Exam 2: Economics: the Framework for Business

In the context of monetary policy, _____ is a rule set by the Fed, which specifies the minimum amount of funds a bank must hold, expressed as a percentage of the bank's deposits.

Gross Domestic Product (GDP) measures the total value of all the imports and exports of a nation on a quarterly basis.

The consumer market basket of goods and services, in which the consumer price index (CPI) measures the change in weighted-average price over time, is created by the U.S. Bureau of Labor Statistics.

During a period of grave financial crisis in the United States, Congress is pressurized to raise the limit on the maximum amount of money the government can borrow. Congress increases the limit on the condition that it will implement sharp tax hikes and across-the-board spending cuts to compensate for the raise and to ensure that the overall budget deficit decreases. In this scenario, the measures implemented by Congress will most likely create:

_____ are market structures with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones.

The term _____ refers to the quantity of products that producers are willing to offer for sale at different market prices.

The U.S. government uses the consumer price index (CPI) and the producer price index (PPI) to evaluate:

Gregory is a typist at a corporate firm. When the company adopted a special voice recognition software for the purpose of documentation, Gregory's job became inessential. Therefore, he was laid off. The increased use of technology in most companies makes Gregory's skills inessential, and he remains unemployed for a long time. In the given scenario, Gregory is facing _____.

Rochester, an Asian country, follows an economic system that facilitates private ownership. The country's economy is based on economic freedom and fair competition. Given this information, the economic system followed by Rochester is _____.

The economic system of the United States is called _____.

A(n) _____ is a structure for allocating limited resources.

In the context of planned economies, countries that adopted communism most likely developed:

Ronnie works on a part-time basis for a company that provides home repair and maintenance services. Ronnie is specialized in handling the central heating systems in homes and is therefore needed to be at work only during the winter. Other than that, he is mostly unemployed for the rest of the year. In this scenario, the form of unemployment faced by Ronnie is _____.

During a period of inflation in the United States, the Federal Reserve sells treasury bonds. Buyers of these bonds write checks to the Fed, and the Fed cashes these checks from banks. Given this information, the banks will most likely:

Keltica, a country in Asia, enjoyed a period of great economic boom in the 1980s. The country had robust economic growth, high employment, and abundant business investments during this period. In the context of the business cycle, the economy of Keltica was in _____ during the 1980s.

Following a contraction in the economy, the government of Geri, a South American country, decides to increase the money supply in the country. The government wants to first tally the M1 form of money supply. In this context, the government will most likely use _____ to tally the M1 form of money supply.

A drawback of communism, which was adopted by some countries in the 1900s, was the inability of people to make basic choices such as where to work or what to buy.

__________refers to Federal Reserve decisions that shape the economy by influencing interest rates and the supply of cash.