Exam 4: Economics: the Framework for Business

Explain the difference between monetary and fiscal policy and explain how they are formulated.

The fundamental rights of capitalism guarantee that businesses will be profitable and taxes will be low,thus providing a strong motivation to start a business.

What is the term for the process of converting government-owned businesses to private ownership?

In which of the following do firms compete by selling differentiated products?

GeeGee's is a community-based bakery known for its scrumptious tea cakes.The recipe calls for expensive spices imported from Asia.Recently,the cost of these spices has risen dramatically,leading GeeGee's to consider increasing its prices.What could GeeGee's management perform in order to analyze how this change would affect consumer choices?

What are the four basic types of unemployment?

The Shero nation was founded on a capitalistic market system.The newly elected prime minister won by campaigning on the platform based on socialist principles.If the prime minister of Shero implements her campaign promises,which of the following trends will the citizens of the country be most likely to experience?

Recovery is a period of increasing employment,business expansion,and increased consumer spending.

Pampered Pooch is a dog groomer in the area looking to increase productivity for the business.Currently,in an eight-hour day,Pampered Pooch can wash and groom 12 large dogs.How would the management of Pampered Pooch calculate productivity?

Financial or social systems are not essential to the development of a strong economy.

What do you call a period of robust economic growth and high employment,which indicates that businesses are capitalizing on new market opportunities?

The M1 money supply consists solely of currency (coins and paper money)issued by the government.

Inflation occurs as the average prices of goods and services rise.

Capitalism is based on private ownership,economic freedom,and fair competition.

Most business enterprises in Canada are privately owned,but the federal government owns a number of major enterprises (e.g.,Canada Post,VIA Rail,etc.).This suggests that the Canadian economy would be best classified as what type of economy?

Morgan's Moped and Bicycle Store is located on the property of a five-star resort in Alberta.The mopeds and bikes are rented based on one-hour increments.Morgan lowers her standard prices to attract patrons during daily rainstorms in June and August.This is an example of decreasing supply.

Privatization is the conversion of government-owned enterprises to private ownership.

Why does the government have laws against monopolies?

The government experiences a budget surplus when its tax revenue exceeds its expenditures.

Members of the Canadian Parliament have voted themselves an annual pay raise while the country is operating under a budget deficit.What will be the result of a pay raise for all Members of Parliament?