Exam 2: Understanding Economics and How It Affects Business

The national deficit is the difference between our nation's exports and its imports.

Any output produced by U.S. firms is included in the value of U.S. GDP, even if the output was produced in a foreign country.

The best way to avoid national budget deficits is increase our exports and decrease our imports.

in the service sector has not shown the significant improvement that it has in the manufacturing sector. There are significant advances in the quality of service, but workers in this sector are unable to increase the number of persons served in a given time period.

Which of the following statements provides the most accurate comparison of socialism and communism?

When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a:

One strength of a free-market economic system is that it emphasizes the fair and humane treatment of the less fortunate in society.

The U.S. national debt equals the sum of all recorded years of deficits.

Workers in nations who are strong proponents of communism work much harder and longer hours.

The U.S. economic system relies on

High tax rates in socialist countries is a major reason these nations have experienced a brain drain.

Peace and prosperity will flourish if we can find the one best way to divide existing resources among nations.

Which of the following people would tend to favor a socialist economy?

In perfect competition, each firm produces a product that is clearly differentiated from the products of other firms in the same market.

Capitalism is the foundation of the U.S. economic system.

In 2009, the U.S. unemployment rate was at its lowest point in 10 years.

For many years, Congressman Ricardo Perez has called for more government regulation of business. "After all," the Congressman said recently, "businesspeople are out to make a profit, not to create jobs or serve their customers. The government must pass more laws to require businesses to take the interests of consumers and workers into account." From these comments, it is clear that Congressman Perez:

A simple supply curve shows that an increase in the price of a good will cause the quantity supplied to:

A prediction that GDP will increase significantly over the next six months is bad news for most businesspeople.

Nick wants to buy a new car, and is planning to borrow the money for his purchase from a bank. He read in the newspapers that the Federal Reserve is likely to implement policies in the next few weeks that are designed to stimulate the economy. Nick would probably get a lower interest rate on his car loan if he waits until after the FED implements its new policies.