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Exam 2: Understanding Economics and How It Affects Business

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Question 91

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The freedom of people to buy,sell,and use land,buildings,machinery,and inventions are basic capitalist rights under:

A) The right to own private property.
B) Freedom of expression.
C) Freedom of choice.
D) Freedom of competition.

E) A) and D)
F) None of the above

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Question 92

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When the market price of a good is above its equilibrium value,and all other determinants are unchanged:

A) A shortage will exist in the market.
B) The quantity demanded will exceed the quantity supplied.
C) Both the supply curve and the demand curve will shift to the right.
D) A surplus will exist in the market.

E) All of the above
F) None of the above

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Question 93

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__________ unemployment refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of available jobs.

Robin just graduated from college and is seeking her first job.She received a degree in engineering at a prestigious university.Robin has several leads and has heard that the market for engineers is very strong,so she is convinced that she should locate a good job in the near future.Robin's current situation is an example of structural unemployment.

The price of iPhones™ is falling.In a free-market economic system where everything else is equal,the most likely explanation is:

GLAMOR GAL is a popular cosmetics company.Although it is gaining in popularity among younger women,its promotional strategy continues to focus on the shadow-free finish that it produces on almost any skin type.Due to the fact that its industry faces monopolistic competition,the company knows that it must continue to differentiate itself from the competition.

Roland is a nation with an economic system that closely approximates pure capitalism.While Roland's economy is likely to generate a great deal of wealth,it may do a poor job of providing an acceptable level of income for the elderly or disabled.

Today,the economic systems of most nations could most accurately be classified as:

Which of the following statements about the Federal Reserve Bank the Fed) is most accurate?

Adam Smith's research focused on determining the best way to distribute a fixed amount of resources,rather than on how to create more wealth.

Economics is the study of how a society _________________.

Adam Smith believed that incentives to seek personal gain would create wealth,but that the government must then step in to make sure that this wealth is equitably distributed.

Capitalism is the foundation of the U.S.economic system.

Most nations recognize that private enterprise is detrimental to business growth and what is best for consumers.Recently,a nation had the opportunity to sell its government-owned telecommunication system to a private firm.Instead it realized that it would be better off if it raised taxes so that it could maintain the status quo.

In the United States,laws prohibit the creation of most types of monopolies.

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

Monetary policy is directly under the control of the U.S.Department of the Treasury.

Incentive to own and operate businesses is high in nations whose governments are proponents of socialistic practices.

A free market is one in which decisions about what to produce and in what quantities are made by:

The next wave of marketable innovations may involve new ways to produce and conserve energy.If we can turn new technology into marketable products and services that produce energy to run our businesses and homes,the U.S.could see a surge in output of goods and services.The Department of Economic Development would document this surge by measuring the ______.