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Exam 2: Understanding Economics and How It Affects Business

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Question 161

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

A) True
B) False

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Question 162

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In the long run,the market price tends to adjust toward the equilibrium point.

A) True
B) False

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Question 163

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Resource development is the study of how to increase resources and to create the conditions that will make better use of those resources.

The markets for laundry detergents,soft drinks,and automobiles are dominated by just a few sellers.Economists would classify these markets as examples of:

In the U.S. ,the percentage of GDP that the government collects through taxes is approximately 28%.

Peace and prosperity will flourish if we can find the one best way to divide existing resources among nations.

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.

A contemporary economic challenge is creating profitable businesses by selling goods and services that contribute toward a healthier environment.

__________ is a condition in which the price increases are slowing.

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:

How is it that people working in their own self-interest produce goods,services,and wealth for others?

_____________ refers to a general rise in the price level of goods and services over time.

__________ is the market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.

As indicated by the Making Ethical Decisions box,activities that lead to corruption can destroy free economic opportunities because they interfere with the right to freely compete.

Under the __________ system there is very little incentive to work hard or to produce quality goods or services.

A collapse in Buldovia's banking system eventually led to companies unable to borrow money to run their businesses.Firms terminated employees.These circumstances cut into consumer's purchasing power,causing a severe decline in the prices of goods and services,better known as _______.

The major benefit of socialism is that it creates strong incentives to work hard and take the risks associated with starting and operating a business.