Exam 2: Understanding Economics and How It Affects Business

Reality, Inc. is a major producer of reality television shows. The company faces fierce competition from three other major producers of similar shows. Together, Reality, Inc. and its three rivals control almost all of reality television. Their market environment is called

The study of how society chooses to employ resources to produce goods and services and to distribute them for consumption among various competing groups and individuals is known as demographics.

When prices are free to adjust over time, in the long run, the market price of a good tends to

Most communist countries today are suffering from severe economic problems.

The ________ is a statistic used to measure the pace of inflation or deflation.

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

Olivia recently left her job at a large corporation because she saw little chance for advancement. Although she is still searching for a new position, she believes the economy is healthy and she hears that several firms are hiring people with her qualifications. Which of the following statements about Olivia's current situation is most accurate?

________ policy refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.

One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.

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

The U.S. strongly relies on GDP data. However, it is only the total value of finished goods produced by the country. Officials are looking to measure total sales volume at all stages of production. What statistic would be most useful to them?

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

During the a recession, the government of Cashland flooded several banking, financial services, and insurance firms with government funds in exchange (at least temporarily) for government ownership rights. This move signaled the government's concern that the global banking system might collapse if these firms ended up in bankruptcy. This decision for government involvement in these firms demonstrates

Economics was called the "Dismal Science" by Thomas Carlyle because

Economics is the study of how a society ________.

As "global" trends become "local," and as we see more opportunities to compete in the global market,

A major trend around the world today is that

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

The "invisible hand" in Adam Smith's theory turns self-directed gain into social and economic benefits for all.

Which of the following statements about the Federal Reserve Bank (the Fed) is most accurate?