Exam 2: Understanding Economics and How It Affects Business

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time.

Which of the following strategies may have a net effect on inflation?

Which of the following would be a topic emphasized in a microeconomics class?

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

________ is a condition in which the average level of prices is actually falling.

The study of how to increase the amount of available resources and create conditions that will make better use of these resources is known as

State capitalism is the combination of freer markets and some government control.

The social and economic goals of ________ include private ownership of land and business.

When the government attempts to stabilize the economy by changing taxes or government expenditures, it is using fiscal policy.

The Federal Reserve Bank is responsible for controlling the money supply.

The presence of competition in free markets

________ is the name of a free-market economic system in which most of the factors of production and distribution -- such as land, factories, railroads, and stores -- are owned by individuals.

Meredith notices that just a few big companies produce most of the flavored teas she sees in the grocery store. She would be correct in describing the flavored tea industry as an oligopoly.

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

Brain drain is the loss of the best and brightest people from their home countries to other countries.

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

A ________ is a severe recession that is usually accompanied by deflation.

Sarah owns a candle shop. She had been charging $5 for each scented jar candle. At this price her customers bought an average of 421 jars each week. For the last few weeks, she has reduced her price to $3.95 per candle, and her customers have purchased an average of 695 jar candles each week. These results are consistent with the economic concept of demand.

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

Fiscal policy refers to the federal government's efforts to keep the economy stable by controlling the amount of money in circulation.