Government Regulations and Business Cycles

Abigail wants to open a new bakery in a residential area within city limits. Which of the following government restrictions will she likely have to deal with when proposing to open in this area?

• Zoning laws

• Building sanitation systems

• Need to preserve historic buildings

• Restriction on building above three stories tall

In the city where Anika lives, the local government has recently passed ordinances to restrict the size of houses being built on city lots. These types of regulations have been enacted in order to —

• lower building costs for local construction companies

• ensure that new houses are available to inner city buyers

• protect the property owners already living in the neighborhood

• collect higher property taxes to build infrastructure for the neighborhood

Emma is studying the business cycle and wants to know what characterizes an expansionary period. She learns that an expansionary period in the business cycle is distinguished by —

• high inflation

• declining sales

• fewer excise taxes

• low unemployment

Rohan is studying the economic patterns of his country. He notes down the Five Stages of ? 1. Growth 2. Peak 3. Recession 4. Trough 5. Recovery

• Economic Downturns

• the Annual Budget

• Fiscal Policy

• the Business Cycle

During a class discussion, Rohan mentioned that a certain economic indicator BEST shows that deflation is occurring. Which indicator was he referring to?

• ceilings imposed on state budget amounts

• a decrease in interest rates due to home foreclosures

• regulations placed on private manufacturers

• a decline in prices due to the lack of consumer spending

Anika and Elijah are considering starting a business together. Which characteristic do their potential sole proprietorship or partnership have in common?

• limited ability to sell stock

• unlimited liability

• doubly taxed on profits

• strictly regulated by the government

Emma is starting a small bakery and is considering how to best use her resources. Which statement BEST describes the relationship between labor and capital in her business?

• Laborers help determine the amount of taxes paid by the owner of the capital.

• Entrepreneurs use capital with labor to produce goods for the marketplace.

• Capital is the result of competition between laborers and entrepreneurs.

• Capital will determine the number of laborers employed in a factory.

During a class discussion on industrial economies, Maya asked, "In an industrial economy, 'Capital' refers to ______."

• human activity that generates a good or a service

• cash or durable goods used to produce goods or services

• the result of competition between laborers and entrepreneurs

• the number of laborers employed in a factory

Olivia is studying the components of an industrial economy for her economics class. Which of the following is NOT a component of an industrial economy?

• Labor

• Capital

• Taxes

• Services

Rohan is studying the industrial economy and needs to understand how 'Labor' is defined in this context. Fill in the blank: 'Labor' in an industrial economy is defined as ______.

• cash or durable goods used to produce goods or services

• human activity that generates a good or a service

• the result of competition between laborers and entrepreneurs

• the amount of taxes paid by the owner of the capital