Chapter 4 Study Guide The Economic Environment
1) The recent global economic financial crises have led to proposals of more or less regulations? 2) Income, purchasing power, market size, and market type are all key elements of the political or the economic environment? 3) From the 1980s to the most recent global economic crisis, did countries turn away from the principles and practices of free markets or adopt the principles and practices of free markets? 4) There is no universal scheme to assess the performance and potential of a country's economic environment due to three conditions. What are they? 5) Gross national income (GNI), the broadest measure of economic activity for a country, is defined as ______. 6) In computing GNI, the value of a Ford car that is manufactured in Mexico using capital from the United States would be added to the GNI of which: United States or Mexico? 7) The measure of the value of production that occurs within a country's borders without regard to whether the production is done by domestic or foreign factors of production is commonly referred to as the ________. 8) To determine whether the standard of living within a country is rising or falling, economists would most likely use which of the following measures? 9) Some argue that gross national income, and its expression in terms of per capita, growth rate, or PPP refinements, focuses too much on ________, thereby only partially representing the scale and scope of a country's level of development. 10) The United Nations' ________ measures life expectancy, educational attainment, and the standard of living in a given country. 11) The Human Development Index measures the average achievements in a country on three basic dimensions of human development, including ________. 12) The ________ starts with the same accounting framework used to calculate GDP but then adjusts for values assigned to environmental quality, population health, livelihood security, equity, free time, and educational attainment. 13) A worrisome outcome of chronic inflation is that it tends to ________. 14) ________ is a general, sustained rise in prices measured against a standard level of purchasing power. 15) In order to reduce or control inflation, a government would most likely do which of the following? 16) ________ can occur when demand declines and supply grows. 17) In the United States, U3 is the official unemployment rate. This rate provides a measure of ______. 18) The so-called "misery index" is the sum of a country's ________. 20) A country's debt has two parts: internal and external. Internal debt results when ________; external debt results when ________. 21) Why is extremely uneven income distribution a problem?
23) The World Bank reports that roughly ________ percent of the world's population is poor. 24) The ________ view calls for companies to develop low-cost, high-powered, resource-minimizing innovations that can be marketed to the billions of people living on less than a few dollars a day. 25) The statement that summarizes all economic transactions between a country and the rest of the world during a given period of time is the ________. 26) The two main categories in the balance of payments are the ________. 27) The ________ tracks all trade activity in merchandise.
28) The fundamental notion of balance means that all balance of payment transactions ________. 29) An economic system is the set of structures and processes that ________ in a country. 30) Spectrum analysis gives a sense of the range of economic systems in the world today. One end of the spectrum is anchored by the idea of ________, the other by the idea of ________. 31) Capitalism is a free-market system built on ________.
32) Communism champions a ________ system built on state ownership of all economic factors of production and control of all economic activity. 33) In a market economy, the patterns of resource allocation are most directly influenced by ________. 34) A system in which...
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