Exam 2: Economics and Banking

Divya owns a small boutique in a busy neighborhood. She has been thinking of expanding her business hours and hiring a sales associate to work evenings and weekends. She sees on the news that the GDP is down and decides to hold off on expanding her business for the time being. Why?

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(Essay)

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Question 1

Correct Answer:

Verified

A downward-moving GDP indicates problems with the economy. The GDP moves down because fewer goods are being produced and fewer services being sold. This means that the businesses that produce these goods and services will have less profit and may need to lay off workers. The change in income for these workers means that they will spend less money overall, which means she may not have enough customers to make the expansion worthwhile.

The Fed relies primarily on changes in the reserve requirement (the minimum amount of money banks must hold in reserve to cover deposits)to ease or tighten the money supply.

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(True/False)

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Question 2

Correct Answer:

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False

Define economics and explain the difference between microeconomics and macroeconomics.

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Question 3

Correct Answer:

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Economics is the study of how governments, businesses, and individuals make decisions to best satisfy their wants and needs. Microeconomics focuses on how individual businesses and consumers make decisions to allocate their resources. Macroeconomics focuses on the behavior of the overall economy.

A supply curve illustrates ________.

(Multiple Choice)

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Question 4

________ unemployment refers to a temporary state of unemployment in which workers move between jobs, careers, and locations.

(Multiple Choice)

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Question 5

A(n)________ occurs when there are a few sellers in a given market and each seller has a fairly large share of that market.

(Multiple Choice)

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Question 6

Higher productivity results in higher costs and higher prices, resulting in lower income and lower profitability.

(True/False)

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Question 7

Name the four parts of the business cycle and describe how they relate to each other.

(Essay)

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Question 8

The main function of economics is to study ________.

(Multiple Choice)

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Question 9

Mae bakes 100 cinnamon rolls each day to sell at her café, and each day she sells out before breakfast is over. Many of her customers ask for, but don't get one. Her customers ask that she bake more cinnamon rolls each day. This is an example of a shortage.

(True/False)

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Question 10

How might a decrease in income levels lead to population changes?

(Essay)

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Question 11

Which of the following statements is NOT true of a market economy?

(Multiple Choice)

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Question 12

A planned economy is one in which ________.

(Multiple Choice)

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Question 13

What is the purpose of the U.S. government's regulation of monopolies?

(Multiple Choice)

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Question 14

What is the MOST likely scenario in a monopoly, where only one seller supplies a product or service?

(Multiple Choice)

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Question 15

is the country closest to having a planned economy, and is the country closest to having a market economy.

(Multiple Choice)

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Question 16

A demand curve illustrates ________.

(Multiple Choice)

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Question 17

Competition in an oligopoly is centered more on making one product stand out from another than it is on price.

(True/False)

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Question 18

The value of currency is based on an underlying commodity.

(True/False)

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Question 19

Joseph took a class in macroeconomics, which means that he was studying the behavior of ________.

(Multiple Choice)

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Question 20

Showing 1 - 20 of 110

Exam 2: Economics and Banking

Divya owns a small boutique in a busy neighborhood. She has been thinking of expanding her business hours and hiring a sales associate to work evenings and weekends. She sees on the news that the GDP is down and decides to hold off on expanding her business for the time being. Why?

The Fed relies primarily on changes in the reserve requirement (the minimum amount of money banks must hold in reserve to cover deposits)to ease or tighten the money supply.

Define economics and explain the difference between microeconomics and macroeconomics.

A supply curve illustrates ________.

________ unemployment refers to a temporary state of unemployment in which workers move between jobs, careers, and locations.

A(n)________ occurs when there are a few sellers in a given market and each seller has a fairly large share of that market.

Higher productivity results in higher costs and higher prices, resulting in lower income and lower profitability.

Name the four parts of the business cycle and describe how they relate to each other.

The main function of economics is to study ________.

Mae bakes 100 cinnamon rolls each day to sell at her café, and each day she sells out before breakfast is over. Many of her customers ask for, but don't get one. Her customers ask that she bake more cinnamon rolls each day. This is an example of a shortage.

How might a decrease in income levels lead to population changes?

Which of the following statements is NOT true of a market economy?

A planned economy is one in which ________.

What is the purpose of the U.S. government's regulation of monopolies?

What is the MOST likely scenario in a monopoly, where only one seller supplies a product or service?

________ is the country closest to having a planned economy, and ________ is the country closest to having a market economy.

A demand curve illustrates ________.

Competition in an oligopoly is centered more on making one product stand out from another than it is on price.

The value of currency is based on an underlying commodity.

Joseph took a class in macroeconomics, which means that he was studying the behavior of ________.

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