Exam 4: Economics: the Framework for Business

In Canada,who has responsibility for the control of the money supply?

Everlene's Bakery competes against many other bakeries in the same city.However,each bakery uses different recipes and each claims to offer better products than their rivals.For example,Everlene's advertises that it produces the "World's Best" chocolate-chip cookies.This suggests that Everlene's market is an example of pure competition.

The unemployment rate measures individuals 16 years of age and older without jobs who are actively seeking employment.

What is the main economic goal of the government in a socialist economy?

Broad economic trends in employment,inflation,and economic growth provide a context that has an important impact on businesses throughout the economy.

The federal government experiences a budget deficit when its revenue from taxes is higher than its expenditures.

One problem that plagued many communist economies was that the absence of free markets resulted in crippling shortages and surpluses of goods and services.

The few nations that still rely on a communist economic system have actually seen major improvements in their economic performance over the past decade.

During the second half of the 20th century the economies of many European nations became more socialistic,especially when compared to the economy of Canada.What does this suggest that these European countries had that was different than in Canada?

Macroeconomic conditions impact day-to-day life by influencing variables such as the availability of jobs,the amount of take-home pay households have available after paying taxes,and the buying power of those incomes.

Compare and contrast the consumer price index (CPI)and producer price index (PPI)as measures of price changes in the economy.

What is the measurement for the amount of goods and services produced by an economy divided by the number of resources used to make those goods and services?

The bank rate is the interest rate the Bank of Canada charges on its loans to commercial banks.

What does the M2 money supply include?

In 2005,General Motors introduced a blockbuster promotion by offering customers the employee discount prices for any vehicle.Chrysler and Ford followed the trend and offered the same program.This intense price competition among the three major automobile producers resulted in lower profits for all three companies.This outcome illustrates a problem for firms in what type of economic structure?

It is important that any government examine multiple measures of its own economic health,rather than simply relying on one or two dimensions.

Define the differences and similarities between the command economies of socialism and communism.

Cyclical unemployment results from layoffs during recessionary periods.

Abraham Lincoln once stated,"You cannot help the poor by destroying the rich.You cannot lift the wage earner by pulling down the wage payer." This quote is most consistent with what type of economic philosophy?

In a planned economy,the government plays only a minor role in the operation of the economy.