Exam 2: Understanding How Economics Affects Business

Thomas Malthus believed that people in most countries would never be able to achieve high standards of living unless the problems of overpopulation were addressed.

Economics is the study of how a society _________________.

Incentive to own and operate businesses is high in nations whose governments are proponents of socialistic practices.

Economic progress can occur when business owners provide jobs and economic growth for their employees,their communities,and themselves.

One of the benefits of communism is that it allows individuals a great deal of freedom to make their own economic decisions.

Robin just graduated from college and is seeking her first job.She received a degree in engineering at a prestigious university.Robin has several leads and has heard that the market for engineers is very strong,so she is convinced that she should locate a good job in the near future.Robin's current situation is an example of structural unemployment.

Which of the following statements about capitalism is the most accurate?

The _________ is a statistic used to compute the pace of inflation or deflation.

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).

Jorge Martinez is a well-educated entrepreneur who operated a small business in his home country of Florentina.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 a(n):

___________ studies the operation of a nation's economy as a whole.

One reason the CPI is monitored very closely by government,businesses,and workers is that:

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

In an effort to promote rapid growth,the government of Goldinia has kept taxes low,done little to regulate business activities,and implemented only modest social programs.The government is now facing political pressure to do more to clean up the environment and to reduce the inequalities of income and wealth.Which of the following statements is most accurate? Goldinia's government is currently taking:

If the government wants to jump-start the economy resulting in more consumer spending,it will raise taxes.

A free market is one in which decisions about what to produce and in what quantities are made by:

Gabby and Gus Malloy recently got pre-approved on a loan for their first house purchase.They are speculating on how much they should bid on their number one choice - a small,three-bedroom bungalow near a major college town.Which of the following indicators may be an important factor in whether they are able to successfully put in a low bid?

The size of the national debt increases when the federal government runs a deficit.

GDP figures do not include the value of illegal activities.

Global economics and politics have no significant influence on businesses in the United States.