Exam 2: Economics: The Framework of Business

In a business cycle, the _____ is a period of robust economic growth and high employment.

Identify a true statement about the Federal Reserve.

The Board of Governors of the Federal Reserve holds a meeting to discuss its concern over the decreasing gross domestic product of the country. All members agree that the situation can be brought under control and the economy can be stimulated if they use the discount rate as a tool. In this scenario, the Fed is most likely to:

Olivia is a part-time worker at a jam-producing company in her village. Her job entails picking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. In the given scenario, Olivia's unemployment exemplifies _____.

The clothing industry is an example of monopolistic competition.

Economists declare an official recession when gross domestic product decreases for six consecutive quarters.

In the context of monetary policy, if the Fed decreases the reserve requirement, _____.

Aidan is a college student. As part of his economics project, he has to collect data on the consumption patterns of the households in his locality. In this scenario, Aidan is most likely involved in the study of _____.

In the context of monetary policy, when the Fed reduces the discount rate, banks will have to obtain funds at a higher cost.

Which of the following is a similarity between socialism and communism?

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

A giant telecommunications company that was previously owned by the government of Sunzabia, a European country, is sold to an independent industrialist to ensure that the company is handled in a more efficient way. The given scenario exemplifies _____.

Which of the following tools is most frequently used by the Fed to expand and contract the money supply in the economy?

The repayment of the debt by the U.S. federal government is likely to result in an increase in:

Which of the following is one of the core purposes of the Fed?

In the context of monetary policy, the Fed is most likely to reduce the discount rate during:

_____ are market structures with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones.

New Tapan, an African country, invested resources in the defense sector, and as a result, its budget deficit grew. To decrease the budget deficit, the government of New Tapan cut down its expenditures in several other sectors and imposed higher taxes. Similar measures implemented by the government in the United States would most likely create _____.

Over the past 30 years, most economies of the world have begun moving toward the market end of a spectrum that ranges from pure planned economy at one extreme to pure market economy at the other. This has led to: