In countries like _________ the command economy predominates.
China and Vietnam
Cuba and North Korea
South Africa and Kenya
Germany and France
In a command economy, the __________ either makes most economic decisions itself or at least strongly influences how the decisions are made.
government
market
firm
business sector
Because of their relatively small national economies, which of the following is most likely considered to be the most important factor for Belgium, Korea, and Canada to take full advantage of specialization?
division of labor
international trade
economies of scale
command economy
In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are made by buyers and sellers.
market oriented economy
macroeconomy
microeconomy
Which of the following is generally accepted as a valid criticism of the production of useful goods and services?
government involvement
the black market
environmental pollution
economic freedom
In the first chapter of The Wealth of Nations, Smith introduces the idea of the __________, which means the way in which the work required to produce a good or service is divided into a number of tasks that are performed by different workers.
interconnected economy
task economy
modern economy
If macroeconomics looks at the economy as a whole, it focuses on which of the following?
households
business firms
unemployed people
the division of labor
In the ____________, households work and receive payment from firms.
financial investment market
financial capital market
labor market
savings market
In the ______________, households receive goods and services and pay firms for them.
goods and services market
Which of the following best describes a monetary policy tool?
interest rates
taxes
households savings
government spending
Which of the following best describes a fiscal policy tool?
bank lending
financial capital markets
household spending
When nations desire a healthy macroeconomy, they typically focus on three goals, one of these being:
balanced budget
prudent monetary policy
low inflation
assuring competition between firms
The basic difference between macroeconomics and microeconomics is:
A. microeconomics concentrates on individual markets while macroeconomics focuses primarily on international trade.
B. microeconomics concentrates on the behavior of individual consumers while macroeconomics focuses on the behavior of firms.
C. microeconomics concentrates on the behavior of individual consumers and firms while macroeconomics focuses on the performance of the entire economy.
D. microeconomics explores the causes of inflation while macroeconomics focuses on the causes of unemployment.
Which of the following is most likely a topic of discussion in macroeconomics?
an increase in the price of a hamburger
a decrease in the production of DVD players by a consumer electronics company
an increase in the wage rate paid to automobile workers
a decrease in the unemployment rate
Which of the following statements most likely lies within the realm of microeconomics?
Unemployment rises during a recession and falls during an expansion.
An increase in government spending will increase the aggregate demand for goods and services in the economy.
A rapid acceleration of the supply of money may create inflation.
An increase in labor costs will increase the additional cost of producing another bus.
Specialization:
leads to greater self-sufficiency
can lead to an increase in overall production
allows workers to develop skills by working on a large number of tasks
is always the result of an inefficient use of resources
In a market-oriented economy, the amount of a good that is produced is primarily decided by the interaction of:
all consumers
buyers and sellers
producers and input suppliers
producers and government planning committees
The circular flow diagram of economic activity is a model of the:
flow of goods, services, and payments between households and firms.
influence of government on business behavior.
role of unions and government in the economy.
interaction among taxes, prices, and profits.
_____________ - a term referring to the fact that for many goods, as the level of production increases, the average cost of producing each individual unit declines.
Skill
Specialization
Economies of scale
Division of Labor
Economic models like the _____________________ are not physical models, but instead are diagrams or graphs or even mathematical equations that represent economic patterns or theories.
financial captial
circular flow diagram
specialization model
