Exam 2: Understanding Economics and How It Affects Business

The total value of a country's output of final goods and services in a given year is known as the gross domestic product GDP).

Besides the slowdown in the general economy,Giganeers faces threats of competition from several other companies that provide engineering consulting services.In order to gain more business,Gig tries to convince potential clients that his company offers better service than the competition.He has advertised heavily in professional magazines,often quoting some of his highly satisfied clients.The market Giganeers operates in is an example of:

Large educated populations can contribute to an economy by offering knowledge and entrepreneurship.

Current measures of productivity in the service sector provide an accurate measure of changes in the quality of output.

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. The Fed usually pursues policies to decrease interest rates when it wants to stimulate the economy.If Nick wants a low interest rate on his car loan,he should wait until the Fed acts to stimulate the economy.

One of the benefits of a free market is that:

Jorge Martinez is a well-educated entrepreneur who operated a small business in his home country of Florentin A.At the encouragement of his American relatives,Jorge recently immigrated to the United States and applied for U.S.citizenship."In Florentina,tax rates were very high," Jorge complained."The government used the taxes I paid to finance all sorts of social programs to help the less fortunate.While this is a noble goal,it has really undermined the profit incentive of individuals such as me.I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing an):

Under the __________ system the number of choices in the market is directly related to government involvement in markets.

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.

Free-market capitalism has made it more difficult for individuals to gain wealth.

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

Patrick just landed a job working for a major online gaming company in Silicon Valley.In a lot of ways,this is his dream job come true - the chance to work for a company that makes gaming software and live in California at the same time.As his plane lands at San Jose International,he pictures a snazzy apartment with a palm tree right outside the front door.A few hours later,as he meets a property manager of a large apartment complex,his heart sinks.The price of apartments is out of sight! Back at the hotel,he logs on to the Bureau of Labor Statistics to try to get a better picture of why the cost of housing is so high in this region of the U.S.Which factors may be causing the rise in the price of housing?

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time.

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

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

Larry and Moe are having an argument.Larry believes that over the past year,the economy is experiencing rapid inflation,while Moe says that the economy actually experienced disinflation during this period.The easiest way for Larry and Moe to settle their argument is to look at GDP figures for the past year.

When the market price of a good is below the equilibrium price,and all other determinants are unchanged:

Economist Thomas Malthus believed that ______________ would limit economic progress.

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

____________ 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.