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Exam 2: How Economic Issues Affect Business

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Question 71

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In a mixed economy,some allocation of resources is made by government,and some by the market.

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B) False

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Question 72

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What is the difference between macroeconomics and microeconomics?

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Macroeconomics looks at the operation of...

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Question 73

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The _______index measures changes in the prices of goods and services such as food,housing,and apparel.

Adam Smith believed the self-interest of businesspeople would lead them to create needed goods,services,and jobs.

The strength of the economy has a large effect on businesses.

In capitalism,most decisions about what goods and services to produce are made by:

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.

Two or more consecutive quarters of GDP decline is known as a .

Adam Smith's theories focused on explaining the best way to divide the fixed resources we have available,rather than on how to create more wealth.

Price is the key factor that determines both quantity supplied and quantity demanded.

A(n) _______exists when the entire supply of a good is controlled by a single seller.

In capitalism,the government prohibits people and businesses from competing with each other.

Over the past decade,socialist economies have proven to be more successful at innovation and inventions than capitalist economies.

A(n) _______exists when a large number of firms produce goods that are similar but are perceived by buyers as being different.

When prices are free to adjust over time,the market price of a good tends to:

Jorge Martinez is a hard working entrepreneur who operated a successful business in his home country of Margintina for many years.Recently,however,he immigrated to Canada and applied for Canadian citizenship."In Margintina,tax rates were very high," Jorge complained."The government used the taxes I paid to finance all sorts of social programs to help the less fortunate.While this is a noble goal,it has really undermined the profit incentive of individuals such as myself.I really feel that these high taxes have stifled economic growth." Jorge's comments illustrate the reason many socialist countries are experiencing a(n) :

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

The top tax rate on personal income in most socialist economies is usually lower than the top tax rate on personal income in capitalist economies.

Over the recent past,Canadian governments have been privatizing a number of businesses,as growing public sentiment is that governments are not effective as business operators.This trend is an example of the growth of:

In socialist economies,the government owns some,if not most,basic businesses such as coal mines and utilities.