FP 1 Obj. 5.01 & 5.02 Flashcard

Front

Which is a factor that measures the condition of the economy? profit margin, price stability

Back

price stability

Front

When interest rates continue to increase to a high level, the economy might experience a/an:

Back

recession.

Front

A sudden or unexpected impact on goods that causes inflation.

Back

supply shock

Front

The rate of inflation that the government targets is ___.

Back

2%

Front

Interest rates that rise and fall by a wide range on a regular basis often are an indication of:

Back

economic instability.

Front

Why should a businessperson understand business cycles?

Back

to make plans that will level out cycles

Front

The purchasing power of consumers will decrease when: a pay raise is 4% and the inflation rate is 6%.

Back

a pay raise is 4% and the inflation rate is 6%.

Front

High levels of inflation often have a negative effect on a business's purchasing power.

Back

purchasing power.

Front

Goods and services sold to other countries.

Back

Exports

Front

When the Consumer Price Index (CPI) increases sharply, stock prices usually:

Back

fall.