Exam 2: Understanding Basic Economics

The economic system that allows individuals the least degree of economic freedom is ________.

A(n)________ is a graph showing the relationship between the amount of product that buyers will purchase at various prices,all other factors being equal.

In early December,it was reported that housing rates in October 2010 were at its 6-month low,which resulted in increased home purchases.This is an example of a ________.

Movement along the supply curve typically slopes upward.

Frictional unemployment is caused by economic fluctuations.

Capital includes land and minerals that a business needs in order to produce goods and services.

When demand for goods and services drops,businesses reduce production,thereby requiring fewer workers.The unemployment resulting because of this phenomenon is known as ________ unemployment.

Scarcity creates competition for resources,and forces trade-offs on the part of every participant in the economy.

The supply curve of a firm will shift to the right if technology increases the firm's production costs.

Explain three commonly known price indexes.

________ lies somewhere between capitalism and communism,with a fairly high degree of government planning and some government ownership of capital resources.

A deep and prolonged recession can be considered as a depression.

Which of the following is true of the pricing in a market of monopolistic competition?

The money,computers,machines,tools,and buildings that a business needs in order to produce its good and services are called ________.

By taking an ownership of 60% in General Motors in 2009, the U.S.nationalized the automaker.

Which of the following is a characteristic feature of economic contraction?

A business owner has to decide whether the company should purchase new manufacturing equipment,open a new retail store in another city,or invest in a major advertising campaign. -This decision to give up something to get something else is referred to as ________.

What type of economic system lies between capitalism and communism? Explain why it is more effective than other economic systems.

________ unemployment is the natural movement of workers into and out of jobs,such as when a person quits one job without first lining up a new job.