Chapter 2- Economics and Business

Which of the following occurs when real GDP declines and unemployment rises?

a contraction

A statistic that reports the status of the economy a few months in the past is known as what?

a lagging indicator

In a free market, what dictates how goods and services will be allocated

competition

What type of unemployment occurs during the time period between jobs when a worker is searching for or transitioning from one job to another?

frictional

Which of the following is NOT one of the pillars of democratic capitalism?

government regulation

Economists usually emphasize the degree to which government does not have control over markets in a capitalist system - what is a term for this concept?

laissez faire

Which of the following is a useful indicator of the outlook for future jobs?

new claims for unemployment insurance

Which of the following is NOT a component of GDP by expenditure?

per capita income

Which of the following is NOT an example of a category of economic indicator?

policy briefings

Businesses are more willing to sell a product when the price ________ and less willing to sell it when the price _________.

rises; falls

Which approach to calculating GDP works on the principle that the incomes of the productive factors must be equal to the value of their products?

the income approach

What event occurred alongside the development of industrial capitalism in 19th Century Britain?

universal adult male suffrage

When we say that growth is calculated in real terms, what do we mean? It is adjusted for unemployment.

It is adjusted for inflation.

According to economist Milton Friedman, why is the term "business cycle" a misnomer?

It is non-cyclical in nature.

Which of the following is NOT generally an outlet for the benefits of productivity growth to be distributed to?

The media