Exam 2: Understanding Economics and How It Affects Business

Maureen is the office manager of a service company. She recently approved the installation of new computers and office equipment for all workers in her office. If Maureen's company is like most service companies, she will probably see a big jump in the productivity figures reported for workers in her office.

Which of the following is an important premise of Smith's conclusions about economic prosperity?

Which of the following is a basic right under capitalism?

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

If the quantity supplied in a market exceeds the quantity demanded, a shortage will exist.

unemployment results when the demand for labor varies during the year.

There are some restrictions on freedom of assembly and freedom of speech under a system.

One of the drawbacks of free markets is the fact that competition in such markets undermines the ability of price to adjust to its equilibrium value in the long run.

Senator Spendital made a speech deploring the continuous deficits in the federal budget. He is proposing an increase in tax rates to raise more revenue for the government and thus gradually reduce the size of the national debt over a period of several years. The strategy Senator Spendital is proposing is a common type of monetary policy.

In order to restrict spending by businesses and households, the Fed would take measures designed to lower interest rates.

The concept of the invisible hand begins with the assumption that the primary motivation of entrepreneurs is that they will prosper from their own hard work.

The higher the measurement of productivity, the higher the likely costs of production.

A rising GDP, rising unemployment rate, and rising inflation rate signify a healthy economy.

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

The most fundamental of all rights in capitalism is the right to private property.

The producer price index measures what is happening to prices at the wholesale level.

Like most nations, the United States has a mixed economy.

There is general agreement in the United States on the degree to which the government should be involved in the economy.

The four basic types of unemployment are frictional, structural, seasonal, and:

In socialist economies, the government owns some, if not most basic businesses such as telecommunications systems and utilities.