Question 1

The nation of Tryland has seen the total value of the goods and services it produces increase rapidly over the past year.This would show up most clearly as a:

Accepted Answer

The increase in the total value of goods and services produced in Tryland indicates an increase in the country's GDP (Gross Domestic Product), which measures the total value of all goods and services produced within a country in a specific time period (usually a year). Therefore, option A is the best choice.

Question 2

In an effort to promote rapid growth,the government of Goldinia has kept taxes low,done little to regulate business activities,and implemented only modest social programs.The government is now facing political pressure to do more to clean up the environment and reduce the inequalities of income and wealth.Which of the following statements is most accurate? Goldinia's government is currently taking:

Accepted Answer

The government of Goldinia has implemented a predominately capitalist approach to achieve its economic goals, as evident from the low taxes and minimal business regulations. However, the political pressure to clean up the environment and reduce income and wealth inequalities suggest a shift towards a more socialist approach in the future. Hence, option D is the most accurate answer.

Question 3

An increase in __________ means that a given number of workers can produce more output than before.

Accepted Answer

Productivity refers to the amount of output produced per unit of input, such as a worker's output per hour of work. If productivity increases, it means that a given number of workers can produce more output than before, which can lead to economic growth and higher living standards. The other answer choices do not relate to an increase in the efficiency of workers or the economy.

Question 4

The _________ is a statistic that is used to compute the pace of inflation or deflation.

Accepted Answer

The Consumer Price Index (CPI) is a common measure of inflation that tracks the changes in the price of a basket of goods and services consumed by households. It is widely used by governments, businesses, and individuals to estimate the cost of living and to adjust wages, benefits, and taxes for inflation. The other choices, such as gross domestic product (GDP), index of leading indicators, and index of inflationary trends, are not directly related to measuring the pace of inflation or deflation.

Question 5

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

Accepted Answer

Consumer price index measures the changes in the prices of goods and services purchased by households, including food, housing, apparel, transportation, and more. It is used as an indicator of inflation and is widely watched by policymakers, economists, and investors.

Question 6

__________ is a condition in which the rate of inflation is declining.

Accepted Answer

Disinflation is a condition where the rate of inflation is decreasing, but prices are still increasing. In deflation, prices are actually decreasing, while in stagflation, there is a combination of high inflation and stagnant economic growth. "Unflation" is not a recognized term.

Question 7

A __________ is a very severe recession that is usually accompanied by a decline in the average level of prices.

Accepted Answer

A depression is a prolonged and severe recession that involves a significant decline in economic activity and usually lasts for several years. During a depression, unemployment rates rise dramatically, businesses and banks fail, and the stock market experiences significant declines. Additionally, a depression is often characterized by a deflationary spiral, where prices of goods and services decline due to decreased demand and excess supply.

Question 8

The four basic types of employment are frictional,structural,seasonal,and:

Accepted Answer

The fourth basic type of employment is cyclical, which refers to changes in employment levels caused by fluctuations in the economy.

Question 9

In recent years,productivity in the manufacturing sector of the Canadian economy has been:

Accepted Answer

In recent years, productivity in the Canadian manufacturing sector has generally been rising due to technological advancements and increased efficiency.

Question 10

Three of the major indicators of the economic condition of Canada are the gross domestic product (GDP),the price indices,and the:

Accepted Answer

Unemployment rate is a key economic indicator that measures the percentage of the total labor force that is unemployed but actively seeking employment. A low unemployment rate usually indicates a healthy economy with strong job growth and consumer spending.

Question 11

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

Accepted Answer

Deflation is the condition in which the average level of prices is actually falling, leading to an increase in the purchasing power of money. Disinflation refers to a decrease in the rate of inflation, while stagflation refers to a situation in which there is a combination of high inflation and stagnant economic growth. Unflation is not a commonly used term in economics.

Question 12

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

Accepted Answer

The CPI is closely followed by various entities because changes in the CPI can lead to changes in wages, interest rates, tax rates, and government benefits. Therefore, it is an important indicator of inflation and purchasing power, and can have significant impacts on the economy and individual financial situations.

Question 13

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:

Accepted Answer

The trend of privatization of businesses in Canada reflects the growth of free-market economies, where the role of the government is reduced in business operations and market forces are allowed to guide the economy. This is in contrast to command economies where the government plays a dominant role in the economy. Free trade and mixed economies may also exist in varying degrees in free-market economies, but privatization specifically reflects the shift towards a more market-driven economy.

Question 14

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

Accepted Answer

Inflation refers to a general rise in the prices of goods and services over time.

Question 15

The total value of final goods and services produced within a nation's borders in a given year is known as that nation's:

Accepted Answer

The term that refers to the total value of final goods and services produced within a nation's borders in a given year is gross domestic product (GDP).

Question 16

Almost every discussion about a country's economy is based on gross domestic product.GDP is the:

Accepted Answer

GDP is the total value of goods and services produced in a country in a given year. It is used as a measure of a country's economic performance and to compare the economic growth of different countries. Option A is incorrect because GDP is not divided by the total hours of labour required to provide goods and services. Option B is incorrect because while GDP is related to the amount of goods and services people can buy, it is not the same as the amount of goods and services people can buy with the money they have. Option C is incorrect because GDP is not a measure of society's political freedom or general well-being.

Question 17

As economies start to develop in third world countries,command economy is one of the options considered.With this option,

Accepted Answer

In a command economy, the government owns and operates a number of businesses, which aligns with choice D. Choice A describes a mixed economy, while choice B is not a relevant consideration for a command economy. Choice C may be encouraged in some command economies, but it is not a defining characteristic.

Question 18

A collapse in the national banking system of Lasia has resulted in a condition where prices are declining.This condition is known as:

Accepted Answer

Deflation is a general decline in the level of prices of goods and services in an economy, which occurs due to factors such as a contraction in the money supply, a decrease in demand for goods and services, or an increase in the supply of goods and services. In this case, the collapse in the national banking system has likely resulted in a contraction in the money supply, leading to a decline in prices. Disinflation refers to a slowdown in the rate of inflation, while contra inflation and overproduction are not relevant to the given scenario.

Question 19

Which of the following results would be the clearest indication that an economy was experiencing deflation?

Accepted Answer

Deflation is a sustained decrease in the general price level of goods and services. A decrease in the consumer price index (CPI) would be the clearest indication of deflation, as it measures the change in prices of goods and services purchased by households. A decrease in the unemployment rate or GDP may indicate economic growth, while an increase in the producer price index (PPI) may reflect changes in production costs rather than consumer prices.

Question 20

Kathleen manages a manufacturing plant for ScanRite,Inc.,a producer of scanners and other input devices connected to computers.About six months ago,Kathleen asked an assistant to keep track of both work hours and output at her plant.She has compared these figures,and has found that even though the number of workers (and the hours they worked)remained relatively steady over the past six months,the plant's output increased significantly.This indicates that:

Accepted Answer

The increase in output while keeping the number of workers and hours steady indicates an increase in worker productivity. No information is given about selling off excess inventory, price increase, or the need to hire more workers.

Quiz 2: How Economic Issues Affect Business