of capitalism, which of the following statements is true about capitalism?