Exam 2: Understanding Economics and How It Affects Business

Productivity of workers in the U.S. is helped by the use of better machinery.

The price of the Samsung Galaxy Tablet is falling. In a free-market economic system where everything else is equal, the most likely explanation is

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

Economists study how people use resources to produce and distribute goods and services for consumption among competing groups and individuals.

Brendan considers himself to be a follower of Thomas Malthus. Which of the following statements would he be most likely to make?

Sean received an ad for bundled television, phone, and Internet service that cost substantially more than he is currently paying. At the same time, he received a notice from his utility company that summer rates would be increasing. His textbooks are costing twice as much as they did last year, and yesterday, gas cost 30 cents more per gallon than it did last week. He can't help but marvel at how prices are rising when so many people have lost their jobs and are cutting back on expenditures. He is certain that this situation is an example of stagflation.

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.

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

An economy is said to be in a recession if GDP declines for two or more consecutive quarters.

Which of the following would be a topic emphasized in a microeconomics class?

Workers in socialist countries often get longer vacations and more social benefits than workers in free-market economies.

________ looks at the behavior of individual people and organizations in specific markets.

A basic right under capitalism is the right of businesses to receive government funding.

Monetary policy is directly under the control of the U.S. Department of the Treasury.

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

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

________ refers to a general rise in the price level of goods and services over time.

________ is the study of how a society employs its limited resources to produce goods and services and how it distributes them among competing groups and individuals.

________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Most nations recognize that private enterprise is detrimental to business growth and what is best for consumers. Recently, Evensplitia had the opportunity to sell its government-owned telecommunications system to a private firm. Instead it realized that it would be better off if it raised taxes so that it could maintain the status quo.