Better Business Chapter 2 Review

What is the primary focus of macroeconomics?

• The financial decisions of an individual household

• The overall performance and policies of a nation’s economy

• The pricing strategies of a single business

• How businesses compete with each other in a single industry

When there are many businesses in the same market selling slightly different products, this is called:

• A monopoly

• Oligopoly

• Monopolistic competition

• Pure competition

What happens to the supply curve when a new competitor enters the market?

• It shifts to the right

• It shifts to the left

• It remains unchanged

• It moves upward

Which of the following factors affects supply rather than demand?

• A sudden increase in consumer interest in electric cars

• A new manufacturing technology that reduces production costs

• A rise in consumer incomes

• A shift in customer preferences toward organic foods

If a U.S. company builds a factory in Canada, the goods produced in that factory are counted in:

• Canada’s GDP

• The United States' GDP

• Both countries' GDP

• Neither country’s GDP

Which of the following best describes inflation?

• A decrease in overall price levels

• An increase in the average price of goods and services over time

• A period of declining economic activity

• A sudden drop in stock market prices

What kind of unemployment occurs when someone is between jobs or just entering the workforce?

• Cyclical

• Structural

• Seasonal

• Frictional

If the government wants to stimulate the economy using fiscal policy, which action would it most likely take?

• Raise interest rates

• Cut government spending

• Lower taxes

• Increase the reserve requirement

What happens when the economy contracts for two or more consecutive quarters?

• Inflation

• Expansion

• Recession

• Peak

The Consumer Price Index (CPI) is used to measure:

• The total market value of goods and services produced in a country

• The overall money supply

• Changes in the cost of living over time

• The profitability of major companies