Exam 2: Understanding How Economics Affects Business

High tax rates in socialist countries is a major reason these nations have experienced a brain drain.

In most large cities there are a large number of bakeries.These bakeries produce similar,but not identical,products.Some bakeries claim to have the best cheesecakes in town,while others brag about their cookies or specialty breads.The bakery market in a large city is an example of:

Economists study how people use resources to produce and distribute goods and services for consumption among competing groups and individuals.

At the equilibrium price,the quantity consumers desire to buy equals the quantity sellers desire to sell.

Inflation refers to a general rise in the prices of goods and services over time.

In order to restrict spending by businesses and households,the Fed would take measures designed to lower interest rates.

According to the invisible hand concept,the best way for a society to encourage the creation of jobs and the production of the products most wanted by consumers would be to:

When the government runs a continual budget deficit,it increases the:

Explain the difference between fiscal policy and monetary policy.Discuss how each of these approaches can be used to influence the state of the economy.

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

Sue is a gifted cook.She plans to open a restaurant in which she will be the head chef.Sue is willing to work long hours because she believes that her culinary talents and hard work will allow her business to succeed and earn her sizeable profits.Sue's efforts are most consistent with the economic theory developed by:

__________ unemployment refers to persons who purposefully quit their jobs and have not yet found a new job.

Patrick lives in a nation whose government embraces capitalism.He owns his own home and car,as well as his own business and building.Patrick maintains ownership due to:

Disinflation refers to a situation in which prices continue to rise,but not at the rate they were rising previously.

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.

Which of the following indicators provides the clearest indication that an economy is experiencing deflation?

In recent years,U.S.manufacturing sector has experienced ___________ productivity.

A young couple living in rural west-central Missouri heard about the closing of a local grocery store.Although a small operation,it served a small community that would now have to travel another 20 miles to the nearest grocery store.With help from a local realtor and banker,the couple purchased the store,remodeled it,and re-opened it.As new store owners,they had to carefully watch cash flow.As their customer base began to grow,they began offering hot food,and hired others to help with the operation.The economic benefit created in this story is called:

The National Coalition on Healthcare Reform reports that nearly 18% of the U.S.population under the age of 65 is without healthcare.If this advocacy group succeeds in convincing the current administration and Congress to vote for basic healthcare for everyone,which of the following is likely to occur?

Studies about the effects of population growth on the economy are part of macroeconomics.