Chapter 2 Business Test Review

The main cause of unemployment is reduced demand for the goods and service being provided by various workers.

The money for capital projects usually comes from

A well-run business should never need to borrow money.

Represents debt for an organization

The total amount owed by the federal government is called the

A period in the business cycle marked by a long period of high unemployment, weak consumer sales, and business failures

If wages increase faster than gains in productivity, the cost of producing goods decreases and prices fall.

A period in the business cycle when most people who want to work are working, wages are good, and GDP growth increases.

An increase in GDP per capita means that

inflation

A period of economic recovery

Represents ownership in a corporation

An increase in the general level of prices

People who buy bonds are called

The last depression in the United States occurred in the 1980s.

The production output in relation to a unit of input.

Salaries and wages as well as investment income and government payments to individuals.

A decrease in the general level of prices

Inflation can sometimes occur when the demand for goods and services is greater that the supply.

Capital projects involve spending by businesses for employee training and benefits.

Which type of business sells stock?

Only final goods are counted when GDP is measured.

People with poor credit ratings pay a higher interest rate to borrow money than people with good credit ratings.

When you buy a corporate bond, you have lent money to the company.

In the United States, the labor force consist of all people above age _____ who are actively working or seeking work.

Period in the business cycle when demand decreases, unemployment rises, and GDP growth slows for at least two quarters

The interest rate financial institutions are charged to borrow funds from Federal Reserve banks is called the

Some nations have such abundant resources that they never experience economic hardships.

The portion of people in the labor force who are not working

Which of the following would NOT be included in a measure of GDP?