Exam 2: Understanding Economics and How It Affects Business

The National Coalition on Healthcare Reform reports that nearly 18% of the U.S.population under the age of 65 is without healthcare.If this advocacy group succeeds in convincing the current administration and Congress to vote for basic healthcare for everyone,which of the following is likely to occur?

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

Several years ago,the nation of Florentina had a government-owned telecommunication system that lagged far behind other nations.In several of its rural areas,there was only one phone for an entire village of people.Government taxes collected for the purpose of maintaining the telephone system were very meager,so the notion of expanding service was almost impossible.The government of Florentina decided to sell the phone company to a private firm.The private firm expanded rapidly.It reported that even poor consumers were willing to pay for a private phone line.This government decision and subsequent sale was:

According to the invisible hand concept,the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

GDP figures do not include the value of illegal activities.

Although changes in the CPI provide interesting insights into the overall performance of the economy,these changes have little practical impact on the lives of ordinary people.

According to Adam Smith,the "invisible hand" refers to the government's effort to always keep a check on the wealth creation of individuals,so that no one business would control a market for a particular good or service.

In most large cities there are a large number of bakeries.These bakeries produce similar,but not identical,products.Some bakeries claim to have the best cheesecakes in town,while others brag about their cookies or specialty breads.The bakery market in a large city is an example of:

Gig recently heard a radio report that the Fed will try to help get the U.S.economy back on track.If the Fed takes action,Gig would likely see:

Communism is an economic and political system in which the state makes almost all economic decisions and owns almost all the major factors of production.

Most countries throughout the world can be classified as either purely capitalist or purely socialist.

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

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:

The point of intersection between the supply and demand curves is called the stress point.

Inflation refers to a general rise in the prices of goods and services over time.

In the service sector of the economy,the influx of machinery such as computers increases output per worker,but does little to improve the quality of services.

The freedom of people to decide where they want to work and live,and what they want to buy or sell are basic capitalist rights under:

Fourteen years ago,Sergio noticed that a lot of people who bought personal computers did not know much about how to use them and frequently suffered system crashes and other aggravations.He decided he could earn a nice profit by starting a consulting business to help other people overcome their computer woes.Although the business struggled at first,it has experienced a good deal of success for the past five years.Sergio has many satisfied customers,and the business has grown to the point where he now employs several workers.Sergio's experience is an example of:

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

The economic and political system in which the government owns almost all the major factors of production is called: