Exam 2: Understanding Economics and How It Affects Business

Marco has noticed that as older adults purchase tablets, they do not know much about how to use them and are frequently aggravated. He decided he could earn a nice profit by developing courses and offering one-on-one help to aid his customers in overcoming their deficiencies. Although the business struggled at first, he is experiencing a good deal of success now. Marco has many satisfied customers, and the business has grown to the point where he now employs several workers, some of whom were previous clients. Marco's experience is an example of

If businesses are producing at capacity, and the nation is experiencing almost full employment (a very low rate of unemployment-less than 2%), the Fed may decide to

As productivity increases, the cost of producing goods and services is likely to fall.

When describing the state of the U.S. economy, reporters often refer to the nation's GDP, its unemployment rate, and the CPI. Explain what each of these terms means and why each measure is significant.

Workers in socialist countries often get longer vacations and more social benefits than workers in free-market economies.

The economic and political system in which the government owns almost all the major factors of production is called

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

Explain the significance of "price" in a free-market economic system.

________ is considered by some to be the father of modern economics.

Socialism and communism are both variations of a free-market economy.

History shows that free-market capitalism leads to a fair and equitable distribution of wealth.

Glittering Gems is a popular fashion jewelery company. Although it is gaining in popularity among younger women, its promotional strategy continues to focus on the tarnish-free finish that is applied to every earring, necklace, and ring. Due to the fact that its industry faces monopolistic competition, the company knows that it must continue to differentiate itself from the competition.

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

Socialists believe that the primary economic function of the government is to promote rapid economic growth.

Which of the following statements would a follower of Adam Smith most likely make?

Communist values are disappearing because

Dan and Susan Greene are purchasing their first home in Savannah, Georgia. They are seeking pre-qualification on a home loan. The unemployment rate for Georgia is 10.2% and GDP is declining. Chances are pretty good that the Fed will raise interest rates in order to loosen the supply of money, resulting in a more expensive loan for Dan and Susan.

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).

When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a

The most fundamental of all rights in capitalism is the right to private property.