Ch2

Question 1

Perfect competition

Answer 1

There are many sellers so that one is not too big with too much power over the market

Question 2

Monopolistic competition

Answer 2

Many sellers producing the same product but buyers perceive them as different (ex. McDonald’s and Burger King)

Question 3

Oligopoly competition

Answer 3

Just a few sellers dominate the market

Question 4

Monopoly

Answer 4

One seller controls the market

Question 5

Brain drain

Answer 5

Loss of smart educated people to rich countries in search of more money

Question 6

Types of economies

Answer 6

Free-market
Command
Mixed

Question 7

Economic indicators

Answer 7

Gdp
Unemployment rate
Inflation rate

Question 8

Deflation

Answer 8

Prices are declining

Question 9

Disinflation

Answer 9

Inflation is slowing down

Question 10

Stagflation

Answer 10

Economy is slowing but prices are rising

Question 11

Customer price index

Answer 11

Monthly stats on the rate of inflation or deflation

Question 12

Producer price index

Answer 12

Index that measures prices at wholesale level

Question 13

Business cycle

Answer 13

Economic boom
Recession
Depression
Recovery

Question 14

Fiscal policy

Answer 14

Manipulating market through taxing and or gov spending

Question 15

Keynesian Econ theory

Answer 15

Increasing spending and cutting taxes should stimulate economy

Question 16

Monetary policy

Answer 16

Manipulating market through money supply and interest rates by federal reserve

Question 17

Invisible hand

Answer 17

Being selfish with business benefits the community